Should I Buy a Vehicle From My Friend?

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Even with poor credit.

By

Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


, Contributing Writer - March 23, 2021

Friend prices can be very appealing, and it could mean saving some cash when you need to buy a car. However, tread lightly when entering a transaction with a friend.

Private Party Car Purchase Tips

When you buy a vehicle from an individual, it’s called a private-party transaction or sale. It’s very common for car owners to list their own used vehicles in magazines or online market spaces. And, if you have a friend with a car they want to sell, you may be able to get a good deal.

Negotiations on a friend’s car may be less intimidating than if you were at a dealership. Dealers are experienced in the art of negotiation, and they’re around vehicles all day! If you’re an average joe that just wants a reliable set of wheels without the hassle of haggling with a dealer, then buying your friend’s car could work out great for the both of you.

However, entering a large transaction with a friend can get dicey if you’re not careful.

Tips Before Buying Your Friend’s Car

Here are some things to keep in mind before buying your friend’s vehicle:

  • Sold as is – Most often, when you buy a car from a private party, it’s sold as is. This means if something goes wrong with it, it’s up to you to deal with it. Brand new cars are protected under a manufacturer’s warranty for a limited time, but once that’s over, repairs are up to you. If you purchase a used vehicle from a friend, it may be worth it to get it inspected or consider purchasing a third-party extended warranty.
  • Relationships are complicated – Doing any large transaction with a friend or family member can sour a relationship quickly if something goes wrong. A problem can easily become personal and ruin a good thing. Be clear with your friend about your expectations of the transaction, and never move forward with a car sale unless you’re positive it’s the right move.
  • Seriously consider an inspection – We’ve mentioned this already, but it’s worth saying twice. Whenever you buy a used car from anyone, including your friend, we recommend taking it to a licensed mechanic to have it looked at. Even if your friend is an auto mechanic, the vehicle may have underlying issues – which can become your issues if you buy it.
  • Do the paperwork correctly – Buying a car from a private party means doing all the transaction paperwork yourselves. This means drafting a bill of sale, signing the title, and going to the Department of Motor Vehicles or Secretary of State to finalize it. If something is done incorrectly, it could mean the sale is void. Another word of caution: make sure the title of the vehicle is in your friend’s name before you both sign it. If it’s not and your friend sells you a car that's not in their name, it’s called title jumping and it’s illegal in every state.
  • Financing or paying cash – If you need to finance your friend’s car, then you need to get a direct auto loan from a credit union, bank, or other institution that offers direct loans. A lot of the time, this means having a decent credit score. Typically, auto lenders prefer financing vehicles in good condition with clean titles, so if your friend’s car is worse for wear, the loan may not get approved. We recommend doing some rate shopping and lender research before you tell your friend the transaction is a go.

Buying a Car From a Dealership Instead

Not everyone has the cash on hand to buy a vehicle outright. But for borrowers with poor credit, financing can be a tough hurdle to overcome.

While buying your friend’s car can mean a good deal due to friend prices, if you have less than perfect credit, getting a direct loan for it can be tough. Special finance dealerships are signed up with subprime lenders. If you’re struggling to get an auto loan approval from a direct lender due to a lower credit score, then a subprime car loan could be your answer.

These lenders work specifically with credit challenges. If you have the income, stability, and a down payment prepared, qualifying for a subprime car loan could be possible. Finding a special finance dealership can be yet another hurdle to overcome – but we want to help.

At CarsDirect, we’ve been connecting borrowers to dealers with bad credit lending options for over 20 years. To get on the road to your next auto loan, complete our free car loan request form. We’ll get right to work looking for a dealership with special financing in your local area.

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, Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


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