Buying a used car can feel a bit like running a gauntlet. There’s car salesman, transfers and knowing if it’s a trustworthy deal. There are two main sources of buying used cars: dealers and private sellers. Dealers sell cars as part of a business model, while private sellers are selling for personal reasons. So which should is the better option for you and your used vehicle?
Let’s hash out a few pros and cons of each.
Private sellers are almost always cheaper
Most people don’t know this, but auto dealerships actually make more money off used car sales than new car sales. Dealers will have access to large inventories of used cars, most of which they purchase at wholesale prices or through auctions at a fraction of the price. These will then be resold to consumers. Because dealerships have to deal with the hassle of finding the vehicles, accepting trade-ins and maintaining inventories, you’ll often find that they’ll charge a much cheekier mark-up than a private seller.
Dealerships can’t knowingly sell you a broken car
In South Africa, the buyer is protected by the Consumer Protection Act. Because of it, dealerships can’t knowingly sell you a car that doesn’t meet reasonable roadworthy standards. If you buy a car that has a basic operating problem at the time of purchase (things like a broken axle, cracked engine, malfunctioning brakes), then you’re entitled to take legal action against the dealership you bought it from. Unfortunately, if something goes wrong a month or two after purchasing the vehicle, you’re going to have a difficult time proving that the problem existed at the time of sale.
When it comes to vehicle history, a private seller is likely to have more information about the car, than a dealer. This is just basic mathematics, as a dealer potentially sells thousands of cars a year. The private seller probably knows the ins and outs of their car, having owned it for some time. Sure, some private sellers might be a little sketchier than others, and it’s up to you to decide how much you trust someone, but decent documentation on the vehicle’s history will go a long way to help.
The danger of a vehicle ‘as is’
While dealers are restrained by law about malicious dealings, it doesn’t stop them from blurring the lines. If a car is sold ‘as is’, then you had better keep your guard up and give it a proper look over. Once you buy that car, any problems that it might have are yours. While private sellers might not use the terminology, you should always be cautious and assume that any vehicle sold by a private seller is ‘as is’.
A practical example of this is when one buyer was looking for a used vehicle. They had their hearts set on a used BMW and preferred to buy straight from the owner. It seemed like a straight deal. They found a used BMW for sale, in great condition, being sold by a private seller. It ran well and fell within the buyer’s budget. The seller was selling the vehicle ‘as is’. Just to be sure, the buyer took the car to a professional inspection, whereupon it was found to be two vehicles that had been spliced together after an accident. The relieved buyer was able to pass on the deal and eventually found his dream used BMW through another private seller.
Dealers have reputations to uphold
A very important factor in the dealer vs. private seller debate is that dealers are businesses and as such have a reputation to uphold. If a dealer sells a flawed car without disclosing its issues, that dealer risks backlash from an angry buyer. And in an age of immediate social media repercussions, the dealer may find their reputation being irreparably damaged. A private seller doesn’t really have the same concerns or responsibilities, since theirs is most likely a once-off sale. As a result, a good dealer is likely to go through great lengths to ensure that the vehicles they sell are up to scratch, while many private sellers will simply avoid any issues, passing them off as the ‘buyer’s problem’.
Setting a price
Because dealers have a business rapport to uphold, they’re likely to be more expensive than a private sale. Don’t be afraid to haggle and negotiate before you buy. Do your research about what certain used cars go for. There are plenty of buyer’s websites and magazines that’ll have this information. Don’t let a pushy seller rush you into a deal. There are plenty of motoring fish in the sea and you’ll always have options.
When looking for a used car, there are many benefits and drawbacks to each side of the coin. Dealers have a reputation to uphold, but will probably be a little more expensive. Private sellers might be cheaper, but you’ll have no accountability if the vehicle is a dud (even with the right documentation). Be cautious and make sure you’re armed with all the right information to make a solid and responsible deal.
Also view;
Buying a Vehicle, Vehicle Finance and Road Safety
Buying and Selling a Vehicle – Informed decisions and the Vehicle Retailer
Buying Vehicles and an Auction