Should You Buy A Used Car From A Dealer or Private Party?
By Tom Catuosco
When you’re looking to buy a used car, you want to buy the best car you can for the least amount of money and the least amount of hassle. Aside from deciding the make, model, and year of the used car you want to buy, there is another choice to make - Do you want to purchase your used car from a dealership or from a private party seller? Dealerships and private party sellers each have their pros and cons.
Buying from a Dealership - PROS
Vehicles are Inspected - Since car dealers are businesses that have reputations to protect and need to protect themselves legally, most vehicles being sold by used car dealers will have undergone inspections by a mechanic before being put up for sale. It’s not in a dealer’s best interest to knowingly sell a car with problems. That said, every car dealer isn’t a saint, so it’s still a good idea to have any used car you're interested in looked over by your own mechanic before you buy.
Warranties & Guarantees - New car dealers that also sell used cars usually offer CPO (certified pre-owned) guarantees on used cars they sell. Many smaller, independent used car dealers also offer warranties or guarantees with varying degrees of coverage on vehicles they sell.
They Take Care of Paperwork - Most of the paperwork involved in the sale and ownership transfer of a used car is handled by the dealership, saving you the hassle.
Easy to Contact - When you buy your used car from a dealer who has been in business for long time, chances are they won’t skip town on you. If you ever need to get in touch with the dealership after the sale with any questions or issues, you know where to find them and contact them.
Subject to Government Regulation - Car dealers are subject to various state and FTC regulations which are in place to protect car buyers.
Buying from a Dealership - CONS
Higher Prices - Car dealers will often charge more than private party sellers for comparable vehicles. This is simply due to the fact dealerships have overhead costs associated with running their business.
Commissioned Salesmen - Most car salesmen work on commission, so some may give you the “hard sell” to make sure you don’t leave the dealership without buying a car.
Buying from a Private Party Seller
First off, just in case you don’t know what a “private party” seller is - A private party seller is a person just like you or me who is selling a car they own and isn’t in the business of regularly buying and selling cars for a living.
Buying from a Private Party Seller - PROS
Lower Prices - Used cars from private sellers can generally be bought for less money than cars at a dealership since the private sellers don’t need to maintain a business.
More Negotiating Room - There’s often more room to negotiate on a car’s price with a private seller.
Less Pressure - Since a private seller isn’t selling their car to make a living, they’re less likely to be pushy to make a sale.
Buying from a Private Party Seller - CONS
No Warranties - A car bought from a private party is usually sold “as is.” Private sellers want to sell their car and be totally done once the sale is complete. If you have problems with the car after purchase, you’re generally on your own. It is entirely up to you to thoroughly inspect the car, test drive it, have it looked over by a mechanic, etc...to satisfy yourself with the vehicle before buying it.
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| No warranty express or implied. |
No Government Regulation - Private party used car sellers aren’t subject to FTC and other regulations. This gives them more room to try pulling shenanigans when selling their car.
Dealing with Weirdos - Unlike a dealership, where you have an idea of how a salesman will generally behave, private party sellers come in all types. Many are great and easy to deal with, but there are also a fair amount of goofballs who will jerk you around - missing appointments, not answering questions or returning messages, proposing odd conditions to the sale. Try to stay away from goofball sellers.
So, which one should you choose? The pros and cons listed above are general comparisons between buying a used car from a dealer vs. a private party seller. You can have good or bad buying experiences in either situation. In the end, it’s good to keep your options open and look at both dealership and private seller vehicles for a car that suits your needs.