Buying a car from a private seller is nothing like buying from a dealer; You can’t help feeling like the dealership has the upper hand. They know their business, and you can bet they’re going to make a profit. It’s tempting, therefore, to buy a car from a private seller instead — no overhead, no taxes, no hassle. But is it safe? Here are some tips to help you successfully purchase a used car from a private party.

Don’t Rush When Buying a Used Car

The more time you spend looking, the better your sense of the market value will be for that make and model of vehicle. This article will teach what sort of things you need to keep an eye out for. Once you’re ready, hit the market.

Craigslist is a common place for private sellers to advertise used cars, but it’s by no means the only place to find your dream ride. Sites such as AutoTrader.com feature online tools to search and compare vehicle listings from both dealers and individual sellers. eBay Motors offers Vehicle Purchase Protection, which gives buyers up to $50,000 of protection against certain types of fraud.

Test Drive the Car

Take the time to thoroughly test drive the car. First, walk around the car and check the exterior of the car and review for wear and tear. How do the tires look? Is there an uneven tread on the tires? Do the brakes and rotors look ok?

Look underneath the car and observe for any leaks. Does everything seem intact? Now, get in the car and start it up. Listen for any hesitation in the start. Let it sit for a few minutes running then take it for a spin. Make sure to travel in stop and go traffic and at highway traffic speeds. You want to listen and feel for anything out of the ordinary.

Test every electronic device that the car offers. One of the most important is the air conditioning. Let the A/C sit on for around 5 minutes to make sure it is running nice and cold. Don’t forget to also test out the heater, backup camera, signals, brakes, locks, and power windows. Once you’ve done your test drive, it’s always ensuring to have a mechanic check it out as well.

Get Your Mechanic to Check Out the Vehicle

If you’ve found a car you love that looks new and drives smoothly, it may seem like too much trouble to get your mechanic to examine it. Don’t skip this step! Ask the seller to bring the vehicle to your (not his) trusted mechanic for a thorough inspection. Or, you can use a mobile car inspection service, like Carchex. Mobile inspection can be particularly valuable if you’re planning to buy a car from a distant seller, sight unseen. Learn how to pick a good mechanic.

Research the Car’s History

Unfortunately, you can’t trust the seller’s assurances that the car was well kept all its life. Buyers often discover — too late — that a vehicle has been damaged by flood, patched up after a major collision or even salvaged from a junkyard.

Get a vehicle history report from a company such as Carfax that includes details on past ownership, service, and mileage. Carfax will even estimate the car’s value, based on its assessed condition. We highly suggest never buying a salvage title car unless you know what you’re getting into.

Always Buy a Used Car with a Real Title

Sometimes you may see a vehicle listed for far less than its Blue Book value because the seller doesn’t have the title. This is not a bargain you should make, because having a title is vital. A title is a legal document that establishes the owner of a vehicle. Without it, you don’t technically own the car — even if the keys are in your pocket.

States do permit vehicle owners to apply for a replacement title if the original is lost or destroyed. Don’t take on this responsibility yourself; let the seller obtain a new title before the car is sold. Otherwise, you may find yourself the owner of a salvaged or stolen car.

Check the Vehicle’s Title for Liens

A lien on a vehicle title means that a third party has a financial stake in it. Most often, the lien is held by the originator of the car loan until the loan’s paid off, but a vehicle lien may also be held by other creditors. The lien must be paid before the title can be transferred.

When you’re buying a used car from a private seller, there are a few different ways to research liens. Ask to see the title, which should state clearly if there’s a lien attached. You can also get the Vehicle Identification Number (VIN) and call your local department of motor vehicles to find out if there are any outstanding liens. Don’t trust the seller to give you the VIN; copy it down yourself.

Consider Using an Escrow Service

An escrow service can benefit both seller and buyer when you’re purchasing a used vehicle from a private party. How does escrow work? The company will hold the buyer’s funds in reserve until he or she gets the vehicle and title. Escrow also ensures the buyer has real money to spend and isn’t trying to scam the seller. There is a fee for escrow services, but you may be able to split it with the seller.

Review State Laws When Buying a Car from a Private Seller

Purchasing a used car isn’t as simple as buying a coffee table. Your state laws may require the seller to get an emissions test for the vehicle and/or an odometer disclosure statement form. A handful of states require the title to be notarized when it’s transferred. In other states, you need a bill of sale. Your local DMV can give you the list of requirements.

Get a Car Insurance Policy Before Driving Off

In most states, it’s strictly enforced that car insurance is required to drive on public roads. If you find yourself needing a reliable yet affordable insurance policy, Compare.com has you covered. We make buying auto insurance so easy that you can even purchase it on your phone during the car buying process, no matter where you are. You enter your information just once and you’ll get back multiple quotes from multiple insurance companies. Compare the rates and choose the company that best fits your needs. It’s that simple, so start today!

Register Your Car After Buying

Every state has their own set of rules to follow when registering your vehicle. Make sure to find out your state’s requirements. It’s almost always likely that you will need:

• An active car insurance policy
• An updated vehicle safety inspection
• Passed emissions test (Varies by state)
• Title with your information on it

Remember to take your time and not to rush during this process. Buying a reliable used car can be easy if you do the proper research. Happy car shopping!