My strategy for buying a used car on Craigslist (or from any private buyer):
1. Assume that the person selling the car is a con artist (unless it's a licensed dealer).
The vast majority of vehicle fraud is committed by private sellers. Con artists impersonating private sellers have been known to sell stolen vehicles with false paperwork, salvaged vehicles without disclosing damage, vehicles with tampered odometers, etc.
If you find a deal from a private seller that seems too good to be true, it is. Walk away.
2. Meet the seller at a public place and bring a friend.
Don't meet someone at their house. Don't meet them in a deserted parking lot. Don't meet them by their van that's parked down by the river.
Meet anyone you contact via Craigslist in broad daylight if possible, and always at a very busy location. You and your friend should both be alert and should stay together.
3. Ask why they're selling, and ask for records.
Get the story on "why." Sometimes people have a really good reason for selling a car, but most of the time the reason is simple "I don't want it anymore." If you get some sob story (or some complicated story), beware. The more interesting the story, the more likely the seller is trying to trick you.
As for records, ask to see maintenance records. If they don't have them, it's not a problem, but it is cause for suspicion. Most private sellers keep copious records.
4. Insist on a test drive, but get ID, registration, and proof of insurance first.
You must test drive a used car before you buy it. But before you and your friend jump in a car with a stranger, ask to see ID, insurance, and a registration card. Make sure all the names match, that the photo matches, etc.
If they give you any business about providing all this info, explain that your insurance agent told you to do this. If they still won't produce all this info, leave.
If the names on the docs don't all match, make sure you understand why.
Your test drive should include some stop-and-go, some highway, and a careful review of every feature and function. Check the A/C and heater, all the windows and locks, 4wd, etc. If it takes you less than 20 minutes to complete a test drive and check every function, you're probably doing it wrong.
NOTE: To test 4wd, you'll need a dry parking lot. Put the vehicle in 4-HI, drive forward slowly, and crank the steering wheel as far as you can to the left or right. If the 4x4 is engaged, you'll feel a slight lurching as you turn.
If that doesn't work (meaning you don't feel the lurching), try the same thing in 4-LO. If that doesn't work, than you're either not really in 4wd (some vehicles have hubs that need to be turned) or there's a problem.
5. Know what the car is worth (as best you can).
Check all the following sources:
See what similar cars are selling for at your local dealers
See what KBB and Edmunds have to say
Look for similar vehicles on eBay and check their "buy it now" prices
Check similar cars on Craiglist, either that were listed in the past or that are available in nearby markets
This is the hardest part of buying a used car - at the end of the day, you'll never really know what it's worth. However, if you do your homework and make sure the vehicle is in good shape, you'll do OK.
My rule of thumb is to try to get within $500 of what I feel the value is. $500 is close enough.
6. Don't hassle private sellers.
Don't ask the seller to discount their car for every little ding or dent; Don't waste someone's time just because you're curious; Don't try to beat them over the head to get an extra $50 off.
Basically, don't treat private sellers like a dealership salesperson. Not only because private sellers are human beings (LOL), but because at some point they will tell you to go away. You can't abuse private individuals like you might a dealership salesperson.
7. Take your time.
The worst car-buying decisions anyone has ever made all have one thing in common: they were rushed. Even if you find the perfect car for the perfect price, wait a day. You might lose the car, but odds are you'll save yourself from paying too much, buying something you don't actually want, etc.
8. Get an inspection.
I bought and sold cars professionally for years. I know more than most people when it comes to spotting problems...and I wouldn't dream of buying a car from a private seller without taking it to a trusted mechanic or pro vehicle inspector.
The fact is, you can't spot all the problems yourself. A second set of eyes always sees something you missed. Besides, it's cheap - $75-$150 is all it costs.
9. Make sure you know the law regarding emissions in your state.
In some states, the seller must provide proof the vehicle passes emissions. In others, the buyer is one their own. Make sure you know what the rules are in your state, and - better yet - make sure the vehicle passes emissions before you buy.
If a vehicle doesn't pass emissions, it can cost a LOT to fix.
10. Don't bring cash.
Once you've decided to buy, offer to meet the seller at the bank. They must provide a clear title in their name, and you can give them cash right at the counter at the bank. You can also create a bill of sale (only the title will usually suffice for a private transaction). Check your state's laws to be sure.
Finally, listen to your gut.
If you get a bad feeling about the way someone's acting, the way the vehicle drives, the story you're being told about the reason for the sale, the fact that the seller's a Raiders fan - whatever - listen to your gut. There are millions of cars in the world. You can always find another one.
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