Tips for Purchasing a Used Vehicle from an Individual

March 01, 2016   |   John O’Neal

It’s tax season…’s springtime (on the calendar though not yet in the air).  These things usually lead to people spending money on vehicles.  To save a few bucks folks often eye and buy a used vehicle from another person versus a dealership.  Before you take the plunge here are a few things to know to hopefully avoid being stuck with a used lemon.

First, there is no federal or North Carolina law that requires any used vehicle seller—dealer or individual—to:

  • provide any warranty on a vehicle being offered for sale
  • perform any mechanical or structural inspection of a vehicle prior to sale
  • allow any cancellation a/k/a “cooling off” period upon sale of a vehicle

And please be advised that the North Carolina lemon law statute only applies to brand new vehicles.  In other words, THERE IS NO LEMON LAW PROTECTION FOR USED VEHICLES OFFERED FOR SALE OR PURCHASED IN NORTH CAROLINA.  When used vehicles are involved the law is a hodge-podge of various statutes and principles of contract law.

Given these things it truly behooves the buyer to run either a CarFax or Autocheck report on the vehicle to learn about its history.  Also the buyer should have the vehicle checked out by a mechanic before agreeing to purchase.  Preferably the mechanic inspecting the vehicle should be one hired by the buyer and not the seller.  The buyer should have the mechanic provide a written inspection report noting any problems or material defects with the vehicle.  Buyer should then share the report with the seller and seek to negotiate the purchase price, a possible warranty or agreement to repair, or—depending on the seller’s willingness to respond—possibly opt not to purchase the vehicle.

Unless the seller is someone the buyer knows the buyer may be well advised to ask to see a driver’s license or photo identification card from the seller to verify the seller’s identity. The seller’s name on these documents should match the seller’s name on the vehicle’s Certificate of Title as well as the name to be placed on the purchase documents signed by the parties.

Once a decision to buy is made the buyer should insist on having a Bill of Sale which clearly states the following information:

  • full name(s) and address(es) of the buyer(s) and seller(s);
  • year, make, model, color, and vehicle identification number (VIN) for the vehicle
  • purchase price of the vehicle
  • whether the seller is providing any warranty and, if so, a complete statement of the mileage and duration (time) of the vehicle as well as the components covered plus the portion of any repairs to be paid by the seller
  • any other important terms of the deal (ex:  seller agreement to perform or pay for certain repairs/modifications at or before the time the vehicle is delivered to the buyer, seller promises regarding the vehicle’s condition or features)

If the buyer is making payments to the seller for the vehicle there should be a finance contract signed by buyer and seller which states the amount and frequency (weekly, bi-weekly, monthly, etc.) of payments, due dates for payments, name and address to whom the payments should be made.  The finance contract should also state if any of the following are being assessed:  interest/finance charges, late fees, and repossession fees.  And if the seller wants to retain the right to repossess the vehicle for a breach of contract by the buyer there should be a repossession agreement a/k/a security agreement, signed by both parties, which states the right of repossession and the terms and conditions under which this right may be utilized.

Another key note is that the buyer should NEVER pay any money to the seller until the buyer has seen (and preferably been given) the original Certificate of Title.  This is to ensure the seller of the vehicle is the actual owner of the vehicle and it also allows the buyer to see if the Certificate of Title states the vehicle is a flood, salvage, total loss, or remanufactured vehicle.  Additionally the buyer can determine if there are any liens listed on the Certificate of Title and also verify that the Certificate of Title being provided by the seller is for the same vehicle being sold by the seller.

For additional information on purchasing a used vehicle from an individual click here.  And even if you are not in the market for a used vehicle please pass this post along to your family, friends, and social networks.  Happy but heady buying….


John T. O’Neal is a practicing attorney in Greensboro, NC who focuses his practice in Personal Injury/Wrongful Death, Consumer Law (includes Auto Dealer Fraud/Vehicle Issues, Lemon Law, and Debt Collection Defense), and various types of Civil Litigation. A long-time NCAJ member and a two-time Ebbie Award winner, he is a former Chair of the Consumer Areas of Practice Section and the Hispanic/Latino Issues Division.