Today’s used car buyer has many more options when it comes to negotiating price and payment terms with a seller. This is especially true when it comes to paying for a used car in cash. Cash gives buyers the ability to own their used car free and clear right after purchase. It also saves the buyer hundreds or even thousands on the cost over the years.
Buying a used car with cash also comes with its own set of challenges, including issues with the bill of sale, title and vehicle registration. Luckily, it’s not difficult to get around these challenges.
Negotiate a price with the car dealership before declaring your intention to pay in cash. Dealerships make more money off a sale if it’s financed because of the interest involved. If you let them know right away of your intention to pay in cash, then they might increase the price to try and make up the loss of interest revenue.
However, it might work in your favor to let a private seller know of your intention to pay in cash because he won’t have to wait for his money. This might help you negotiate a lower price for the vehicle because the seller will receive his money right away.
Get the negotiated price and payment method in writing. Once you both agree on a final price and that you’re paying for it in cash, draw up a simple agreement that says both of these things, along with the date when the cash, vehicle and car title will exchange hands. Both you and the seller should sign this and have it notarized by a notary public.
The purpose of this agreement ensures that both parties understand the price and terms of the sale. A document like this can come in handy if the seller changes his mind before the sale is complete.
Purchase the car. On the day of sale, exchange money with the seller only after he signs a valid bill of sale. This bill of sale serves as your receipt and includes many of the same things as the price agreement does, including date of sale, purchase price, payment method and date.
The bill of sale can be a simple document you make on a computer word processing program. Or, you can use a template that can be found on your state's Department of Motor Vehicles website or through a simple Internet search. You’ll both sign the bill of sale and you must have it notarized by a notary public.
Also make sure the car title is signed over to you completely and accurately before leaving with the vehicle. You won’t be able to register your car in your state without a valid title. If that happens, you’ll have to get in touch with the seller to have it fixed and there’s always the possibility that you won’t be able to reach the seller.
