Dealer Versus Private Party Purchases

Choosing Between Car Dealers and Private Sellers

Whether you buy from a dealer or a private party, both require equal amounts of diligence on your behalf, including running vehicle history reports/VIN checks, comparing prices, working out financing, weighing car insurance costs, and inspecting and test driving the vehicle. If you're shopping for similar vehicles at similar prices, consider the following tips to help decide whether to go with a dealer or a private party.

Each choice may come with a variety of pros and cons, and the deciding factors will ultimately be based upon your specific circumstances and the specific vehicle you are shopping for.

As you narrow down your car search, your options between buying from a car dealership or a private party will become more clear.

On this page, you'll find a breakdown of some of the general pros and cons of each purchasing option. While each point may not be applicable to every car buying situation, they may serve to help you further evaluate your choices and eventually find the car that is right for you.

Buying a Car from a Dealership

Purchasing a car from a dealership can often be the simplest option for some buyers. Dealerships can also be a great place to begin shopping for a car. However, before you sign off on a lease or purchase a new car on the dealer's lot, you should think about the pros and cons that may apply to your situation.

Dealer Pros

Some of the pros of buying from a car dealership include:

  • Dealers must adhere to stringent operating/selling procedures. This means you're less likely to be cheated or burdened with a lemon.
  • Dealers provide warranties on vehicles, often new or used.
  • Dealers offer financing options.
  • Dealers can be easily contacted should problems arise.
  • Vehicles are inspected by certified trained technicians.
  • Dealers offer certified cars.
  • Car dealerships will usually help you with your state DMV's titling and registration process.
  • You have the choice between a variety of cars in one location.

Dealer Cons

Some of the cons that may come with buying a car from a dealer may include:

  • Higher prices and less room for negotiating.
  • Must deal with professional sales teams, reliant upon commissions.
  • It can be easy to get caught up in holiday specials, sales pitches, and signing incentives.

Buying a Car from a Private Party

Buying a car from a private seller can sometimes place a little more leg-work on the buyer. You'll have to search through classified ads and car listing websites or find a seller through word-of-mouth from a friend or family member. Before shaking the seller's hand and signing a check, it's important to weigh the possible pros and cons of a buying a car from a private seller.

Private Party Pros

If you're buying from a private seller, some of the pros include:

  • More room for price negotiating. You may be able to get closer to a price that works for you.
  • No high-pressure sales pitches.
  • Lower starting prices.

Private Party Cons

Some of the cons of purchasing a car from a private seller can include:

  • Dealing with an unknown person, not bound to Federal Trade Commission rules.
  • No warranties on the vehicle. Private parties are more likely to sell the car "as is."
  • No trade options. You'll probably need to pay the asking price in full at the time of purchase.
  • You must complete and submit most of the paperwork yourself. This may include title transfers, a bill of sale, registration documents, etc.
  • Limited to seller's time schedule for inspecting the vehicle.
  • You may have to travel a long distance just to see a single vehicle.

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