Buying a Car "As Is"

There are several conditions a car can come in when you purchase it. The most well-known are “new" and “used," but there's a third description that may show up on a car's price tag: “as is".

What Does “As Is" Mean?

“As is" is a legal term describing the status of an item for sale. It means the item is being sold complete with all issues known and unknown. Essentially, the term frees the seller from legal recourse should an unexpected problem arise with the item after the sale.

In the case of a car being sold “as is," the term refers to a vehicle's warranty status. A car being sold “as is" is being sold without a warranty. That means that any problem with the car is no longer the responsibility of the dealer or private seller once it has been sold. All repair costs will come directly out of pocket for the buyer.

Buying an “As Is" Car from a Dealer

Since an “as is" purchase is a risk for the car buyer, there are typically several conditions determining when a dealer can sell a car with no warranty. The car must:

  • Be sold under a certain price.
  • Be over a certain age.
    • Meet all requirements for safe and legal operation at the time of the sale.
    • Have ownership transfer documents that clearly state the car is unsafe to operate.

A dealer is also typically legally obliged to inform a customer of a car's warranty status.

These laws vary by state. Check out our guide to lemon laws to see your state's regulations.

Buying “As Is" from a Private Seller

A majority of “as is" sales are from private sellers. Unless your purchase agreement states otherwise, a private sale is on an “as is" basis.

Private sales are much less regulated than sales at a dealer. Many states don't require a private seller to ensure the car will pass state inspection before selling it.

You may also have limited legal recourse regarding:

  • An inaccurate odometer reading.
  • Misinformation regarding the number of owners on the title.
  • A seller not disclosing the car's true accident history.
  • If the car was stolen and retitled.
  • If the car was declared salvage in another state.

To avoid many of the above scenarios, consider running a VIN check on the car to obtain a vehicle history report. This should disclose any ugly situations that the seller did not.

Preparing for an “As Is" Sale

It's very important before making an “as is" purchase to do your research. Check the Internet for information on vehicles as similar as possible to the one you're interested in.

  • What is a typical selling price for a car of this make and model with this number of miles?
  • What are typical problems for a car of this make and model with this number of miles?
  • How reliable are these cars?
  • How many of these cars are still on the road?

Since there is little to nothing guaranteed about the car's condition, this will help limit any surprises or set the right expectation for the car.

Other good ways to prepare include:

  • Requesting the car's vehicle history.
    • Ask about both the car's accident history and maintenance records.
  • Get the car looked at by a mechanic before purchasing it.
  • If buying from a private seller, arrange to meet in a safe and public place.
  • Ensure the seller provides all proper paperwork for the purchase.
    • Car dealers will typically handle the paperwork for you.
    • When buying from a private seller, use our guide to paperwork to ensure you fulfill your state's requirements.

Create a Purchase Agreement

If you're conducting a transaction with a private seller, you can ask about writing a purchase agreement. This agreement should clearly state:

  • The responsibilities of both the buyer and seller—and what each is NOT responsible for.
  • Full names and addresses of both buyer and seller.
  • Full description of the vehicle.
  • Buyer's acknowledgement of the car's “as is" status.
  • Signatures of all parties involved.

While this is not an official document, it could help clarify understanding between the two parties and could possibly be potentially useful should any legal issues occur.

Pros & Cons of an “As-Is" Purchase

Advantages of an “As Is" Purchase

The biggest advantage is price. In many cases, dealers are legally obliged to sell an “as is" car under a certain price.

Private sellers are also often eager to sell the car, possibly for reasons other than the car's condition. This typically makes them much more willing to negotiate.

Disadvantages of an “As Is" Purchase

As the saying goes, caveat emptor, or “Let the buyer beware." While buying an “as is" car can save money in purchase price, buying an “as is" car can just as easily end up costing much more than anticipated in maintenance costs.

Ensure you do your research and get the car inspected by a mechanic prior to the purchase to limit the chance of buying a car in poor condition that will require major work to keep running.

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