Buying a used car directly from the owner presents great potential for savings because the seller may not know the market or may be in a hurry to sell. But as with any used product, there's a chance of getting burned as well. To limit the risk, get a Carfax report on a potential buy to determine if the car has a lien or salvage title, or if the odometer has been rolled back. Major accidents and some service information is often included in the report. Carfax, which acquires information from insurance companies and other sources, is widely used, but buyers should beware that there is no single source of information about used cars that is guaranteed to be complete.
If you're shopping for a used car online, Craigslist and Ebay are two of the largest marketplaces. The auction bidding system on Ebay eliminates direct negotiations, but you need to be careful about getting swept away and overbidding. For ease of mind, Ebay offers purchase protection on eligible vehicles sold in its marketplace, which protects you if you pay for a vehicle that's never delivered and from some other potential losses. Craigslist doesn't offer any guarantees, although we did find a helpful guide to buying a vehicle through the site. Negotiations are common for Craigslist sales, providing more room for potential savings.