How to properly buy or sell a used car

Experts provide tips to make sure you safely purchase, sell car


The recent news of the 19-year-old who sold a 1993 Nissan Pathfinder to the suspect in the Times Square bomb threat has sparked some questions about the best way to sell a used car.

The student posted the ad on Craigslist and received $1,300 cash for it from Faisal Shahzad, but there wasn’t any paperwork between seller and buyer, so there was no record of the transaction. Luckily, authorities were able to track down Shahzad through the VIN and cell phone number he used.

In order for a vehicle to be properly registered, the title would have had to been signed over to the new owner. In many states, a Bill of Sale and proof of insurance is also required. In a traditional deal, rather than the circumstances surrounding this unusual purchase, the lack of paperwork would have been a serious problem.

While there are some benefits to buying a used car from a private party, or selling a car yourself, it’s important to follow the legal requirements for your state. As a buyer, it is important to remember that vehicles sold by an individual are “as is”--without a warranty--and lemon laws only protect new-car buyers.

Here are some tips to make sure you are safe and satisfied with your used-car purchase or sale.

As a buyer or seller, you should know what the car is worth. Check out its value at ConsumerReports.org or other automotive information and pricing websites.
Before buying, get a trusted mechanic to inspect the vehicle. Also, look to see if the vehicle has been recalled (www.safercar.gov) and ask if the work has been performed.
The seller should sign the title over to the buyer and bring it to the DMV to get a new title and registration.
If the seller is not buying a new car, they need to remove the plates and surrender them to the DMV.
Some states require a Bill of Sale, which includes year/make/model, VIN, mileage, sale price and buyer and seller contact information (address and phone). Even if not required, it is good policy to document the transaction fully. It’s also good to exchange driver’s license numbers, just in case. (See an example of California’s Bill of Sale form.)
Beware of online sites where the sellers can be scammers. It’s best to buy a used car locally, so you can see it before you buy. Some online sites offer to ship and collect money through a third-party program, but those may still bring risks.
Take extra caution when buying a used car to make sure you get what is promised. For more on buying a used car, see our complete used-car buying guide and used-car ratings.