It may save a tidy sum compared to buying from a dealer, but there are some real risks attached to buying a used car privately. Perhaps the most important point is that, unlike bone fide dealers, private sales aren't covered by the Sale of Goods Act 1979. And that means that private sellers aren't obliged to ensure the quality of the car – responsibility for assessing this rests squarely with the purchaser.
Private sellers need only ensure that the car for sale is roadworthy and that they can prove ownership. Although many private sellers are honest, some, bluntly, are not.
This doesn't mean that purchasers have no defence, but the protections, frankly, aren't as strong as when buying from a licensed dealer. To obtain any kind of recompense, buyers will need to prove that the car failed to meet its description when bought or that the seller misrepresented it.
Things could get unpleasant. If, for example, a finance company is still owed money by the vehicle's former owner, there's a danger that the car could be repossessed. This tends only to happen where purchasers felt suspicious that all was not right at the time of sale but failed to question the agreement. Under these circumstances, the only course of action left open to the buyer is to sue the private seller – provided they can be found. More often, however, the purchaser who bought in good faith will be granted "good title" by the Consumer Credit Act of 1974 if a finance company subsequently makes a claim for the car.
One indispensable rule of thumb is to always, always, ask to see a vehicle's registration document before proceeding with a purchase. Check the details carefully – if they don't add up, the car could well be stolen, in which case there's only one safe bet: the seller will mysteriously disappear overnight.
Buyers beware: just because someone claims to be a private seller doesn't necessarily mean he really is one. A small but infuriating minority of unscrupulous dealers have been known to masquerade as private sellers in order to dispense with their legal obligations and/or "get shot of" dodgy or over-priced vehicles. This is a criminal offence and any purchaser who suspects that such a scam is underway should contact their local Trading Standards office immediately. A sign to look out for is an ad giving a mobile number only, along with a specific time to call.