Buying from a Car Dealer vs Buying from a Private Seller

Buying from a dealer vs a private seller

We get asked a lot of questions here at The Car Brokers – but one we get asked frequently is – should I buy a car from a car dealer or private seller?

If you want to buy a new car, you’re almost certainly going to buy it from a dealer – the following information is therefore most useful for those looking to buy a used car.  Here’s how we summarise the reasons for buying a used car from a dealer or privately. 

The benefits of buying from a dealer

It can be easier

You can buy through a dealer online, from a physical car yard or at auction.  Because dealers hold a range of cars, you can quite easily browse and test drive a range of cars.  This can be helpful if you don’t know the specific car you are looking for.

Dealers can provide extended warranties, finance, trade-ins and insurance.  They will usually even arrange to transport your car to you, if the car you want is not located in your town or city.  This one stop-shop approach can save you time and effort.   This convenience does come at a cost though. 

You are buying from an ‘expert’

Car dealers can talk you through the features and benefits of a range of used cars.  Remember though, they want to sell you one of their cars, they aren’t going to recommend a car that they don’t have for sale.  

Reduced risk

All car dealers must:

  • Comply with the Consumer Guarantees Act

  • Comply with the Fair Trading Act – that is, not mislead you and be clear they are a dealer

  • Be registered

  • Give you accurate information in the Consumer Information Notice (CIN) – the history of the vehicle, price, condition, odometer reading and money owing.

While your risk is reduced – these benefits can be of limited value in real life.

They really want to sell you a car

Car dealers don’t want stock sitting around, they want to hold a car for as little time as possible. That means if you can negotiate well, and the car you want has sat on the lot for a while – you could get a good deal. 

The benefits of buying from a private seller  

Buying privately should be cheaper

That’s because the margin the dealer needs to add to make a profit doesn’t need to be added by a private seller.  But from our experience some people expect more for their vehicle than its true market value.  So you need to be careful – buying privately isn’t always cheaper.

You are buying from the person who should know the car best

Because you’re very likely to be talking to the car’s owner – you can get a much better understanding of the history of the vehicle and any issues with the car.  Of course, sellers aren’t always completely honest so again, be careful.

You have more choice, particularly for cheap cars

As long as you are prepared to put in the time and effort to look widely, you will have more choice of the make and model of vehicle to consider.  We would say though this is mostly true for cheap vehicles.  

You can still manage risk 

If you want to reduce your risk from purchasing privately you can buy a used vehicle warranty, get your potential vehicle independently checked and there are online website that can help provide information about a car’s history.   

Summary

Whether you should buy your next used car from a car dealer or private seller comes down to how much time and effort you want to spend on the exercise and whether you think the legislative requirements that a car dealer is required to provide gives you peace of mind. 

The thing to remember is – if you want the best deal for the least effort on a new or used car, just contact The Car Brokers. We can mitigate the risks of both the private sale and dealer side whilst providing the upside of both. 

thecarbrokers.co.nz