I have learned a lot about negotiating and due diligence on a car when buying privately. This is from my own experiences and talking to other people that have purchased used vehicles and what they feel is important. If you don’t think you need to do any of these items, then feel free not to.I just whipped this article up from my recent experiences and I will continue to add to it over the next few weeks.

Due Diligence – Inspection Reports and VIN Checks

This involves checking out the vehicle for history or information that the owner either does not want to disclose or just plain does not know.The VIN Report is a history of whether there are liens against the vehicle, it has been written off in an accident, where it has been registered, or other information. You can pay for it at your local registry or there are a lot of websites that offer a flat rate fee to check a number of vehicles over a certain time period. You should always, always, always do this check. It is cheap, quick, and can show you a lot. You can even ask for the number over the phone before you go see and a lot of owners list it in their ads.The Inspection Report is an inspection by an actual mechanic shop to see the status of the car. They will identify items needing repair or that will need to be replaced soon. If the tires, brakes, and shocks are all on their death bed, then you might want to drop the price a bit to factor in this upcoming expense.

Deposit and a Contract

If you think you have a good deal, but you need time to do some further checking (VIN and Inspection) and get the financing arranged, then you will probably want to put a deposit down and do up a little contract.The deposit will give the owner some security that you aren’t just going to walk away, so he gets some compensation if he turned away other legitimate buyers and you end up not buying the vehicle.The contract part is a good way to make sure there is an understanding between you and the owner as what the expectations are. What the final price is, what conditions need to be cleared before the deal can proceed, and a deposit so he will not sell to someone else until the conditions are cleared. If you don’t live up to your end of the contract then he can keep the deposit and if his vehicle doesn’t live up to his, then you should get your deposit back.Some conditions might be that the owner can keep the deposit if:

  • You do not finalize your conditions by a certain date.
  • You do not bring him the final payment by a certain time.

Some conditions for you, the buyer, to get your deposit back and back out of the deal:

  • The VIN number check for liens and accidents shows something he did not disclose to you when you asked.
  • The Vehicle Inspection comes back with an estimate on repairs needed higher than a certain amount of money.
  • The owner did not complete something he promised to do before a certain date (new tires, brakes, repairs, locating missing items, etc).

Bill of Sale

When you actually pay for the vehicle, you should get a bill of sale from the owner and make sure you get all the keys and everything at that point. You now own the car, but you can’t just drive away in it until it is insured and registered.UPDATE: Here is a free bill of sale that I created from other ones I found on-line.


You have to have purchased the car and have the bill of sale to insure it. Talk to you insurance broker about this. If you are needing to pick up the car sooner than later, then you can get them to usually fax a copy of the insurance pink slip to you.


You have to have the bill of sale and insurance papers to register your car. This is where you get the plates and register yourself as the owner of this vehicle at your local government registry.