Guide to Buying a Used Car on Craigslist

The following is a guest post from reader Andy, who bought his last vehicle on Craiglist and shared some of his experiences and advice.

I bought our last vehicle used on Craigslist (CL) and am a big advocate of buying used and direct from private parties (i.e. not from a used car dealer). New cars depreciate significantly when you drive them off the lot and that works to the disadvantage of the used car seller and the advantage of the buyer. Also, provided you can avoid lemons and rust, with regular maintenance today’s cars (especially those with a V6 engine) can reliably last up to two hundred thousand miles before they need to be replaced.

I think you can get a better deal when buying from a private party because you cut out the middle-man (the dealer) and can often negotiate on price if you are a serious buyer and show up with cash. The market for used cars is inefficient. That doesn’t mean you can show up and steal a late model Mercedes from a seller for $500. Kelly Blue Book values on just about all models are easy by anyone. However, the market for used cars is inefficient with regard to quality. In general the KBB value on a car (same make, model and mileage) that has been thrashed by a teenager and never had an oil change is the same for one that has been babied by a retiree who only drove it on sunny days and took it regularly to the dealer for all scheduled maintenance. To me, getting a great value on a used car is finding the latter and avoiding the former, and being willing to pay close to blue book value when I do.

Unlike going to a used car dealer, when buying a car on CL you need to do some research upfront and determine the make and model of car you want to buy, or at least narrow it to a couple of options to narrow your search. Also I try to know what year(s) I am looking for. Models change every few years and while it is cheaper to buy a car dating to just before a model change you want to be sure there are no significant upgrades in the more recent model that you’d prefer to have (i.e. less rollover risk in an SUV, airbags, or a significantly better engine). Also, Consumer Reports is an excellent source of information on the performance and reliability of brands, makes, models, and years. Once I know what car I am looking for I next begin my CL search.

Within the cars and trucks section of Craigslist there is a drop-down box next to the search box that defaults to “cars+trucks.” I always click on this and bump it up one selection to “cars & trucks – by owner” which eliminates most of the used car dealers, though not all. Another reason I avoid dealers in addition to the lack of transparency is adverse selection. Used car dealers may carry some cars they bought at auction that may have had damage or other unsavory history. This is a big investment and I’d prefer to avoid those risks. Here are the steps I use to find a car I feel comfortable buying on Craigslist:

1. Search for the make and model

I generally only search locally but may hit several nearby CL regions—anything within driving distance. Look for ads with pictures. Ideally the seller will be the original owner but that isn’t a deal-breaker. There is a trade-off between year, mileage, and price. I generally have an idea of the years I am looking for, like 2004 (when the displacement of the engine was increased) to 2010, and within that range I am looking for something with around 60k miles or less. Something older with fewer miles may be cheaper than something newer with more and I generally emphasize lower mileage over newer provided there have not been significant changes to a model during the years I’m comparing.

Positives: original owner, serviced at the dealer, synthetic oil (shows they care), highway miles, always garaged, wife’s car, extended warranty, thorough/thoughtful description, a legitimate reason for selling, located in an affluent area

Negatives: modified, salvage title (run!), visible body damage, selling for my neighbor, 20” chrome rims, very short or sketchy description

2. Contact the seller

After finding several promising candidates priced reasonably around blue book value I will begin by e-mailing the seller to get more information about why they are selling, whether they have maintenance records, and ask whether they are flexible on price—it never hurts to ask at this point. Service records are very important. I want to get some assurance that the car has been well-maintained which means regular oil changes at the very least. If I can’t get comfortable that this is the case I move on. Assuming everything seems legitimate I will get the seller’s phone number and call to set up a time to see the vehicle at their home.

3. Visit and test drive

The next step is to go and see the seller and the vehicle. You may want to bring your spouse or someone who knows more about cars than you do. At this point I am learning as much about the seller as the vehicle itself. Remember, a car from an anal person who changed the oil religiously costs the same as one from a slob who neglected it entirely. The former is more likely to have a neat home with reasonably maintained landscaping and other nice vehicles.

I thoroughly go over the car inside and out. Look for any signs of collision damage, which can portent structural or suspension issued you want to avoid, and any extreme wear that seems out of place with the age and mileage of the vehicle. The car should appear clean and well looked after. Any sign of water damage on the interior is a red flag.

Ask to see maintenance records and ideally they will have a thick book of receipts from a dealer or lube shop. There is some chance they change their own oil which is okay as well, provided they can tell you the exact mileage of the last change and when the next one is due on the spot. Start the car and make sure everything works. Listen for any odd sounds. Take the vehicle for a test drive (typically with the seller) and it should drive very smoothly and not do anything out of the ordinary. Even if you aren’t experienced at all working on cars you should be able to notice negative feedback the car is giving you on a test drive—it just won’t feel or sound exactly right.

I would confirm again why they are selling and then thank the seller for their time, tell them I have a couple of other cars to look at and will get back to them the following week.

4. Narrow the field.

At this point I will have a good idea of my front-runner. Before making an offer I will ask the seller if I can have my mechanic go over the car. If they say “no” that’s the end of the story. I also order a Carfax report on the vehicle to make sure it was never in an accident. I also confirm that the seller holds the title to the car or if they have a loan against it they can obtain the title upon paying off the balance. Assuming my mechanic doesn’t find anything wrong, I’m ready to move forward.

5. Make an offer

If everything checks out I make the seller a serious offer. In general I have a good idea that the car is worth more than blue book at this point because if I’ve done my homework it is an exceptionally-maintained example of the make and model. Their asking price should be close to blue book value as well. I will call the seller and offer a few hundred dollars below the blue book value but be willing to come up if necessary. At this point I want the car but am not willing to overpay. But the idea is not to rip off the seller, either. Paying a hundred dollars more for a car that has been well maintained is vastly smarter than saving a hundred dollars and ending up with a car with lots of problems. That’s the name of the game.

6. Close the deal

Once a sale price is agreed upon, I’m ready to make the purchase. At this point it is a fairly mechanical process. I go to the local motor vehicle administration’s website to find out the specific requirements pertaining to temporary tags to get the car home, what forms and documents I need signed to have title transferred legally, and anything else that is relevant. I also place a call to my auto insurance agent to notify them I will be buying a used car from a private party and make sure it will be covered until I get it home, at which point I will arrange permanent insurance with them. Most insurers will automatically cover newly purchased vehicles for a brief period between when you buy and your next billing cycle.

I arrange to meet the seller and take possession of the car in exchange for cash or cashier’s check, in the case of a large sum or the proceeds from an auto loan. This is where the rubber meets the road. You want to ensure that you walk away from the transaction with the vehicle, a signed title, and/or any documents required to transfer title to yourself in your jurisdiction. In some cases a notary is required, which you must arrange. If the seller has a lien on the vehicle you may want to accompany them to their lender’s office to pay off the balance and obtain the title, which may reside with the lender. This is crucial—without the title you do not own the car.

By this point in the process I’m a little sweaty but happy with my new (to me) vehicle and the price I’ve paid. Most importantly, while nothing is 100% certain, I feel I’ve done my utmost to ensure the investment of both time and money I’ve made will result in reliable transportation for many years to come.

Comments

  1. Good post.

    I have bought/sold cars off Craigslist.

    I had to giggle a little on the maintenance part, because I find people run in two camps, for the most part. The “don’t maintain the car at all – it’s obvious” camp and the “over-maintenance” camp. Not a whole lot in between. One trick I do is just to simply check the oil. But, my opinions over time have probably formed from very trashed vehicles that had obviously not had an oil change in forever, and the immaculate vehicles that look brand new under the hood (which are the cars I buy).

    BTW, people look at you strange when you ask to check the oil. I don’t think most people do. Maybe most people just ask for maintenance records.

    It personally makes me nervous to deal with too much cash (the biggest purchase I have done was about $6k, and I sold another vehicle for $3k at some point). Since driving newer cars (and dealing with larger sums of cash) we have kind of left the private market, but am sure we will return when our kids start driving. Will teach them the tricks of the trade.

    As an aside, when I sold my Mustang, the best offer I got from a dealer was $500. I thought it was ridiculous, so I sold it on CL. IT took less than a week and I got a full $3k offer for it.

  2. I think one of the smarted financial moves a person can make is to buy used vehicles. I buy them off Ebay, but that is only because the local supply on Craiglist is small. With older cars I also save on insurance since I do not carry collision.

    Here’s an example of two cars I purchased off Ebay
    1998 Chevy Venture – bought for $3500, with 98,000 miles on it. It was wrecked 3 years after purchase and the other parties insurance paid be $3000 on it. It had 145,000 miles on it at that time. I did spend about $1200 on maintenance.

    1995 Toyota Camry. Purchased for $4500 5 years ago with 101,000 miles on it. I still am driving it and today it will eclipse 200,000 miles this afternoon on my ride home from work. Except for oil changes and tires, I have only spent $650 on maintenance.

  3. Great article and timely, too! I am just about to use CL to buy a used car…

    Thank you!

  4. Thank you for sharing your tips in this great article. Getting the title is a little trickier if the seller has a loan from the manufacturer’s affiliated finance company (Toyota Financial Services and the like). Good cars sell fast. Have you lost out to other buyers because you always go home and think about it? Also, what answers do you look for when you ask why they are selling? Can’t they always tell you they will buy a new one after they sell this one?

  5. Nice article. I sold a car on Craigslist once, but you wouldn’t have bought it – it was over 10 years old, had 250,000 miles on it, had failed state inspection, and the air conditioner did not work. But it was a Honda Accord, and it sold pretty quickly.

    If someone wants to buy a used car, I think your tips here are very helpful. This is one area where I disagree with the common financial advice given – I’m a big believer in buying new, and driving it until it is falling apart – see above sale ;-). I think the whole depreciation thing is overstated, particularly for reliable models. Take, for example, the Accord mentioned above. We bought that car new, and at the time, we had been talking to the boyfriend of my wife’s friend, who owned a used car lot and was looking for a decent used car for us. When he found out the price we had negotiated for the car, he told my wife he wanted her to go buy him a few so he could sell them on his lot.

  6. One point is if you want to filter the criteria to specific sub-values use the craigslist search variables. For example if you wanted to search for only 2002, 2003 or 2004 Suburbans you would use the following string in the search box (removing the quotes) “suburban (2002|2003|2004)

  7. Could you provide more detail on exactly how you go about taking the car to your mechanic. Do you ask the buyer to take the car to your mechanic? Do you take the car to your mechanic yourself? If so, do you leave a deposit or some sort of collateral. Or do these sellers just let you drive off with the car to take it to the mechanic? Just curious how you work this exactly…

  8. Good stuff.

    A lot of people are weary of buying a car from Craig’s List or even Ebay, but they need to know that if you do it right, then you can save a lot of money.

    Thanks

  9. Derek,

    The mechanic piece is easy, you just drop it off at the buyer’s specified mechanic & they pay for it. I have done several completed sales from the mechanic’s lot.

  10. One reason to check carfax is to weed out the former rental cars. I found that several new-model cars on CL were former rental vehicles which are usually driven very hard.

  11. @ Derek – I have never bought a new car, only used one primarily from private parties (though our last purchase was from a dealer). In ALL cases, I have taken the cars in question to the mechanic of MY choosing for an inspection, at my expense.

    This is where is pays to have “your own” mechanic, someone with whom you have an established relationship (finding “your own” mechanic takes some time and research – by and large I avoid Jiffy/Spiffy/Quickly lube places for a number of reasons. An established, experienced mechanic is oftentimes about the same price as chains and cheaper than dealerships but usually quite knowledgable, have more staff stability (if there is a staff) and are more interested in keeping up their reputation in the community.

    The cost of an inspection is minor compared to the potential cost of something I might miss (I know cars, but am no professional). Inspection cost has run anywhere from as high as $40 (hourly rate) to, “Hey, just bring us a dozen donuts the next time you are in for something” (obviously, I had been taking my VWs to this guy and buying my own parts from him for years … plus VW/Audi/Porcshe shops are fun and quirky anyway).

    As with a house inspection, I would insist on my own inspection by my own people. And have walked away from cars where my mechanic has found something I missed. Money very well spent.

  12. carfax is only for over $15,000. they could have 10 accidents and not be reported as long as they are under 15K.

  13. I agree with ttfitz to a certain point.

    A car that doesn’t depreciate fast isn’t as much of a deal compared to a car that depreciates drastically. If your good at negotiations, you can sometimes get a new Honda or Toyota for the same price of car a few years old. The american cars seem to loose their value drastically once off the lot. It’s simply supply and demand and Americans have made hondas extremely expensive.

    Of course if we’re talking about 5 or 10 year old cars, it’s hard to compare the cost to a new one. But the cars that are most in demand do not drop as a lot of people assume.

    Clark Howard recently had an article about how even in this time, you might be better off buying a new car than a used one.

  14. My advice: If you find a good car, you need to take some risk and buy it, or expect to lose the sale. I just sold a decent car on CL, that had all maintenance records etc. It took 3 days to sell. The first people followed the script above, wanted to pay blue book value, and wanted to come back a few days later for an inspection. They lost out within 24 hours to people who offered immediate cash- $700 over blue book value, and took the risk of bypassing the inspection.

  15. If someone wants to pay $700 for the privilege of buying a potential lemon, I say let them. I wouldn’t feel bad if I lost a sale under conditions like that.

  16. @Chris: You’re right – it’s a significant risk. But, if my experience is an indication, enough people are willing to take it in order to get a car that’s been well maintained. In other words, cars that sit long enough for someone to go through this whole process are likely lemons.

    Risk-averse people may be better off at a used car dealership, where they’ll get a warranty.

    @jbo: I agree. I bought a new Corolla LE, with decent options, for $14.5K out-the-door. That’s hard to beat in the used car market. A 4-year-old Corolla still goes for around $10K according to KBB. That’s a depreciation of 8% per year. I’ll take a new car at that rate.

  17. This is great… I’m planning on selling my 2004 mazda6 w/ 52k miles and I didn’t even think about craigslist. These pointers are great for both the buyer and the seller

  18. christine says:

    I bought my car off craigslist about two years ago and got a great deal. I haven’t had any issues with the car at all. I pretty much followed the same steps outlined above. I encourage other weary buyers n sellers to give it a try.

  19. i have used CL to buy and sell cars on behalf of neighbors, friends and family in need of help. if i think about my average transaction time, i can really say it has taken no more than 3 hours cumulative per deal, including all steps mentioned above and some more. my last was selling a 97 ford taurus for $2,500 cash in less than one hour total.

  20. I have to say, I prefer buying used cars ten times more than buying new ones. it’s good if you make a decent drive test, listent to the engine, check the motor oil before making any rash decisions. the most recent car I bought was off a craigslist site, carsadmaster.com, and it turned out a-ok…nice to still be able to find decent reliable folk in this world :))

  21. Hong Kong Phooey says:

    I bought my car off of cl earlier this year. It had no engine and transmission. Then again its a project car so whatdya expect…

  22. suspension issued -> suspension issues? :)
    Thanks for the info.

  23. I’ve also bought and sold cars on Craigslist. Some for personal use, others just to flip for profit and one thing I’ve learned if nothing else is to not even bother to go look at the car unless and until the seller gives me the VIN.

    Why take a ride all the way to see a used car from someone you don’t know flying blind. At least get the vehicle history. I know Carfax isn’t perfect, but you can learn a lot about a car just by getting the Carfax like how many owners it had, if it was a fleet vehicle or personal vehicle, if it was in any accidents (sometimes they don’t get reported), and if the mileage was rolled back.

    That is some important info to know and it’s best to know BEFORE you take the ride. Knowing beforehand can save you lots of time and aggravation and money too. Also you can be more prepared so when you get there you have a better idea of what you’re looking at.

    One other thing is to make sure you are not buying the car from someone who is trying to flip the car for profit. Sometimes it’s real obvious, but most times it’s not…

    …UNLESS you know what to look for. I actually just published a video on youtube that shows one of the easiest ways to know if the seller is a curbstoner just trying to flip the car for profit. Click my name above to watch it.

    I’m not against flipping cars as I do it, but I only flip cars that I would let my wife or mom drive. You can still make good money on cars like that.

    Anyways, great post and check my video out to see how to spot a car flipper :)

  24. This is a good article. I’m surprised he uses the blue book value as reference – I thought this was mostly used by the name brand car dealers to justify their retail prices. I used Edmunds.com a few years ago and it seemed to be more realistic.

    It’s all in what you’re looking for. I work in a tech company and most of my coworkers seem to all think paying $10k+ for a car is business as usual. On the other hand I’m from a frugal family where most folks drive sub-$500 cars. Personally I like the sport of keeping the cost down more than giving in to the greed/convenience of having a new car.

  25. What is the farthest you would travel to check out a CL car? I’ve got my eye on one that is about 90 miles away. Worth the trip or should I keep looking?

    • Stephanie says:

      If you are serious about getting something used off Craigslist, invest in a month of Autocheck. It was 48 bucks and I used it at least 60 times. Weeded out a lot of stuff. It’s not perfect but one came up as frame damage, one had been auctioned 5 times, one had a re-set odometer. Said 127k and the check reveled it was 358k. He knew he was busted.
      If the seller refuses or dodges giving the VIN, don’t waste your time or gas.

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