Buying a Used Car
written by Mike Ballew February 3, 2019

When purchasing a vehicle, buying used is the way to go. But how should you go about doing it?

Dealer vs. Individual

The first choice you have to make when buying a used car is whether to buy from a dealer or an individual. Dealers are in business to make money, so you can expect their prices to be inflated in order to generate profits. When buying a used car from an individual, generally the price is more reasonable because no one is trying to earn a living off the sale. The primary motivation for an individual seller is to avoid getting ripped off by trading in their vehicle.

It used to be that when someone wanted to sell a car, they would place an ad in the local newspaper. Then other advertising methods came along such as Craigslist and eBay and the shopper tabloids you see in convenience stores. The advent of new advertising methods spawned Craigslist serial killers. That’s not to say buying a used car from an individual is too risky, but you do need to take certain precautions.


One of the things that you need to look out for when shopping for a used vehicle is curbstoners. A curbstoner is someone posing as an individual who actually sells cars for a living. Think of them as car flippers. What’s wrong with that, you might ask. When you buy a used car from a curbstoner, you get all of the disadvantages of buying from a dealer without any of the advantages.

Car dealers are bound by laws and regulations designed to protect consumers. These include lemon laws and title disclosure requirements. Because curbstoners are not licensed car dealers, they can skirt the law. Like a dealer, a curbstoner is selling used cars for a living so they tack on a healthy profit.

The best way to determine if someone is a curbstoner is to ask them to show you the car’s title and their drivers license. If the names don’t match, you’ve got a curbstoner. Curbstoners don’t register vehicles in their names because it would tip off the state that they’re operating an unlicensed dealership. Normal people don’t buy and sell dozens of cars each year. The curbstoner buys used cars on the cheap and resells them before the deadline expires for title registration.

Buyer Beware

When shopping for a used vehicle, it’s important to determine the condition of the title. If you see salvage, junk, totaled, lemon, flood, or reconstructed on the title, you need to walk away. It means the car has been in a serious accident or suffered water damage or some other calamity. You want a title with no such designation which is commonly referred to as a clean title.

As mentioned, personal security is an important consideration when shopping for a used car. There have been cases where people have advertised used cars and other items as a ruse to get people alone so they can rob or rape or kill them (or all three). Insist on meeting during the day in a public location where there are security cameras, such as a Walmart parking lot. Some counties encourage people to conduct such transactions in the police station parking lot. If at all possible, bring a friend. It’s harder to subdue two people than one. If you have a concealed carry license, it’s a good time to be packing.

Seal the Deal

Once you find a used car that you want to purchase, the best way to conduct the final transaction is to have the seller follow you to your bank. Whether you have the money sitting in your account or you’ve arranged for a pre-approved loan, the bank can hand the seller a cashier’s check and send them on their way. This method is beneficial for the seller as well because they know the cashier’s check is genuine and not something that you photoshopped on your computer.

If the seller prefers not to do that, give the seller a down payment to hold the vehicle while you go to the bank to get the rest of the money. The down payment should be something that won’t kill you if you lose it – one hundred dollars. People have been known to pose as sellers to steal down payments. Before you begin shopping, create a fill-in-the-blank generic receipt that spells out the details including the date, amount of the deposit, balance due, year and make of the vehicle, and a place for the seller’s printed name and signature. Fill it out and get it signed before you head to the bank.

Buying a used car from a dealer is more costly but it’s also more civilized. After you negotiate the deal, the salesperson hands you off to someone in finance and they take care of all the paperwork. It’s a pretty sure bet that you won’t get raped (other than financially).

Auto Brokers

If you don’t want to buy a used car from a dealer or an individual, there is another way. An auto broker is someone who goes to car auctions and shops for used vehicles on behalf of dealerships and individuals. They charge a flat fee anywhere from $200 to $500 per vehicle, and they are licensed and legitimate.

Let’s look at how an auto broker operates. Suppose a Toyota dealer takes a Ford in on trade. The dealer knows that since they’re a Toyota dealer used Toyotas sell faster than anything else. So they sell the Ford to a wholesaler and give their favorite auto broker a call. They tell the broker how much they have to spend and wind them up to go find a used Toyota. When a Toyota that meets the dealer’s criteria gets auctioned off, the broker facilitates the purchase.

Auto brokers can do the same thing for you. You give the broker your requirements such as make, model, year, color, condition, trim level and price range, and they start looking. When they come across something that meets your description, they buy it. Unfortunately, you can’t take it for a test drive using this method, but you pay far less than you would at a dealer. And, you avoid all the security risks of buying from an individual.

Final Thoughts

Whether buying new or used, purchasing a vehicle ranks pretty low on most people’s list of things they enjoy doing. One last word of advice: never let the seller know you’ve fallen in love with the vehicle. When you go to negotiate the price, that’s not the best place to start.

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Eggstack founder, Financial Planning Association member, engineer, and software developer.