Dealer Versus Private Party Purchases

Ready to buy a used car? Have you decided whether you'll visit a used car dealer or buy from a private party? Are you familiar with the differences between the two?

We've got the information you need to learn more about used car dealer purchases versus private party purchases, the pros and cons of each, and how to weigh them against each other to make the best decision for you.

Dealership & Private Party Used Car Sales

When you decide to buy a used car, you can buy from either a used car dealer or a private party.

Generally, buying a used car from a dealer takes a lot of pressure off of you—the buyer—because typically the dealer handles all the nuts and bolts of car buying (such as paperwork); on the other hand, private party car sales mean you and the seller must take care of the entire transaction yourselves. On the flip side, you may find it much easier to negotiate a price you want with a private party, especially if they have a pressing need to sell.

This is just a glimmer of what to expect when buying a used car from a dealer versus private party car sales. Let's take a look at some of the other pros and cons of each.

Dealership Purchases: Pros & Cons


Pros to buying your used car through a dealership include the following:

  • As stated above, generally the dealer handles all the paperwork associated with ownership or title transfer and registration for you.
  • Most dealerships offer financing options.
    • You can always look into bank auto loans, but it's still nice to have options you can compare.
  • Sometimes, dealerships offer warranties on their used cars.
  • Usually, cars from a used car dealer have been thoroughly inspected and, if necessary, repaired.
  • Some dealers sell certified pre-owned vehicles.
    • This means the used car has been through an official series of inspections and possible repairs, and comes with a special warranty.
  • You might have to visit only a few dealership locations to find the right used car for you.
  • You might already have a used vehicle you can use as a trade-in vehicle, which could act as part of the “new" used car's down payment.
  • Buying a used car from a dealer offers you more legal protection than buying from a private party.
    • For example, because of the stringent laws dealerships must follow, you're less likely to run into problems such as purchasing a lemon or undisclosed salvaged vehicle.


Consider these cons of buying with a dealership before making your purchase:

  • Sometimes, used car dealerships charge higher prices than do private parties (and leave less room for negotiation).
  • You must deal with a professional sales team, which could get pushy as they often rely heavily on sales commissions.
    • Unfortunately, these sales personnel may not have your best interests at heart; they want to make the sale so they can make their commission.
  • It's easy to get distracted by special deals and lose sight of your bigger picture.
    • You might walk onto the lot knowing what you want, but a dealership's holiday sales, sales pitches, and buyer incentives could derail you.

Private Party Purchases: Pros & Cons


The following are pros to buying your used car through a private party:

  • Many private parties use “blue book" value (generally from the Kelley Blue Book) to determine their asking price.
    • The KBB is an excellent resource for determining the true value of a used car.
  • Sometimes, you have more negotiating room with private sellers.
    • Again, you can refer to the KBB to get a seller's original asking price lowered.
    • Also, sometimes sellers are eager enough to move their used cars that they'll accept an “OBO" (“Or Best Offer").
  • Although they want to sell their used cars, many private sellers aren't as pushy as dealership salespeople can be.


Of course, buying from a private seller isn't free of risks. Consider the following cons:

  • Private sellers aren't bound by the same strict state and federal laws as are dealerships.
  • You won't receive a warranty on the vehicle.
    • Most private sellers sell their used cars “as is," meaning, you're stuck with whatever problems pop up.
  • Generally, there are no trade-in options; sellers want cash, not your current vehicle.
  • Typically, a lot more footwork goes into finding the right used car from a private seller.
    • Unless you get lucky, you could find yourself visiting way more private sellers than you would used car dealerships—and you must research each and every one of those used cars.
  • Ordering a vehicle history report is easy enough, but having a trusted mechanic inspect the vehicle depends on the seller's time—not yours.
  • You and the private seller are responsible for all the paperwork.
    • Such paperwork can include the bill of sale and/or transferring the title, as well as transferring the registration and handling all related taxes and fees.
    • Most often, these transactions mean a trip to your department of motor vehicles or equivalent agency.
  • Depending on your state of residence, it's up to you to make sure the vehicle is up to date on its smog and inspection requirements.

Dealer or Private Party: Your Choice

Going over our list of pros and cons above might make you feel as if buying a used car from a dealer is the way to go—and for many, it is.

However, that's not to say that buying a used car from a private party is without its perks. Even with all the paperwork and other transactions you must handle yourself, buying from a private seller sometimes is more convenient.

Weigh the pros and cons against your personal situation (what kind of budget do you have? How much time can you spend? Who is offering the exact used car you want?) before you make your choice. Don't enter either transaction on a whim.

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