When it comes to buying a used car, you usually have two options – go to a used car dealer or go private (which includes buying off relatives). They both have their pros and their cons. So, why should you go for one over the other? Let’s find out.
Now, talking with family members or friends who have bought cars seems like a good start as they have had experience of either one or both in their past. However, it can be jaded if they only had one experience with a bad dealer or dodgy private seller. It’s best to get a proper perspective of what each has to offer.
Vehicle History
This one easily goes to the private seller. They are the ones who have driven the car for a decent period of time (some of them since new), have been through the servicing process, and done any necessary repairs and upgrades as needed. They also know all the quirks, bumps and bruises the car has encountered (unless they bought the car at auction and are trying to resell for a profit – avoid!). Always check with the seller how long they have owned the car, ask whether they bought it from a dealer, private, or auction, and why they want to sell. Dealers usually buy their stock most of the time from car auctions, have a contra deal with a new car dealer who has a trade-in to dispose of, or as a trade-in on something sold from their own lot. They don’t know the nuts and bolts history of the car. You can of course get a vehicle check from Carfax or Autocheck which can give you some information on the title history, any previously listed accidents, mileage, and number of owners, but nothing compares with first-hand knowledge from the current owner. I’d always get a full report on the vehicle either way. It just helps getting an unbiased overall impression.
Seller Reputation
The dealer is the one who has a reputation to uphold, and it’s easy enough to find online reviews and ratings on dealers to find out if they can be trusted. This is a positive over buying from a private seller as they have no reviews or ratings (unless they decide to sell on ebay). The ones who can’t be bothered talking, have no idea about the car, or answer your questions with a ‘yes’, ‘no’, or ‘I don’t know’ without elaborating, have something to hide. This is also representative in the way their advert is presented. Bad (or not enough) photos, negative wording, minimal or no description are also red flags. Great sellers put effort into presenting their car clean in photos and in person, put a decent description, are up front with service history and any faults or issues that may need attention in the future, and are only too happy to chat about their journey with the car (who may even have a nickname).
Purchase Price
Dealers more often than not charge a higher price, and are usually quite strict about their ‘firm price’. This is because of their overheads mainly of staff wages, rent, and advertising costs. They usually don’t budge, preferring to wait for a buyer who will pay in full, or take a lucrative finance option in which they get a healthy commission. Private sellers sell their cars at a lower price, and are quite often willing to haggle a little more – especially if you show them respect, listen to their stories, and show a genuine interest in their car. If you do your homework on the ‘Kelley Blue Book’ value of the model you are looking at, this may come in handy as a bargaining tool if the car is priced a little higher.
Financing
Although dealers have financing options in place, it’s still worth doing your own research to find the best finance option through a bank before going to the used car yard. Banks are not so interested in financing private car purchases, so keep this in mind if you need to finance.
The Seller
Dealers are doing a ‘job’. They are salespeople who have all the tips and tricks up their sleeve to bamboozle you and put you off your game (even if you have a prepared checklist of questions). Unless you are fortunate to get a more personable dealer (usually the smaller dealer who has one car yard) or is recommended (although this isn’t always a sure thing), I’d prefer to deal with a private seller who is not used to the selling process, so is just as nervous about answering questions as you are to ask them.
The Contract
A dealer will take care of all the paperwork, you just have to read and sign where applicable. Ensure you read the contract very carefully though, as they will often pop in handling or hidden fees you haven’t been told about, and make sure the sale price is the price agreed upon. Make sure you get an explanation of all fees, and take someone with you to look over the contract as well, in case you miss something. You will definitely need someone with you when filling in the bill of sale on a private car sale which could take a bit longer to go over.
It’s worth noting that some dealers offer what’s called a ‘Certified Pre-Owned Vehicle’ which is a used car that has been through an inspection, refurbishment, and certification process by an authorized car manufacturer or used car dealership. If this is the case, ask to see the checklist of what’s been inspected and the results before taking the sale process further.
Dealers also offer extended warranties, but it’s usually only on certain parts of the car for limited mileage and for a certain period. Make sure you understand what is being offered and how much extra it will cost, and whether it’s worth actually taking for your circumstances.
When purchasing from a private seller, you will have to go into the Department of Motor Vehicles to transfer the registration, and you will also have to make sure the vehicle is up to date on smog and inspection requirements. It’s great experience of the buying process if you’re up for it.
The choice is up to you. I’ve explained the pros and cons of buying from both types of seller, so go forth and do battle.