Buy a Used Car From Owner or Dealer?

February 19th, 2015 by

When you’re in the market for a used car, you’ve got a lot of options. One of the first decisions you’ll need to make is whether you should buy a used car from an owner or from a dealership. Let’s take a look at your options.

For-Sale-by-Owner

The Internet has revolutionized commerce. Anyone with a car can list it online and sell it directly to consumers. There are many websites where vehicles are listed directly by their owners and auctioned off to the highest bidder. You can search, view and bid on cars that are within your specified search terms. Then you can spend the next several days checking and re-checking the listing to make sure that you’re the highest bidder. If you do end up winning the auction, you will have to secure financing, travel to the owners’ house and hope that the car is as advertised. The car could have undiagnosed maintenance problems or other unseen damage that you won’t discover until after you’ve purchased it.

Another option available to you is searching online white pages. Owners can create ads for their used vehicles on sites like Craigslist looking to sell directly. You can spend a lot of time searching for the right car at the right price, hope it lives up to the description and that it’s still available when you call. You will have to compete with other prospective buyers to get it for the right price. You will handle the financing yourself and assume all the risk once you’ve purchased the car.

When you shop for-sale-by-owner, you’ll also realize that you’re spending lots of your valuable time running from place to place and calling unreliable and sometimes shady individuals. Even worse? You could potentially put yourself in a dangerous situation with a fraudulent seller.

On the positive side, you can potentially find rare or uber-specific vehicles that are being sold by an individual that you couldn’t find at a car dealership. Customized vehicles are also much harder to come by at a dealer, however, these types of cars can also be a risky purchase.

For-Sale-by-Dealer

If you choose to buy your next used car at a dealership, here’s what you can expect. You can start by browsing the selection of pre-owned vehicles on a dealer’s website or visiting the dealership location. Depending on the dealership, you can view hundreds of cars, as opposed to just one. Usually, each used car will have been inspected and appraised by a professional staff member. Many times, dealerships include free Carfax reports detailing the cars maintenance record and any history of major work done. Additionally, some dealerships offer certified pre-owned vehicles that are backed by a warranty.

When a dealership buys a car from an owner, there is always the possibility that the vehicle has major damage that goes undetected until further inspection. However, a quality dealership like Volkswagen of Athens must fix the issue before they can relist the vehicle for sale. Therefore, the risk is taken on by the dealership, and not the owner. Any intelligent investor will tell you that less risk is better!

The Conclusion

There are pros and cons to each method. However, when you boil it down, purchasing from an owner is simply more risky than buying a used car from a dealership. You can do all the leg work and assume all the risk, or you can let the dealership take the risk.

Owner Dealership
Buyer takes on more risk Dealership takes on more risk
Browse tens of thousands of cars online Browse on dealership website
Must deal with unprofessional sellers Shop from courteous professionals
Must self-finance your purchase Financing handled by the dealer
Can find rare or customized vehicles Cars are much less likely to have issues
No warranties Warranties available
Car description is left up to owner Vehicle descriptions are much more accurate and thorough
Pricing can be unreliable and erratic Vehicles have been professionally appraised

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