Talking to a 3rd party about buying there used car?

I'm smelling a huge rat in this deal the seller is offering. Whatever this seller has in mind, it's not good.

But no, you don't need to carry 'full' coverage (Collision & Comprehensive) on a vehicle just because you're making payments on it. You only need to carry that coverage if a) the vehicle is used as security on the loan and b) the requirement to carry full coverage is a written condition of the finance agreement.

If this guy is not willing to sign a detailed finance agreement, don't borrow anything from him at all. Get the money from somewhere (anywhere) else. Never trust anyone who tells you they know a shortcut.

Who will have the title to this car while you are paying? How well do you know this guy?

What happens when you wreck the car and don't have full insurance? Are you going to finish paying on the wrecked car that can't be driven?

Lots of potential risks hear just to save a few dollars.

If the seller will "sell" you the car for one dollar----that is sign over the title to you so you can insure it and register it etc than by all means go for it. You would have a handshake agreement on the side to pay the seller off in some amount of time. You have no risk in that case. The seller will carry the risk of you wrecking the car or it breaks down etc and you stop paying the seller.

NEVER a good idea.

Keep these things in mind:

1) The whole time you're paying it off, he has to keep it under his name. You cannot transfer ownership or register the vehicle until the car is paid in full to him. This puts you at risk... if you're late on a payment, he can come take the car. Then, you're out the $$$ you paid to him, and have nothing in return on this deal (rightfully so).

2) Regarding insurance, HE has to keep insurance on the vehicle under HIS name as long as it's registered to him.

No seller is crazy enough to take that risk.

You ought to think this one thru. Many potential dangers with this approach.