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Private Used Car Sales

Buying a used car is an excellent option when buying a new one isn't possible. While buying a used car from an individual is a viable alternative to buying from a used car dealership, you should do so with caution. That's because used cars purchased from private parties are often not subject to the same protections as those purchased from a licensed used car dealer.

A private party seller is any person without a dealer's license who sells or offers to sell a used vehicle. Private sellers use several platforms to post advertisements for used vehicles, including:

  • Online listing websites like Facebook Marketplace, Nextdoor, and Craigslist
  • AutoTrader 
  • Bulletin boards
  • Newspapers

Below, you'll find explanations of the key legal differences between buying from a licensed dealership and buying from a private party.

The Used Car Rule

In general, private sellers are not covered by the Used Car Rule and don't have to use the Buyers Guide. The Buyers Guide is a document dealerships must display on the used cars they sell. This document discloses important details to buyers about the vehicle including warranty, mechanical, and known defect information.

Private sellers aren't required to post a Buyers Guide, but that doesn't mean you can't access the vehicle's history. You can do your own research on a vehicle's history and condition in the following ways:

  • Ask the seller if you can have the vehicle inspected by your mechanic before committing to a sale.
  • Visit the National Motor Vehicle Title Information System (NMVTIS) for a report with title, insurance claims, and salvage information. Expect to pay about $50 per report.

State Law Implied Warranties

Private sales usually are not covered by the implied warranties of state law. That means a private sale probably will be on an "as is" basis unless your purchase agreement with the seller specifically states otherwise. If you have a written contract, the seller must live up to the promises stated in the contract.

Used vehicles also may be covered by a manufacturer's warranty or a separately purchased service contract. However, warranties and service contracts may not be transferable, and other limits or costs may apply. Before you buy the car, ask to review its vehicle warranty or service contract.

While a federal law known as the Magnuson-Moss Warranty Act protects most new vehicle purchases, used cars from private dealers are not included under the Act's protections. The Act requires sellers who offer products, including vehicles, with written warranties to clearly disclose the warranty's terms.

State Inspection Rules

Many states do not require private sellers to ensure their motor vehicles pass state inspection or carry a minimum warranty before offering them for sale. Ask your state attorney general's office or local consumer protection agency about the requirements in your state.

However, some states have laws governing emissions testing and standards. Used vehicles purchased in private sales are not exempt from these laws. If you bought a vehicle in an area with such a law and it does not pass emissions testing, you could potentially ask the seller to buy back the vehicle. If they refuse, you may have grounds to file a civil claim.

Watch for Signs of Illegal Practices

While auto fraud can occur in both dealership and private party sales, the risks and types of deception may differ. When buying from an individual, be vigilant for signs of fraud, especially the following:

Odometer Fraud

Sometimes referred to as “rolling back the odometer," this fraudulent practice occurs when a seller manipulates a vehicle's mileage reading to appear to have fewer miles than it actually does. This is typically done to trick buyers into paying a higher purchase price because they believe the vehicle has less mileage and wear and tear.

Curbstoning

Curbstoning is the illegal practice of private sellers purchasing a vehicle and then reselling it for more than it's worth. Seller who curbstone offer buy and resell multiple vehicles in an attempt to turn a profit. The vehicles often have undisclosed defects or mechanical issues.

Title Jumping or Title Skipping

It is unlawful to transfer a vehicle's title without registering the change of ownership. However, some private sellers do this to avoid the taxes and fees associated with transferring vehicle ownership.

Make sure the seller signs over the title to you at the time of sale. They should also issue you a bill of sale. Your local Department of Motor Vehicles (DMV) or equivalent agency will need both documents to transfer the title.

You should also check for any outstanding liens on the vehicle, which are typically indicated on the title. A lien is a contract between a vehicle owner and a lender, with the vehicle as collateral. The seller must pay off any outstanding liens before transferring the title to you.

In most states, you can use the vehicle identification number (VIN) to check for outstanding liens on the DMV website.

Additional Tips and Resources

See FindLaw's Buying a Car section for more articles on the car buying process. Find FAQ on auto fraud, lemon law basics, auto financing information, and more.

Misled by a Private Seller? Get Legal Advice

If you purchased a used motor vehicle in a private party sale and you suspect fraud or misrepresentation, you have legal rights. However, most states' car lemon laws don't cover arbitration for private sellers, meaning you will likely have to take the seller to small claims court to get a remedy.

A local consumer protection attorney can help determine whether you have a claim and if so, guide you through the legal process. An experienced attorney in your area can help protect your rights and pursue a remedy, like sale rescission or damages.

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