Used car buyers have a few options available when choosing where to look for a car. There are some significant differences between buying a car from a dealer vs. a private seller and we discuss some in detail below.
The avenues open to buyers when it comes to used cars are richer than they have ever been. From modern website and smartphone apps to more traditional routes like local advertising and spotting a sign on someone’s windshield in a parking lot: buyers can really have their cake and eat it.
A large number of buyers out there today continue to pursue one of two routes, either visiting a local dealership to find used models on offer, or by contacting and connecting with a private seller. Each path results in the same thing --- you getting your hands on a car you want --- but the respective differences in the process, as well as the advantages and disadvantages of each option are still very pronounced. In today’s piece, we are exploring the two routes and comparing their pros and cons to determine which one would best suit prospective car buyers.
We’ve all seen car dealerships. Most towns and cities have at least one, commonly located off of major thoroughfares in prominent and spacious locations. They need lots of room for the various cars they keep on site, as well as repair and other facilities that are located on site. A lot of us think of them only as places to get new cars, but they have quite a number of advantages when it comes to used cars, too.
One clear advantage the dealership represents is in the choice you get as a buyer. A private seller typically only has the one car to sell, so it makes the entire process rather less efficient if you’re having to shop around. The dealership is a one-stop situation where you can see many or all the models you like best in one place. Among the selection of models and makes will also be trim levels, specific features and specifications, too. This means that even though you’re buying used, you can really tailor the product to suit you. Without variety, that’s impossible in the used-car world.
Private sellers are very often one-off sellers who sell their one car and move on. They don’t care anything for any kind of lasting reputation or marketing efforts, and therefore are not motivated to get everything right. Dealerships, on the other hand, are required to meet certain standards, and will be heavily and publicly criticized for failing to reach such standards. The result is generally that dealerships invest a great deal more in quality assurance in new cars. They acquire the new cars, often through part-exchanges with other customers, inspect the cars rigorously and are prepared for the risk that the car might not be worth re-selling. This results in some waste, but overall, they have a sturdy, quality product.
Even when buying used cars, it can be costly. Used doesn’t automatically mean that the car is decades old, falling apart and desperate for someone to buy it. Many used cars are only a handful of years old and, therefore, even after losing 50 percent or more of their original value, still cost thousands of dollars. If you don’t have thousands of dollars to hand, then a dealership can get you an affordable financing arrangement that can help you to spread the cost over longer. Dealerships are bigger enterprises, so they can afford to let buyers purchase cars on credit. Private sellers will not be so patient.
Finally, dealerships may also offer some limited warranties on used vehicles as a way of attracting and securing more business from potential buyers. Private sellers have no way to do this, and so you can only get whatever warranty is already in place on the vehicle. That may be acceptable on some very modern cars, but on older cars you are always taking a bigger risk with repair bills. Dealerships remedy this problem with their own warranties, guarantees, and sometimes other additional services like breakdown cover or a service plan that can give you something a little extra for your money. From a private seller, you only ever get the car, nothing else.
In highlighting the many advantages of dealerships, we’ve also indicated some of the weaknesses of private sellers. It may look very one-sided so far, but there is also a great deal of good to be said for buying cars from private sellers.
Assuming that the private seller you are dealing with has everything in order, such as the paperwork, the entire experience can be done very quickly and with the minimum of paperwork. You hand over money, certain things are signed and the car is yours. The entire process is easy and uncomplicated in a way that many buyers crave. When you need a car in a hurry, and you find an organized buyer, the process is stress-free. So long as you have your process locked down and have gone through your buying checklist to ensure everything is in order, it can be a great option. If you're less sure of the details and don't want the responsibility of handling the money, you can use a service like Topmarq instead.
Though some private sellers can lay on the praise of their vehicle quite thickly, the vast majority are not salespeople, and are therefore very straightforward and easy to deal with. You can quickly go and view the car, test it, inspect it and then give your view on it. If you like it, great, but if you don’t, it’s unlikely that the private seller will push any harder. That makes for a more relaxing buying experience than the high-pressure sales world of the normal experience selling your car to a dealer vs. a private seller.
It’s true that dealerships often have room to negotiate on price, but there’s more of it with a private seller. Employees of a dealership are bound by company and corporate/parent regulations that bound them to certain profit margins, sales quotas and more. Private sellers can do whatever they like with their car. You might even get lucky with a private seller and find one who is in a big hurry to sell the car, thus giving you even more leverage to use to get the price down more. Detailed Knowledge Dealership salespeople know their brands, but they don’t know every individual car. When you are looking at a certain make, model and year of car, that’s how the dealer sees it, as a 2018 RAM 1500, or a 2016 BMW 3 Series. They’ll never see it as more than that. Private sellers, on the other hand are selling their own car, and they have been driving and experiencing it often for years. This means they can convey real first-hand knowledge of how the car works, its benefits as well as its minor issues and quirks. That’s invaluable knowledge and can make a huge difference to your driving experience.
Like many things in the automotive world, it’s hard to give a definitive answer that satisfies all parties. There are clearly advantages to both, so the task that falls to buyers is to determine which of these solutions fits them best. Those in need of flexible financing, a bigger choice of models and additional guarantees, warranties and aftersales service should use the dealership. Those who want a more direct approach, with detailed knowledge of the specific car, room for price negotiation and a simple, efficient process should go through private sellers. We believe that the dealership is likely, on balance, marginally better for most buyers, since many are not in possession of the experience or knowledge to deal with potentially wily and unscrupulous sellers with no care for their own reputation. Having said that, there are good and bad in both worlds.