Dealer or For Sale By Owner?

When it comes time to buy a used car, there are essentially two types of shoppers; those who buy exclusively from dealers, and those who only want a car for sale by owner. Each person thinks the other type of shopper is crazy. Who is right? Can either option be valuable in your search for a used car?

Private Party/For Sale By Owner

Pros: The biggest pro with private party sales is the price. Not only are private owner’s price ranges more negotiable (they often have no bottom line and are anxious to get rid of a car), they also know they have to sell it for less as they are presumably providing less “value”.

The next biggest pro is that you get to meet the person who has been driving and caring for the car most recently. This may not seem like that big of a deal initially, but surely a 17 year old with a lead foot and a 58 year old who changed the oil every 2500 miles are completely different types of drivers. You can question them about why they are selling the car, etc.. which can often bring up problems before you buy.

Cons: There is no guarantee behind a private party sale. In most states private party sales are “as-is” and the previous owner does not have to give full disclosure about the car. So even if they know the transmission is about to go, they are often not legally required to tell you this and caveat emptor applies.

Pros: The biggest pro behind a dealer sale is that there is usually some time of warranty available. Dealers also often run Carfax reports for you and have their own mechanics to fix cars. Dealers are experienced car buyers who get most of their inventory either from trade-ins or auction. Having years of car buying experience, they are able to find cars in prime condition that they know are in good condition and will sell well.

Cons: The two biggest cons are tied, the price you will pay for a car from a dealer is almost always higher then that of a private owner. You also have less room for negotiation and it’s often uncomfortable for people to negotiate with dealers who do this for a living.

So which path do you choose? At Used Cars On-Line we used to only list cars for sale by owner, but recently we have started showing ads from dealers as well. Why this change? We believe that the best bet for car buyers is to shop both private party and dealer vehicles. First, find a car you want, a price range you can afford, and from there worry about the pros or cons of a particular deal.