I hadn’t bought a vehicle since December 2009, and that was a heavily dealer incentivized 2010 Ford Focus that I bought from a car dealership in Pennsylvania. Everything was smooth sailing, all things considered — a few emails to a handful of internet sales departments, best price acquired, new car loans are more competitive and I was able to get multiple approvals in a couple hours, etc. Fast forward 9 years and I found myself trying to buy a used car from a private party seller in California and boy were things different.
I’ll try to lay out the steps I followed to buy the car here to hopefully help others, but keep in mind that things may be different for you based on where you live, what you’re buying, your credit, whether the car still has a lien on it, etc.
Step 0: Find the car
In our case, we knew we wanted a vehicle that we would overland with and so we placed a larger emphasis on Tacoma World and Craigslist where we’d be more likely to find vehicles with some pre-existing aftermarket mods. That’s one of the nice things about enthusiast forums — they tend to be pretty active for popular makes and models, which leads to a reasonable inventory of available cars for sale and for cars popular with overlanding (like the Tacoma), you can find a vehicle that has some of the mods you’d want to do anyways already done.
Aftermarket mods rarely hold any value except to a very niche audience and so if you like the mods you’ll likely wind up getting them close to free as the cars are generally marked closer to KBB/NADA value than not. In the case of the vehicle we found, we liked most of the mods and “priced in” the cost to make some of the changes we knew we’d want to make. We wound up paying a small portion of the cost to do those mods (<10% or so) judging off of the typical selling price for like vehicles without the mods. The Tacoma we wound up purchasing was found on Tacoma World.
Step 1: Test drive and mechanic
After you find the car, a few common sense items are:
- Check out the CarFax report to see how many owners the vehicle has had, if the title is clean (e.g. is it a salvage?), accident history, maintenance history, etc. Anything questionable should cause you to ask a question. If the CarFax doesn’t have maintenance records, it doesn’t mean the maintenance didn’t happen since not all mechanics log their work, but it does mean you should ask the sell if they have the records.
- Test drive the car, and try to test drive at least a few before making up your mind (including a new one if you have time!). You may think it rides fine until you’ve driven 3 and then all of a sudden you realize that bumpiness isn’t “normal” as the seller mentioned.
- Take it to a trusted mechanic for an inspection. It’ll cost you $50-150 depending, but it will give you confidence to proceed with eyes wide open. The seller may tell you that their mechanic has said everything is OK, and that’s a good input but you should have your own evaluation done, too, since after the sale the seller has no obligation to you anymore.
If the 3 things above check out, it’s time to make a deal!
Step 2: Negotiate and make a deal
I don’t have much to add here, other than to appreciate that the stranger on the other side of the negotiation is a person, too. Don’t waste their time and ask that they not waste yours. This means not making ludicrous low-ball offers, not saying you’ll come out for a test drive and no-showing, not nickel and dime-ing people, etc. On the flip side, this means they should be upfront about the condition of the vehicle, be willing to move on price if the market is suggesting they do so, etc.
Ultimately, if you found the vehicle you want and anticipate owning it for years and many adventures (!!), consider that “over paying” by $500 or $1,000 to meet in the middle and get the deal done may not be the worst thing in the world.
Step 3: Get a car loan (if required)
Step 3a: Find a lender
You may also want to get pre-approved as a step 1.5 to make sure you’re able to make the offer in good faith.
This step is harder than you’d think, though, and deserving of its own blog post. Ultimately, a lot of lenders don’t even offer private party used car loans. The ones that do oftentimes have multiple conditions in terms of vehicle age or price. The lowest APR you’ll find is much higher than if you were to buy new.
Read more about the car loan process (coming soon…).
Step 3b: Get the seller to sign an intent to sell
Depending on which lender you wind up with from the above step, they may ask for an intent to sell so that they have proof that the loan is being used for a vehicle upfront. This is because they want confirmation that there will indeed be collateral that they’ll own.
Here is an example of what Pentagon Federal Credit Union asks for.
Step 4: Verify validity of your funds ahead of time
Selling a car takes a lot of trust on both sides. Empathize with the seller and ask them how they’d like to verify the validity of the check/funds before or during your meeting. This could mean meeting at the bank where you hold your funds or received the loan in order to process the sale and have the bank verify the funds exist in-person. It could mean a phone call together to the institution to verify. Whatever the seller prefers, be flexible to help give them peace of mind. Someone who isn’t a little paranoid would concern me more, to be honest.
Step 5: Get insurance on the vehicle
When you go to meet in person, you’ll need insurance on the vehicle if you want to drive off with the car. Ensure you’ve added the new vehicle to your insurance with coverage starting on the day you buy the vehicle. Driving without coverage is a great way to get a ticket or potentially worse.
Step 6: Make sure seller has vehicle “smogged”
The smog inspection is the sellers responsibility in California. A smog inspection must be done and certification given to the new owner if the vehicle is more than 4 years old UNLESS the vehicle is being transferred to a spouse, domestic partner, sibling, child, grandchild, or grandparent, or the seller already submitted a smog certificate within 90 days of the sale.
This is non-negotiable, so make sure you get a smog certificate from the seller if needed.
Step 7: Get title from seller
This step is harder if they still have a lien on the vehicle, meaning they owe money to a lender for the car because this technically means it isn’t their property. Ask about this in step 2.
If they have a lien, you have a few options:
- Get the seller to pay off the outstanding amount. This is unlikely as most people don’t have thousands or tens of thousands of dollars laying around to pay off loans at a moments notice. However, if they can do this, then there is no longer a lien on the vehicle and they can just sign the title over to you.
- Pay the loan balance directly to the lender. This is made incredibly easy if the lender is local. Similar to step 4, you can meet at the location of the lender, pay the loan off using your check, they’ll transfer the title to you (or your lender), and pay the balance of any funds to the seller.
- Create an escrow account to mange the purchase. If the lender isn’t local, you can use an escrow service. They effectively act as an unbiased 3rd party to hold onto the vehicle title, take your check, pay off the loan, and transfer the title. This will, however, cost an additional 1-2% of the total price.
If they don’t have a lien, this is straight-forward.
On the front page, the seller needs to fill out the odometer reading and sign in two places certifying that they are both selling the car and that the odometer reading is accurate as best as they know. You, the buyer, will also sign that the odometer reading is as stated.
On the back of the title, the buyer must fill in the application for transfer of ownership and sign that they are in fact buying the vehicle. If you have a co-buyer, “AND” means that all actions require both parties to be present — things like registering the vehicle, selling it, etc — while “OR” means only one of the parties needs to be present.
At the end, you get the title and they keep the back which rips off and is titled “Notice of transfer and release of liability” and submit it to the DMV. Effectively, this tells the DMV that they’re no longer responsible for citations or anything of the sort from the date of transfer and the stated odometer reading.
Step 8: Get bill of sale from seller
This will largely be redundant of what’s on the title, but can serve as an additional document that both parties get to keep to memorialize the deal and record the sales price. Here’s an example from the DMV themselves, and as you can see it’s pretty straightforward.
Step 9: Register vehicle in your name
At this point, you should have a set of documents:
- Loan approval and requisite funding (deposit into your account or check to your name and seller name, etc)
- Insurance cards with your new vehicles VIN and license plate
- Smog certificate from the seller, if necessary
- Vehicle title signed by the seller
- Bill of sale signed by the seller
You now need to register the vehicle in your name within the next 10 days. Doing it at the DMV can take forever especially given there are no appointments for months in many locations, but if you are willing to pay ~$50 to become an AAA member they can register the vehicle transfer at their locations. I used this option because of some time constraints and was in and out (literally from parking to exiting the parking lot) in 20 minutes, and that was about 10 minutes longer because I filled something out incorrectly the first pass.
Step 10: Enjoy your new (used) car!
That’s it! You can now enjoy your car.
Hopefully this post helps to lay out the process for buying a used car from a private party in California. I had to Google a lot, open up dozens of links, and cross-reference material all to give myself peace of mind that we were purchasing the vehicle correctly. It’s definitely a process requiring of trust on both sides but if planned well it can become a lot easier.
Let us know if you have any questions!
Disclosure: Overlanding Taco invests hours of testing and writing to help you plan your trips, find gear, and other things to help you live a better life outdoors. We sometimes link out to products on Amazon and other sites. We get paid a commission if you make a purchase, but that does not influence our recommendations.