Should You Buy a New Car Through a Private Seller or a Dealership?

Disclaimer: This post is sponsored by PSECU, a Pennsylvania-based credit union.

Next to buying a home, a car marks the biggest purchase many American adults make. New cars can cost a fortune and depreciate the moment they leave the lot, plus they may pose safety hazards yet to be identified. Used cars cost less and have proven free of manufacturer defects, but they may have suffered undisclosed damage in the past.

When buying a used car, does it make more sense to do so through a dealer or a private seller? Both methods of vehicle acquisition have their upsides as well as potential pitfalls. Here’s what people should keep in mind so when the time comes to get some new wheels, they are prepared to make the best choice.


  • Private Sellers — Pros


Those choosing to purchase a vehicle from a private seller have the greatest degree of negotiating power. If price matters more than any other factor, going through an individual seller may save money. Most private sellers use the Kelley Blue Book to value the automobile, keeping prices somewhat uniform.

Private sellers can prove just as motivated to rid their garage of an unwanted vehicle as buyers may be in securing a way to get to and from work. To get the best deal, seek ads private sellers took out some time ago. If the car has been listed for a few weeks, the owner may welcome more aggressive dickering.


  • Private Sellers — Cons


The downside of buying from a private seller means that whatever mechanical problems the vehicle has become the headache of the buyer. Private vendors offer no warranties, so those lacking solid automotive knowledge should have the car inspected by a mechanic they trust before forking over the full amount of the payment.

While sellers reasonably may request some money down to protect their property before letting it go on a test drive, paying the full sum upfront can result in considerable repair bills later.


  • Dealers — Pros


Those who hesitate in their ability to repair common vehicle problems or perform maintenance on their own benefit from purchasing a used vehicle through a dealership. Buying from a dealer usually means getting at least a limited warranty as part of the purchase price. Dealerships also offer financing options for those who cannot afford the full sticker price upfront.

Those with a trade-in vehicle likewise should go through a dealer, since they will receive fair compensation for their trade. Before heading to the lot, though, take a moment to hop online and research average resale values to know if the trade offer is fair.


  • Dealers — Cons


One potential downside of visiting a dealer is having hungry salespeople descend upon shoppers the moment they pull into the lot. Instead of waiting for Saturday, try car shopping during the typical workday when sales teams run on skeleton crews and individual reps take the time to answer questions, not just get a signature.

Unlike dealing with a private seller, dealerships require certain paperwork and verification of both income and credit rating. Those with less than ideal credit often end up paying more, so whenever possible, attempt to find outside financing to lock in a lower rate. Credit unions, for example, typically charge members less in interest fees than do dealer financing options.


  • Getting the Most From A Used Car Purchase


Whether opting to purchase through a private party or a dealer, buyers should keep the following additional tips in mind:

  1. Research in advance. The internet makes it simple to access Blue Book values as well as compare prices across different vendors. Take the time to do homework ahead of time to get the most bang for the car-buying buck.
  2. Get a second opinion. Still unsure if a certain auto purchase is right? Take a trusted friend along for the test drive and ask for their unbiased advice on proceeding.
  3. Get the facts. Sites such as Carfax enable buyers to research a vehicle’s maintenance history prior to purchase by entering a vehicle identification number (VIN) into a database. Taking the time to see if a particular car once floated downstream when Hurricane Harvey hit can save a fortune in future maintenance bills.
  4. Sleep on it. No used car deal warrants rushing ahead with making a purchasing decision. Wait 24 hours before signing on the dotted line — especially when the deal seems too good to be true.


  • Cruising Through Buying a Used Car


Used vehicles cost significantly less than new models. Buying used doesn’t need to mean assuming all the risks in the transaction. Taking time and shopping around almost always results in finding the best ride for both the driver’s personality and their budget.

Author: Brandon Park