Pricing and availability in the auto market have been in flux over the past few years. While the industry has moved past computer chip shortages and shipping delays, the domino effects remain in the form of a tight used car market. Traditionally, since private sellers tend to be highly motivated and don’t offer additional products like warranties, used cars from private sellers tend to be cheaper than ones from a dealership. With Facebook being one of the world’s most popular social media platforms, the integration of Facebook Marketplace easily and conveniently connects buyers and sellers. If you’re buying a car off Marketplace, here’s what you need to know.
Bankrate Insight
- Shop smart by reviewing the seller’s profile before engaging and checking the vehicle’s history.
- Watch out for scams, be wary of deals that seem too good to be true, meet in well-lit public places and consider taking someone with you to complete the transaction.
- Immediately update insurance and title paperwork after buying or selling a vehicle to avoid fines, penalties, and possible suspension.
Buying a vehicle on Facebook Marketplace
While you cannot actually purchase a car on Facebook Marketplace, you can search for one and make a connection with a seller to buy a car. How this works depends on the seller and whether the car has an existing loan that must be paid off for the seller to transfer the title to you as the new owner.
What is Facebook Marketplace?
Facebook Marketplace is a digital marketplace that allows Facebook users to buy and sell various products, including cars. The Facebook platform lets users view vehicles available in their neighborhood and private listings throughout the country. It was launched in 2016 as a competitor to Craigslist. Initially open to dealerships and private sellers, as of 2023, Facebook changed its guidelines and no longer allows authorized dealerships to list vehicles on the Facebook business page.
Shopping smart
Facebook Marketplace’s rules are simple when selling a car: make sure the description and photos match and follow community standards. Even with these rules in place, buyers need to be aware of the pitfalls of shopping for a used car online. Review the seller’s profile or business page to check for warning signs like few friends or a newer profile. If you plan to buy a vehicle from out-of-state, make sure to schedule an appointment with a mechanic nearby. Also, have a return-trip backup plan in mind in case the deal falls through, and you can’t drive the car back home.
It is also important to know that pre-existing damage is not covered by auto insurance. Pre-existing damage could be minor, like scratches and dents, but it could also be serious and signal a past accident about which the seller may not be forthcoming. It might be worth getting the VIN from the seller to purchase a CarFax or other VIN-based history report to verify if the car has been in an accident before you meet in person to buy the car.
Watch out for scams
With used cars being in short supply, scammers are out there trying to make a quick buck. If a deal for a car seems too good to be true, it probably is. Listing used cars for low prices almost guarantees a lot of views on the ad, increasing the likelihood someone may fall for it.
To avoid car buying scams on Facebook Marketplace:
- Never buy gift cards to purchase a car
- Ask for the VIN to verify the car matches the pictures and description on the ad
- Verify that the information matches if its a dealership ad
- Never send money upfront without seeing the car in person
- Have the vehicle inspected by a mechanic that you trust, not one that the seller recommends.
Stay safe
Even with a great deal, buying a car can be expensive. Purchasing a car from an unknown person may pose a safety risk, especially when meeting face-to-face to complete the transaction and exchange money. Facebook Marketplace does not offer purchase protection on vehicles, so it is important to be diligent as a buyer and seller:
- Take a friend or family member with you
- Meet in a well-lit public area, preferably with other people around. You may even want to consider meeting at a police station
- Verify the VIN, description and photos match the car
- Consider completing the monetary transaction at the DMV or a bank
- Ensure all documentation (title, lien release, bill of sale, etc.) are correct before handing over money
Even when taking precautions, there is a risk associated with buying a car from a private seller instead of a dealership. And sometimes, it can take years for a buyer to find out a seller was dishonest.
I bought my car. Now what?
Now that you’ve purchased the vehicle, there are a few more steps to take to finalize ownership and make your car street-legal:
1. Report the sale to your insurance company
It’s always a good idea to get a quote from your insurance company before finalizing a vehicle purchase. By doing so, you have the opportunity to compare rates and coverage types to find the best deal. If your carrier has a mobile app, you can usually finalize the quote and add the car to your policy before driving home.
2. Update the title at the DMV
The process of transferring the title of the car from the previous owner to you may vary by state, but you will have to go to the DMV to complete the transaction. You may be required to provide:
- A bill of sale
- VIN and odometer verification form
- Title with owner transfer and signatures from the buyer and seller
- A lien release
- Fees for transferring title and ownership
3. Comply with state inspections
Depending on your state and policy coverage, you may need to complete an emissions inspection, which is sometimes referred to as a smog check or a photo inspection. While photo inspections are typically free, smog checks may cost between $20-$30 and are available at most mechanic shops. Keep in mind that if your vehicle fails an emission inspection, you might not be able to register it until some repairs are made.
4. Secure an insurance policy
Securing car insurance and changing the title of the vehicle is a vital step in purchasing a used car, especially from a private seller. Dealerships usually handle this part of the paperwork on your behalf, but in a private sales situation, it’s up to you.
If you do not do this, the seller may be held liable for your actions as the purchaser. If you sold a car in the process, you should remove the sold vehicle from the policy. Some states require the tags to be turned in before removal, while others do not. Failure to do this in a timely fashion could result in fines, penalties and a license and registration suspension.
Before you start driving the car, you should purchase a car insurance policy for it. The rate you pay for car insurance depends on several rating factors, including the type of vehicle you own and your driving record, among many others. Your rate may be higher or lower than the average cost of car insurance, which is $2,634 per year for full coverage as of January 2025.
5. Document pre-existing damage
If there is pre-existing damage to the car, it is important to document and submit the damage to your insurance company. This way, you have the best chance of future claims being covered. Your insurance company will not cover any pre-existing damage.
The bottom line
Facebook Marketplace could be a great place to find a deal on a used car or sell one to make a profit. Sellers should be honest about pre-existing damage, make sure photos and descriptions match and offer a fair price. Buyers should be aware of scams, consider a VIN report to verify the car’s history and take steps to stay safe during the transaction. Verify your state’s DMV and insurance requirements before selling or purchasing a new or used car to avoid potential fines, penalties or a license and vehicle suspension.
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