Understanding Private Party Sales
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What are Private Party Sales?
If you’ve ever bought something from Craigslist, Facebook Marketplace, or your buddy Greg next door, you’ve participated in a private party sale. In fact, any transaction that doesn’t involve a retailer or manufacturer are considered private party sales.
Since these transactions take place outside of a more traditional marketplace, the parties involved may have to put in the extra work that a dealership or vendor would normally do. That includes any legal paperwork – like transferring vehicle titles – must be handled by both parties.
While doing that extra work may not sound appealing, there are a lot of benefits to private party sales over trade-ins or retail sales for both the consumer and the seller. It’s convenient, cheaper/more profitable, and gives both parties more control over the transaction.
Disclaimer: The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or business. It is only intended to provide education.
What do I need for a Private Party Sale?
As mentioned above, large private party sales often come with their own legal requirements and paperwork that varies with each state and type of equipment being sold. As such, you should always verify that you can cover any legal requirements before agreeing to a private party sale.
With that said, there are some elements that are highly recommended for any private party sale regardless of legal requirements: a pre-purchase inspection, equipment spec sheet, and a bill of sale.
While not always a legal requirement, it’s highly recommended that the buyer and seller agree on a pre-purchase inspection (PPI) for titled and non-titled vehicles by a qualified mechanic. PPIs function similarly to a regular car inspection; a neutral third-party mechanic or mechanics will inspect the equipment to look for any defective parts or systems and report their findings to both parties.
These inspections can be as thorough as the responsible party would like. For expensive or older equipment, a buyer may want to inspect the machine from top to bottom whereas a less risky purchase may only warrant a quick checkup.
Whether it’s extensive or short, a PPI is a great way to build trust between the seller and buyer and keep the transaction fair.
Rarely does used equipment have the same specs as it did when it first rolled off the lot. Years of wear and tear can lead to repairs and modifications that drastically affect performance. Because of this, equipment sellers should always provide an updated specs sheet that details both new and old specs so that the buyer knows exactly what they’re purchasing.
Bill of Sale
- Legal names and addresses of both parties
- The equipment’s make, model, registration number, and serial number
- The agreed price, including taxes
- Any equipment information included in the specs sheet
- Method of payment. If there are multiple payments involved, include the dates for each payment.
- Vehicle identification number (VIN)
- Original/previous owner’s legal name
- Date of sale
- A signature from the buyer, seller, and witness(es)
- Disclosures of any faults
- An as-is clause to ensure that both parties agree to the sale with the equipment in its current state
What are the Benefits of Financing Private Party Sales?
Equipment financing and private party sales go hand-in-hand. With equipment financing, sellers can make the equipment even more affordable while still getting paid 100% of the equipment’s value. Buyers get the advantage of a cheaper principle than at a dealership with the added benefit of affordable monthly payments.
Where can I sell Equipment?
When selling equipment on the private market, you have a lot of flexibility in where you sell your equipment. Today, online marketplaces such as Facebook’s marketplace and seller groups, Craigslist, and Ebay are some of the most common platforms for private party sellers. Others rely on more traditional avenues to advertise their equipment with signs at physical locations or through friends and acquaintances.
These days, it can be hard to stand out among the other hundreds of other sellers on large online marketplaces or reach enough potential buyers offline. That’s why we now offer financing on private party sales and our own mailing list for used equipment.
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