Paying cash for second hand car by private seller

jinroh on 11/12/2012 - 18:05

Hi guys, just need some general info here.

We all know that when buying cars from dealer and paying cash, generally we have some bargaining power to ask them for the best price. But what about when buying a car from private seller?

Does those prices people advertised in carsales, etc are mostly based on the assumption that the buyer pays cash, or generally there's some room for negotiations to lower the price for those who can come up with all the money?

Also, what are the option for finance when buying second hand car through private seller? I thought I can do some googling around this topic later, but might as well raise the question here too.

Would like to hear some thoughts. Cheers.

General Discussion

Comments

  • lisss on 11/12/2012 - 18:52

    As a seller I would only accept cash or a bank cheque, but would prefer cash. My partner sold his car recently and had 5 prospective buyers haggling over it, all offered to pay cash.

  • sparkles on 11/12/2012 - 19:51

    Whenever I have bought a second hand car privately I have always paid via bank cheque. I've found finance is probably easiest via personal loan for privately bought cars.

    I would always assume that the price listed would be open to negotiation, for example if you want $4K, advertise for $5K?

    Also, check that there is clear title on the car. Getting a RACV check on the car is always good for peace of mind. Most sellers would be fine with it, unless they are selling you a lemon.

  • trebora on 11/12/2012 - 20:32
    +1

    Depending on the car, Generally you can often reduce the price significantly with a private seller because there is an over supply of used cars and many sellers simply get sick of dealing with all the time wasters. So if you make an offer 20% below the advertised price, often the seller will say YES so he/she can get on with their life.

  • WT on 11/12/2012 - 20:55
    +1

    If its a 40k car, bank cheque.

    Pretty stupid to walk around with that sort of cash

  • aerona on 11/12/2012 - 21:49

    Remember if a offer sounds to good, do a history check for like $8, you should pretty much checking the history in either case anyways.

  • _Bruce_ on 11/12/2012 - 22:51

    As others have mentioned cash/cheque is the only option. The price for a private sale should always be less than an equivalent car at a dealer. The dealer is required by law to have some degree of warranty and is generally more secure for the buyer.

    • dealman on 12/12/2012 - 17:09
      +2

      The dealer is required by law to have some degree of warranty

      True..

      and is generally more secure for the buyer.

      not so sure about that, most used car dealers are just that "USED CAR SALESMEN" there is a reason why that name has a stigma.

      I find buying private from local sellers is more reliable. There are more honest private sellers than used car dealers.

  • Geewhizz on 12/12/2012 - 07:00
    +1

    Red Book and Revs are the first places you should be looking.

    • _Bruce_ on 12/12/2012 - 08:57

      Not sure about Revs, but note that Red Book can be quite out, particuarly if the specific model you are looking at is less popular. Good for a starting point though.

  • BuyoTheCat on 12/12/2012 - 09:02

    Always check that there is no finance owing on the vehicle. In Victoria, you can check on VicRoads.

    Finance where the vehicle is used as a collateral is not available from a private seller. You can take a personal loan to get one. This was what I found when I was trying to get my wheels about 4 years ago.

    • Ahan on 12/12/2012 - 10:27
      +1

      You can do a PPSR search as well.

    • dealman on 12/12/2012 - 17:12

      You can't do the Finance check on the vicroads site anymore

      have to buy a PPSR certificate every time.

  • jinroh on 12/12/2012 - 12:14

    Cheers for the replies.

    I'm thinking of upgrading my car sometime next year. So going to be both private seller and then buyer.

    Just want to know what to expect when in negotiation, ie. when selling, will I get some interested buyers who might put an offer, but haven't got their finance approved yet, so possible time-wasters.

    And lets say that's the case, when buying, I might be able to negotiate the price down if I can use all of my own cash and not requiring any finance.

    So my question really is how common are people using car loan when buying through private sale? Or is it only common when buying cars from the dealer?

    • _Bruce_ on 12/12/2012 - 12:47

      No idea how common it is, but it shouldn't affect the seller either way.

  • tsunamisurfer on 12/12/2012 - 12:21
    +1

    Absolute dummy question here…

    You are the seller, you strike a price with the buyer, he gives you a bank cheque for the agreed amount, its the weekend so banks are closed (WA).

    I'm guessing it is customary to take the bank cheque, bank it Monday and when the funds clear THEN the car changes hands?

      • _Bruce_ on 12/12/2012 - 12:50
        +2

        This isn't quite true. While bank cheque is not quite as safe as cash, the bank is offering the money, not the buyer. As long as it isn't a forgery/stolen/other badness (which cash is also exposed to) you will get your money.

        More details here:
        http://www.nab.com.au/wps/wcm/connect/nab/nab/home/Personal_…

        • _Bruce_ on 12/12/2012 - 13:14

          Did you read my link? It answers you question.

          As long as the stamp/signature of the bank is legit, you will get your money*.

          • OK there are a few other fine print loop holes, but it pretty much boils down to this.

          Edit: To clarify, purchaser pays bank, bank issues cheque. Purchaser cannot cancel cheque, only the bank can.

  • hello007 on 12/12/2012 - 12:54
    +1

    Never touch a second hand car without:

    • Normal full visual checks and other checks recommended by Fair Trading.

    then

    • Test drive - and only if if passes

    then

    • Radiator pressure test - for free at places like Natrad and others - takes about five minutes.

    if there is any issue - give the keys back and say no thanks

    then

    • If it passes all the above -

    then

    • Get a full mechanical inspection

    then

    • Use all the above to crunch down the price.

    then REVS check.

    then

    • At this point you decide whether you want to buy.

    If any car fails a radiator pressure test — or cooling system checks - then its basically a mobile bomb waiting to explode and cost you big repair dollars.

    It's not the only issue that can affect a car — but its a FREE check - that's well worth doing and can save you a lot of engine heartache.

    Also - if the cooling system is full of pure water - or brown colour water — then dont even bother with step 1 … just give the keys back and walk away.

    If the seller will not do the radiator pressure test — then don't even view the car.

    Why is the above all so important?

    Australian cars have to survive extremes of heat and cold — and the engines and cooling systems are constantly expanding and contracting — eventually something gives — and when it does — the aluminium heads on the engines crack — and you are up for big $$$ to repair.

    So eliminate this as much as you can BEFORE you buy.

    • morpheu on 13/12/2012 - 18:34

      i would add 1 more quick check while you are looking at the engine, remove and look under oil filler cap, if oil is milky/frothy WALK, no wait, RUN AWAY! milky oil is a sign of blown head gasket, a 5 second check will literally save you thousands! yes i know any mechanic worth his salt will check this but it can save you time

  • tonka on 12/12/2012 - 13:44
    -2

    Cash is not the leverage point for a private seller. It's the quick sale that is the attraction.
    If a seller had a car for sale for $10K and 2 buyers. One buyer offers $9K to close the deal right then, a second buyer offers $10K to come back the next day, it is possible the seller will take the $9K immediate offer.

    • ferguscan on 13/12/2012 - 11:54
      +1

      How are you going to close the deal right then without cash?

      • tonka on 13/12/2012 - 14:07
        -1

        Yeah you couldn't so why would you ask such a dumb question?

  • Almost Banned on 12/12/2012 - 13:47

    I cannot emphasise the importance of doing a PPSR check enough.
    Doing it through the government website is pretty cheap considering. You will need the VIN from memory.
    We were looking at buying a car until we did a search. We discovered from the search that it had been an insurance write-off. Now, maybe it was repaired perfectly - but there was no way we were going to touch it.
    You do not want to buy a car that has a registered encumbrance either - and it has happened.
    As far as negotiation - private sellers always expect a bit of a haggle don't they?

    • _Bruce_ on 12/12/2012 - 14:14

      Just to further the write-off part, this may be cause the car has been stolen and ID swapped with a wreck, so stay well away.

  • hello007 on 12/12/2012 - 13:55

    A radiator pressure test is like the "Canary in the coal mine" (ie the first sign of something wrong) when it
    comes to buying a second hand car.

    If the canary is failing, dead, or sick - don't go in the coal mine.

    If the radiator pressure test fails - then don't buy the car.

    Most car dealers don't do this because its not in their interests to alert potential customers to hidden problems with a car.

  • diddy50 on 12/12/2012 - 15:33

    I would pay about 20% lower than asking price for private sale

  • diddy50 on 12/12/2012 - 15:34
    -2

    Always try to avoid getting a loan on cars, especially 2nd hand cars, cause really you are getting a liability for a liability, if you get what I mean…

  • leeroys_dad on 12/12/2012 - 16:35
    +1

    dunno if it's been stated, but bank cheques can be cancelled 3 days after the seller has banked the cheque. i will always deal in cash. NEVER bank cheque until they fix this flaw

    • _Bruce_ on 12/12/2012 - 16:39
      -1

      Where are you getting this from? Are you confusing bank cheques and personal cheques? I think you are mistaken.

  • crudman on 12/12/2012 - 18:34

    So much misinformation posted above.

    1. CASH
      When going through a private sale the concept of "If you pay in cash I'll knock off $1000" is not existent.

    For all intensive purposes, as a private seller you are not providing a loan facility. While the purchaser might get a loan, that's between him and his bank. So all transactions are effectively CASH despite the fact that it may be in the form of a bank check , Direct Bank Transfer, actual cash.

    As such you don't need to do financial checks on the person as you are not providing a loan.

    Note: bank checks(aka cheques) are NOT personal checks. Bank checks are guaranteed by the bank. Personal checks are not.

    1. NEGOTIATING
      You could read books on this so all I'll say is that you can't use the 'cash' thing as part of your strategy as it is effectively ALWAYS cash transactions when done privately.
    • ferguscan on 13/12/2012 - 11:53
      +1

      This is plain wrong. Having cash with you is a powerful enticement no matter the type of seller. Car is advertised for 10k? Here, I have 90 $100 bills in my hand. Smell them as I wave them under your nose. They could be yours right now if you hand over the keys.

      • Flying Ace on 14/12/2012 - 09:10

        Yep - managed to get my first car for about $1000 less than the asking price by waving a bit of green under the lady's nose :-)

  • woz on 13/12/2012 - 18:26

    This might seem petty compared to some of the other good points above, but don't forget to turn the radio on. Purchased a car two years ago by private sale. Quietly drove it four hours home, never realising that the stereo required a code. Seller didn't have code, so stereo is dead as a dodo. Annoying.

  • Ryk on 13/12/2012 - 19:44
    -2

    CASH.
    A Bank Cheque is no longer worth the paper it's printed on, they can be stolen, counterfeit, cancelled…

  • The Gent on 13/12/2012 - 20:52

    My rule of thumb - if the price is something like $7,500, they will accept that they are probably going to be getting $7,000 for it.

    Haggle like a mofo and point out every flaw it has "Oh, I'll have to get new tires put on in the next 6 months, The CD player's broken, the cost of repairs would mean I'm paying more than I would want to, it has a bit of rust here, you said it was the 2009 model and it's actually the 2007, there's a bit of sun damage to the paint, there's paint scratches etc etc etc.

    I mean, try not to be a d**k about it - be as subtle as you can and they will probably do the work for you trying to convince you it's a good car and close a sale - human nature.

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