Things to Keep in Mind when Shopping for a Used Car

Buying a car from a private seller

Finding a great deal is part of the satisfaction of buying a used car.

But it’s best to ensure you understand what you’re buying, says Christopher Basso of CarFax Corporate. Some who have bought vehicles from private sellers have been shocked to discover their “bargain” cars were flood-, storm-, or crash-damaged and generally unsafe.

“It seems to be a problem across the United States,” says Basso. “These are cars that were in floods, hurricanes, major crashes. These are previously damaged vehicles that may have had their air bags deployed and not properly replaced, had frame damage that puts people’s safety at risk. These are cars that have had major damage that isn’t disclosed.”

Be aware of curbstoning

Such sellers are called “curbstoners,” and they peddle cars with what Car and Driver calls “troubled pasts.” Writes Car and Driver’s Paul Duchene: “Salvage titles, odometer rollbacks, cars that won’t pass inspections, flood-damaged cars and even stolen cars can be flipped onto unsuspecting buyers who believe the seller’s untruths. “’It’s a great car, I’ve had it for years,’ they might say.”

Curbstoning can be a big business. Many people who sell such cars may actually meet the threshold that takes them from private seller to auto dealer. That doesn’t mean your local auto dealer does shady deals on the side. Legally, an auto dealer is defined as one who sells a certain number of cars in a year.

The number varies per state. For example, anyone in Ohio who sells more than five vehicles – even privately – in a period of 12 months is required to obtain a dealer’s license, notes DMV.org.

One major reason dealers’ licenses are required is to protect consumers. Private sellers aren’t bound by the same state and federal laws as dealerships and can sell vehicles “as is” without any warranty, says DMV.org.

“Buying a used vehicle through a private sales transaction can pose several risks,” says Charles Cyrill, National Automobile Dealers Association, of McLean, Va. He said such sales put an extra burden on the buyer, who wants to know: “Is the vehicle safe to drive? Has the vehicle been damaged by a flood? Is it salvaged? Is it under an open recall? Do you know the seller?”

Car buyers receive all of these answers and competitive financing rates, access to factory trained technicians and more when they buy from licensed automobile dealers, notes Cyrill.

The New York Times recently reported that even car buyers in states far from floods, hurricanes and other disasters should proceed with caution when buying from a private seller.

Heavy rains and flooding in the first half of last year damaged an estimated 7,000 to 10,000 insured cars in Texas, according to the Times. There’s no immediate estimate on the number of uninsured cars damaged in those extreme conditions.

All the cars that were affected, however, are at risk for a myriad of mechanical, electrical and computerized damages that may make them unsafe to drive. That damage might not become obvious until months or years later.

Some owners of such cars clean them up and ship them out of the areas where they were damaged and sell them “as is.” Some sellers use illegal actions to obtain clean titles for the cars or even swap vehicle identification numbers with another car to hide the damage.

So does that mean you shouldn’t ever buy a car from a private dealer? No, but due diligence is needed.

What to look for when used car shopping

Check the car’s repair history through the National Motor Vehicle Title Information System. You can also obtain reports on sites such as CarFax that detail damage.

Don’t stop there, though. Look at the car. Do you see mismatched paint, mud in unusual places or a lack of bolts or screws? Does the car smell moldy or damp?

“We don’t want to discourage anybody from buying a car from a private seller and getting a great deal,” says Bosso. “You just need to make sure you know from whom you are buying. This underscores the fact that where you choose to shop and from whom you buy are just as important as what you are buying.”

In addition to making sure your new car is in good condition, it’s important that you have the right coverage to protect yourself and your vehicle on the road. Find out about Nationwide’s car insurance options to find the right fit for you.