What is a dealer or private seller required to disclose up front when selling a used car?
There are strict requirements for dealers when it comes to selling a used car, but not so many for private sellers.
Dealers are required by the Federal Trade Commission to display a Buyer’s Guide inside any used cars offered for sale. The Buyer’s Guide includes:
- Warranty information.
- Available service contracts.
- Return policy.
- Other useful information about the vehicle.
Also, any used vehicle deemed “certified” must meet many requirements. This may include having a mechanic perform a complete inspection, reach a satisfactory conclusion, and have a report available for prospective buyers.
Car dealers frequently sell cars “as-is.” Typically, any vehicle sold as-is carries no warranty and the dealer is under no obligation to fix anything that goes wrong with the vehicle after selling it.
Private sales are generally considered as-is and there is often little a seller must disclose to the buyer, so it may be up to the buyer to do their homework and have a mechanic check the car. Private sales usually have their benefits, such as a lower price, but they come with few guarantees. If a seller does make a promise or guarantee, get it in writing on a Bill of Sale.
What kinds of records should I ask for?
When looking at used cars, information is key. Ask the dealer or seller to provide all records they have for the car, including:
- Accident and repair history.
- Maintenance records.
- The Vehicle Identification Number (VIN).
- All factory recalls and proof that the issue was fixed.
- A recent emissions certificate.
- The number of previous owners.
Some dealers or sellers may offer you a vehicle history report. A vehicle history report is a document that lists information about a vehicle’s past. Reports like these can include information such as:
- Accident and repair history.
- Title status.
- Past owners.
- Use as a taxi, rental car, or government or corporate fleet vehicle.
- If the vehicle was leased or purchased when new.
- Odometer rollbacks or changes.
- Open recalls.
- Current and past liens.
- Service records
Not all information in a vehicle history report is bad. Knowing what a car has been through, however, arms you with knowledge that may help you negotiate a better deal or decide to walk away.
If the provided report seems light, you can use the VIN to get additional reports from other services. It may seem pricey to get several reports, but it may be money well spent given the investment in a car. Also, while vehicle history reports are useful, they are no substitute for an independent mechanic’s inspection. Accidents or other issues are not always reported, especially if no one filed an insurance claim or police report. A good mechanic may spot issues that even the most comprehensive reports may not reveal.
Lastly, you may not want to rely solely on information provided by a seller or online reports about a vehicle. Researching the car you are interested in before you see it in person can help you figure out if the information being provided is accurate, or if valuable features have been removed. Start with an online search for the year, make, and model of the vehicle.
- Look for brochures, lists of trim levels and options, and other information.
- Visit car-value websites to research specific prices for the trim, condition, and mileage.
If you are still interested after gathering as much information as you can, ask the seller to set up a time for you to come see the vehicle in person and take it for a test drive.
What should I look at when inspecting a used car?
When inspecting a car, keep in mind that it is a complex piece of machinery. There is a lot to look at. Be sure to bring some items with you:
- History reports and other research.
- Notebook for recording asking price, mileage, condition, etc.
- Lighter-socket power plug/USB cord for testing plugs.
- CD or auxiliary audio cable to test the audio system.
- A friend or family member for moral support, to observe things you may not notice, and for personal safety reasons.
- Driver’s license and insurance card.
If you are comfortable rolling up your sleeves and checking under the hood, you may want to also bring:
- A flashlight for looking under the hood and under the car.
- Paper towels for checking fluids.
- Magnet for detecting bodywork repairs.
When you arrive at your appointment, resist the temptation to hop right in and go for a ride. Check some things out first. While you do, ask the seller or salesperson if anything appears out-of-place, or if they know about any problems.
Talk to the seller first while giving the outside of the car a thorough visual once-over. Look for:
- Dents or scratches.
- Bad paint or rust.
- Missing or broken parts.
- Door handles and any exterior buttons that don’t work.
- Doors that don’t open and shut.
- Hoods and trunk doors that don’t open, shut, lock, or unlock.
- Tires that are cracked, cut, or bubbling.
- Lights and signals that don’t work.
- Windshield wipers and sprayers that don’t work.
- State tags that are current (if applicable in your state).
- The VIN, which should match the number you were given.
While inspecting the outside, you may want to look under the hood and under the car. Here, you are looking for:
- No oil or leaking fluids above or below. A dusty engine is OK.
- Battery free of corrosion.
- Fluids are full and appear clean and free of grit or dirt.
- No smell of gasoline, exhaust, or smoke.
- Hood prop or struts that support hood well.
- No signs of rust.
Once you get inside the car, you will want to inspect and test the following:
- Check every button, switch, and function within reach.
- Look at every seat, seat belt, door, and carpet, for signs of excessive wear or damage.
- Inspect the steering wheel and airbags carefully for signs of use or damage.
- Confirm all the windows open and close smoothly.
- Look for an owner’s manual in the glove box.
When you first start the car, you will want to:
- Check for warning lights on the dash.
- Turn on the headlights, heat, AC, fan, and the radio system.
- Adjust your mirrors, steering wheel and the seat.
- Give the horn a test honk.
- Listen for a smooth and quick start.
- Before moving, make sure the car idles smoothly.
- Confirm there is no smoking, rattling, or banging noises coming from the engine.
Special considerations for electric, hybrid, or plug-in hybrid vehicles:
- On the test drive, take the car to a charging station, verify it charges and the plug stays in firmly while charging.
- Check the battery-health indicator in the on-screen menu.
- Confirm that the electric-only driving mode on hybrid cars works correctly.
Though it seems like a lot of work, doing a thorough inspection can weed out undesirable cars. Once you are satisfied, it is time for the test drive.
What should I look for during a test drive?
Test-driving a car is critical. It shows you how the car feels and behaves in common driving situations and can uncover problems with the vehicle.
Dealers may ask for your driver’s license, proof of insurance, and may even want to run a credit check first. Private sellers may ask for these, or a cash deposit too. As for the drive itself, most dealers insist that the salesperson goes with the buyer. Private sellers may ask to go with you as well, but many will just hand you the keys. Either way is fine, just keep in mind some personal safety rules if you get into a car alone with a stranger.
Dealers and private sellers have the right to refuse to allow a test drive. If they refuse, it could be for any number of reasons, but this can be a red flag that they know there is something wrong with the car.
On the drive, it is best to limit distractions and focus on the way the car feels and performs. Take a route with different types of driving: city, highway, and bumpy roads.
Here is a list of things to test and pay attention to while driving:
- Does the engine accelerate smoothly and sound okay?
- Does the transmission work properly?
- Do the brakes feel strong and firm? Does the parking brake work?
- Does the steering feel comfortable?
- Are there strange noises, squeeks, or rattles?
- Do all the gauges and interior features work?
After test-driving the car, if you are still interested, you may want to ask if you may take the car for a professional inspection. A trained mechanic can spot issues that you may not. Plus, a mechanic has specialized knowledge and equipment to test vital components. While it is daunting to spend money on a car you do not own, an inspection by a mechanic is worth every penny. A favorable mechanic’s report can reassure you and give you some leverage during price negotiations if repairs are needed. A bad report can help you avoid the car altogether.
A seller is allowed to refuse to let you take their car for a professional inspection. This is another red flag. It may indicate the seller knows about a problem with the vehicle they are not telling you.
How can I evaluate a used car purchase when I cannot see it in person?
Shopping online for a used car can land you a pretty good deal, especially if the car you want is popular where you live but cheaper elsewhere. Plunking down a large chunk of change for something you have only ever seen through blurry pixels can leave you open to some big risks. Plus, with increasing demand for used cars, scams and fraud are on the rise. However, with the right preparation, you can still get a good deal.
When you find an ad for the car you want, thoroughly read it. Typically, the longer the description, the better. It can indicate that the dealer or owner knows the car well and is willing to put forth some effort to sell it. However, just because an ad is short does not mean you should skip it. At a minimum, look for this information:
- Year, make, model.
- Trim level.
- A description of the car’s condition.
Next, study the photos closely. Then, contact the seller and request more photos and information. Talk to the seller on the phone or on a video call where you can see the vehicle.
Often, you can get a feel for the person and can get answers to questions quicker and easier on a call. If something does not feel right, it may not be. If the seller refuses to schedule a call or gets angry that you asked, move on. Con artists prefer to shield themselves behind text messages and emails. A motivated seller should be happy to chat about their vehicle.
When buying a car sight unseen, a warranty or money-back guarantee can provide some peace of mind. More often than not, however, it is buyer beware. If the car seems good, ask to schedule a mechanic’s inspection. If a seller refuses to take the car anywhere, ask if a mobile vehicle-inspection service can inspect the car. If the seller agrees, find a local mobile inspection service or mechanic. If the seller refuses, you may want to think twice.
When paying for a car you buy online and plan to ship or pick up, you may want to use a third-party escrow service. This service will hold your money and report to the seller that you paid. The seller can then release the car and send it on its way. Once you receive the car, the seller will receive payment from the escrow service.
As for shipping services, request quotes from several companies. Then, check out reviews of each, and read the fine print on liability if something happens to the car while in transit. Dealers may offer shipping services, so consider those as well.
Is it safe to buy a used car as-is?
While you may find a lower asking price on a car offered for sale as-is, there are some things to think about. Usually, a buyer of a vehicle in as-is condition has limited rights and is responsible for any repairs needed. The seller is under no obligation to make or pay for those repairs.
Read the Buyer’s Guide carefully before signing. Any warranties, return policies, or other seller’s obligations will be spelled out. Look up the warranty laws and regulations in your state and the state the car is located in, or ask a lawyer about the state laws involved.
A buyer of an as-is used car from a dealer usually has only a few options for legal recourse. Those apply if:
- An express written warranty exists.
- A service contract is purchased within 90 days after the sale.
- State law prohibits as-is sales.
- The dealer did not strictly follow state-law requirements for selling the car as-is.
- The dealer did not provide clear notice that the vehicle was offered as-is.
There is a kind of warranty governed by state laws called an implied warranty. An implied warranty guarantees that a product sold will do what it is intended to do. It can also guarantee that if a salesperson recommends a product based on the buyer’s stated intended use, that it will meet that intended use. Typically, if a product fails to do either, it can be returned for replacement or refund. For used-car sales in most states, selling a vehicle as-is allows dealers to sidestep implied warranties. In some states, like Massachusetts and Washington, this is not allowed.
Lemon laws vary from state to state, but typically require dealers to accept returns on cars that are defective or lemons. A new car may be considered a lemon if it is brought back to the dealer for the same repair four or more times. If this happens, the dealer must either replace the car or refund the purchase price.
Although the same level of protection is not available for used cars bought from dealers, some lemon laws do still apply, but only for a limited time after the sale. If no used car lemon law exists in your state, and you bought a lemon, you may want to ask a lawyer about your legal options.
As for private party sales, if a vehicle is not covered by any warranties, there may be little recourse for the buyer if something goes wrong. Unless there was some form of fraud, or another legal violation, you may be stuck. Lemon law buyback regulations usually do not apply to a private party sale.
If you go ahead with a private party sale, it is best to get everything in writing. Some state's laws may require a Bill of Sale. Even when not required by law, completing a Bill of Sale is a good idea. It can be used as proof of the sale price when you go to register your new-to-you car at the local DMV. A Bill of Sale may also be helpful if there is a problem down the road.
Overall, it is possible to find a good deal on a good used car. Just be sure to do your research, decide what level of comfort you have with a car with no warranty, and take your time to find the right one. Happy shopping!
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.