Keeping It In The Family

By Teresa Iqbal

April 3, 2017 4 min read

The process of purchasing a vehicle can prove to be a tricky transaction for many. Because it's such a large investment and buyers want to be certain of a car's history and condition, many people end up purchasing vehicles from family members rather than strangers or dealerships. While there are many advantages to purchasing from someone you know (such as peace of mind), it's important to exercise caution and lay down ground rules right from the start in order to avoid any potential issues that can affect your pocketbook or perhaps even your relationship.

*Choose Wisely

Though you love all your family members, only consider purchasing a vehicle from those whom you know to be reliable. Become well-informed. Take all the same steps that you would when purchasing a vehicle from a stranger. Don't be afraid to thoroughly question your relative to gain a deeper understanding of the condition and history of the vehicle. Ask to see any vehicle logs or mechanical paperwork that he or she might have for the car, and request that the vehicle be taken to a mechanic for a complete inspection. This part of the negotiation process is vital to both parties' feeling content after the deal has been made. You wouldn't want to drive away with a vehicle you believe is in sound mechanical condition only to find that the transmission needs replacing just a week later. And your relative doesn't want to sell you a lemon.

One additional advantage to purchasing a vehicle from a family member is that you might have the opportunity to become more acquainted with the vehicle by asking if you can take it for a few lengthy test drives. This can be a great benefit and help you to ensure that you're purchasing the right car -- something that you typically don't have as much time for when purchasing from a private seller or dealership.


When it comes to the transaction between family members, there are a number of less-formal methods of payment. Close family members, such as parents or siblings, may choose to agree to a payment system that would allow the buyer to make payments over a period of time. If this is the financing method that is determined, it's vital to lay down some ground rules from the start. This may feel unnecessary or even offensive to close family members, but the clarity and security that comes with a contract can eliminate much strife down the line. Of course, a vehicle that is purchased outright should also have a formal element to it. Do you want a grace period to receive your money back if you decide after a few days that the car is perhaps not the right one for you? Having a mutual understanding of the transaction is important, and putting it on paper never hurts.

*Hash Out the Small Details

There are several components to such a high-value transaction. Keep a checklist of the various details to address before settling the purchase. For example, choosing when and how the car's title will be transferred to you can be complicated, depending on the method of payment. If you're paying a family member in installments, they may not feel comfortable formally transferring ownership of the car until the vehicle has been paid off. If the car is purchased outright then it would be expected for the seller to transfer the car into your name immediately.

Once it's time to transfer the title from the seller's name to yours, remember that several states have different requirements and processes regarding registration. For example, in California, you might be required to submit a smog certificate and pay a transferal fee. Make sure to contact your local DMV to learn the requirements in your state.

Like it? Share it!

  • 0