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How to Buy a Good Car on Craigslist

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Nathan is happy and satisfied with his car purchases on Craigslist.

Friends often ask me how to buy a good car on Craigslist. This is the comprehensive guide to saving thousands on your next used car purchase. Dollar-for-dollar, Craigslist is the best way to buy a used car, hands down.

Rather than paying a profit for the middle-man (dealership), buyers and sellers can transfer ownership in the most efficient way possible.

My wife and I recently paid $7,250 for a gently used 2005 Toyota Prius with 107,000 miles on it (and a new HV battery). Similar cars sold for $8,500–$10,000 at dealerships.

The 2005 Toyota Prius we just purchased off of a local Craigslist private seller.

The 2005 Toyota Prius we just purchased off of a local Craigslist private seller.

Despite the obvious benefits, most buyers avoid Craigslist because they perceive it as being too risky or requiring too much additional effort.

That couldn't be further from the truth.

Taking a few basic precautions and doing your homework can virtually eliminate your chances of getting scammed or driving away with a sketchy vehicle. It does take some extra work, but it's an easy way to put significant money back in your pocket and have a little fun along the way.

Here's an outline for how you can cut out the dealership and save thousands on your next car purchase.

1. Decide What Car You Want

Hundreds of cars are posted on Craigslist every day. The last thing you want to do is sift through every one of them. You first should decide exactly what make, model and year(s) range of the vehicles you would be interested in.

Consider your current needs (seating room, storage space, towing capacity, etc.) and how they may change over the lifetime of your next vehicle. That 8-passenger SUV may be necessary now but might be overkill in the next few years if your kids are going off to college.

Never underestimate the compounding costs of gas into the equation. The difference between a 25 mpg and 35 mpg vehicle over the next 50,000 miles is $2,000.

Be sure to check mechanical and reliability data. Both Consumer Reports and Phil Edmonston’s Lemon-Aid Car Guide are great resources for predicting repair costs and overall reliability.

2. Does It Make Financial Sense?

Why are you replacing your current vehicle? Maybe your old car has broken down? Or you just want to avoid inevitable repairs that come along with aging vehicles?

If it's for any reason other than a first-time car purchase or having to replace a totaled vehicle, I would highly recommend doing the math first. You may find that fixing your old car would be better in the long term.

To stretch your dollar a little farther, consider buying an older model and stripping out all of the unnecessary features (which are pretty much all of them). Every year older you get, you'll generally save 10%. Getting a "stripped down" '05 Prius saved us $1,000, and we won't miss any of the extra fancy features. It's got an engine, A/C and a radio. What more could you want?

The spreadsheet I used to help determine the most financially sound vehicle.

The spreadsheet I used to help determine the most financially sound vehicle.

3. Get Your Funding Together

By now, you should know roughly what you are going to be paying for your car. If you don't have enough cash to buy the car straight up (and leave a little in the bank)—consider holding off until you do. There are not many worse financial moves than paying interest on a depreciating item.

If you absolutely must borrow, get the loan secured and funding in place before you start shopping. The best deals on Craigslist aren't there for very long. Don't even bother looking until you've secured the appropriate funding.

4. Search Smart

Now is the fun part: finding the car you want! If you have a tablet or smartphone, I would highly recommend downloading a Craigslist aggregator app such as Craigslist+. These apps let you search multiple Craigslist locations for what you're looking for.

I use this app (Craigslist+) to search multiple Craigslist locations for the best used car deal.

I use this app (Craigslist+) to search multiple Craigslist locations for the best used car deal.

I used the Craigslist+ app to set up searches for 2004–2006 Toyota Prius models within 200 miles of me. It might set you back a couple of bucks, but you'll save a lot of time searching for your new car and get a leg up on the competition.

Finding the right car will likely take you some time. The most important thing you can do is to be patient. If it's not exactly what you are looking for, move on. My wife and I contacted many owners and searched for nearly two months before we found the right car.

5. Contact the Owner With Preliminary Questions

So now you found the perfect car. It has everything you wanted and then some. Low miles, perfect color, great condition... everything!

Not so fast, tiger.

Before you look at the car, you need to try to find a reason not to look at it. That's right. You don't want to waste a bunch of time and gas money physically looking at every car that looks good. Ask the dealer questions that will make or break whether you even want to go look at the car.

Come up with a list of questions that you want to be answered before you'd even consider a car. Here are some starters:

  • Why are you selling it?
  • How would you describe its condition (both interior and exterior)?
  • Does the car have a clean title (i.e., not rebuilt)?
  • Where did you buy the car from?
  • Do you mind if I get it independently inspected?
  • What types of extra features does it have?
  • Do you have the CARFAX history report available?

6. Pre-negotiate

If the car makes it through your rigorous questions, it's probably a legitimate contender for your next car.

Now you need to do some pre-negotiation. Go back to Edmunds TMV and KBB and insert all of the features and your assumed vehicle condition. I would recommend taking the average of both resources less any outstanding repairs or maintenance requirements to get the car running smoothly (if necessary).

Once you determine a fair value, I would text/call/e-mail the seller and say something like, "I'm very interested in the car. From what you've told me, it sounds like the car is in ___ condition. The fair value according to Edmunds and KBB is around $____. At that price, I would consider coming to look at the car."

The purpose of your pre-negotiation is not to get an unreasonably good deal for yourself (called "low balling") or lock the sale in at a certain price. The only purpose of this is to make sure the seller is willing to deal fairly.

If the seller is unwilling to negotiate down to a fair price or give a good reason why they won't, move on.

7. Go See the Car

If you're happy with what you've heard so far and the seller is willing to sell it at fair KBB or Edmunds value, set up a time to go visit the car in person.

Approach the meeting like you plan to buy the car that day. If it's a good car, it won't last much longer than a few days on Craigslist. You'll want to give yourself the chance to pull the trigger rather than delaying a few days and letting someone else snatch it.

You should bring everything you need to complete the transaction, including bill of sale (if your state requires it), license, and insurance card.

You'll also want to bring enough funding to pay for it. I prefer to bring a cashier's check at the absolute bottom dollar amount that would likely end up paying for the car and then the rest in cash. For example, if you think you'll make the sale at $8,000, bring a check for $7,500 + $500 in cash.


That gives you the most flexibility to negotiate the price down without a) trapping yourself to pay whatever price is on the cashier's check or b) walking around with thousands in cash.

Also, arm yourself with negotiation materials. The more data you can bring to support your negotiation point, the better chance you have of paying a fair price. At the very least, you should bring a printout of KBB and Edmunds TMV value for several different conditions of the vehicle.

If you really want to rock their world, bring your laptop with an Excel spreadsheet showing the average condition price from both KBB and Edmunds along with any adjustments for upcoming repairs, worn-out tires, etc.

8. Thoroughly Investigate

Along with your negotiation documents, bring a list of things you want to check the car for (this is a good one) and a list of unanswered questions.

Ask for two test drives.

  1. The seller can drive while you sit in the passenger seat. Turn the radio off and listen for any strange noises. You'll be able to focus more on the car without being distracted by traffic.
  2. You should test drive it.

Look under the hood, under the bottom, open all the doors, look on the floors, look under the seats, play with the radio, check all the lights/turn signals, scour the paint for scratches, and look for stains in the carpet. Check it all out.

Ask questions about everything. If there is a big scratch, point it out and ask what happened. If you see any sign of fresh paint, ask if it was involved in an accident. The more you point out, the more ammo you will have when you go to negotiate later on.


9. Think It Over

If you're still interested at this point, it's time to get down to business. Even if you know for sure that you'd pay fair value, it's still a good idea to just take a few minutes to think it over one last time.

Ask the seller if he doesn't mind waiting while you go grab some food (or a drink or whatever). This will give you a chance to clear your mind and think more rationally. Call your spouse or close relative who knows something about cars to talk it over.

Consider everything you've seen on the car and establish your final negotiating position. If there were small issues that lower the value of the car, research how much they would be to replace and factor that into your final offer.

Keep in mind that you don't want to low-ball them or come to some low price just to get a better deal. The seller needs to see that you're coming at it honestly and fairly. If you can do that, they will respect the time and effort you went into making your offer. This leaves the seller with very little ground to argue against what you've done.

10. Negotiate the Final Price

After you have established what you think to be a fair price, it's time to go back and close the deal. Ask the seller if you can speak with them privately, away from kids or pets or whoever else may be there. Sit down and pull out all of your arsenal of negotiation documents.

  • Tell them what condition you feel the vehicle is in: Excellent, Very Good, Average, etc.
  • Let them know exactly why you feel that way: the paint is scratched up, there are stains in the carpet, the tires will need to be replaced soon, etc.
  • Show them the KBB and Edmunds estimated values for that condition and then adjust for any future repairs: the oil needs to be changed soon, the timing belt is getting old, brakes sound a little squeaky, etc.
  • Walk them through all of the calculations to arrive at what you believe to be a fair price.

If you can't come to a deal, don't be afraid to walk away. You're in control. Don't let the seller bully you into paying more than the car is worth. At the same time, don't be unwilling to pay what it IS worth, either. Remember, paying fair price upfront for a good car is always better than getting a good deal on a bad one.


11. Complete the Transaction

After you shake hands, don't get so excited to drive the new car home that you forget all the paperwork. Make sure the seller signs over the title to you and that you leave with the bill of sale and any other documents you need to get the car registered in your state.

Once you see they have a clean title and it has been signed over to you along with any other documents you need, give them the money and shake hands. Congratulations new car owner!

12. Don't Forget to Register!

You probably only have a certain number of days to get your car re-titled and registered in your state. Take it to the local DMV and get that taken care of ASAP.

There you have it! Following these steps will help ensure that you are getting an above-average car at a fair price. They are by no means the only way to do it, so be sure to check out other resources before developing your final game plan.

Do you have any experience buying used cars on Craigslist? If so, be sure to leave some helpful tips for readers in the comments below.

If anyone has any questions about my experience, feel free to ask in the comments below and I'll be happy to answer.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2013 Nathan