Used Cars – By Owner vs. Dealer

You have done your research and decided that a used car is right for you. Now, where do you buy your used vehicle? Should you look for your next vehicle from a private seller or head to the dealership? Consider these factors as you make your decision.

Financing Options

Unless you intend to buy your vehicle with cash, you will need to consider your financing options. Financing a used vehicle already comes with more challenges than financing a brand-new vehicle. You are likely to find that the rules and restrictions for financing are more limited when you try to buy through a private seller.

This is because lenders want to protect their loans. Since privately sold vehicles are not put under the same inspections as new or used cars from the dealership, it can be more difficult to determine their true value or condition.

History of the Vehicle

It is always a good idea to evaluate the history of any used vehicle you are considering buying. A vehicle’s history gives you an idea of its previous maintenance problems as well as repairs made and warranties claimed. The good thing about buying from dealerships is they always have vehicle history reports available.

A CARFAX report can provide you with a detailed understanding of the vehicle, including its odometer reading, status of the title, accident reports, and registration history. Because it costs money to request a CARFAX report, private sellers are less likely to offer them. If they don’t, you are buying based on the seller’s word. Dealerships tend to be more trusted sources. Because they want to maintain their reputation, they are often more transparent about a vehicle’s history.

Available Warranties

A warranty is a written guarantee from the manufactured or seller that protects your purchase. A warranty is a good thing to have when buying a used vehicle. Many dealerships will offer warranties to help sell their used vehicles. When a warranty is available, you can feel confident about your buying decision, because if anything goes wrong, the manufacturer or dealership will cover the cost.

Additionally, many dealerships offer certified pre-owned sales. A certified pre-owned vehicle is a used vehicle that has undergone an intensive inspection process and has been certified by the manufacturer. Essentially, this means that it is a used vehicle, but it has successfully gone through many of the same inspections as a new vehicle. Some certified pre-owned cars come with special financing or extended warranties.

Private sellers are unable to offer warranties. Even if your vehicle breaks down hours after the completion of the sale, you are solely responsible for its repairs when you buy through a private seller. Depending on the details of any existing warranty from the manufacturer or dealership, you might have options available to cover the cost of your repairs.

Ease of Buying Process

Car buying itself can be a lengthy and stressful process. In addition to securing funding, you need to research and choose the right vehicle for your driving needs. Once you have found your ideal vehicle, the buying process begins, and that can be overwhelming in itself. One of the benefits of working with a dealership is that it handles the paperwork for you. This can make the car buying process much easier.

Many dealerships handle tasks such as transferring the title and even ordering you a license plate. If you choose to buy through a private seller, you will need to do all these things yourself. Because this process can be time-consuming, it can take longer until you can legally drive the vehicle.

Pricing

Pricing is perhaps one of the main reasons people choose to buy from a private seller. While you do have greater control over negotiations when buying a privately owned vehicle, there are other costs to consider. For example, you might end up spending thousands of dollars more on repairs if you buy a vehicle that lacks a history report and a warranty. Private sellers are also more likely to price based on their needs, even if they are underwater with their loans. A dealership, in comparison, prices based on the market.

Dealerships also often roll transfer and title fees into the cost of the vehicle — expenses you probably don’t consider when buying a vehicle from a private seller. Dealerships also have more control over discounts and might offer manufacturer incentives or deductions in the form of rebates. The amount to close the deal can differ, as well. Private sellers typically expect you to pay the full price upfront. If you finance a vehicle through a dealership, you are responsible for the down payment and then your monthly payments.

Inventory

Inventory is another major difference between a private seller and a dealership. If you are unsure what type of vehicle you want or you want a car with a unique color or certain features, then you might need to buy from a dealership. When you buy from a single owner, you are restricted to the vehicle they are selling. Of course, if a private seller has the exact vehicle you have been looking for, then you might decide to buy it.

Many dealerships will work to find you the specific vehicle you want. If you are looking for a certain trim level, for example, the dealership will contact you if one comes into its inventory. You are much more likely to find a unique vehicle or one with all the features you need using this process than waiting for a private seller to list one.

Consider all the pros and cons when deciding where to buy your next used vehicle. If you want a convenient buying process with protected pricing, then you might want to consider buying your vehicle from a dealership. Hiley Mazda of Fort Worth has a large inventory of quality used vehicles. We invite you to check out our used showroom and our many vehicles that offer competitive pricing and reliable warranties, ensuring you find a used vehicle you love.

Image via Flickr by Got Credit