Whether you are shopping for a car, boat, RV, or something else, you will have to choose between buying from a dealership vs. a private seller. Both have some important pros and cons to consider. The following overview can help you understand the differences to help you make an informed buying decision.

Pros of Buying from a Dealership

With their large selections of vehicles, promotions, and professional appearances, dealerships are the go-to choice for many vehicle buyers. They can make shopping easier when you aren’t sure which vehicle is best for your needs.

New Vehicles

When you buy a new vehicle, you don’t have to worry about whether the previous owner took care of it. It will have its full warranty and be in excellent condition when you drive it off the lot.

Certified Pre-Owned Vehicles

Many dealers now offer certified pre-owned vehicles. These are low-mileage trade-ins that have gone through rigorous inspections to make sure they are in great condition. Repairs and reconditioning are performed when necessary. They may also come with extended warranties.

Large Selections

Finding the right vehicle can sometimes be a challenge. With a dealership, you can browse their inventory and compare different vehicles. You may even be able to test-drive several to help you make a decision.

Low-Mileage Used Vehicles

Many dealers obtain low-mileage used vehicles to sell from auto auctions, trade-ins, and previously leased vehicles. Low-mileage vehicles usually have the majority of their useful lives remaining, but cost much less than new vehicles.

Cons of Buying from a Dealership

Although shopping at dealerships is convenient, there are some important things to consider before you visit one. Being vigilant can help you get a better deal and avoid being encouraged to buy before you are ready.

Dealership Markups

It costs a lot of money to run a dealership. They have to pay employees’ salaries, pay for the property, and take care of other expenses. Dealerships have to mark up the prices of the vehicles they sell to pay for these things and turn a profit.

Encouraged to Buy Now

The salesmen at many dealerships work on commission. If they don’t sell vehicles, they don’t earn any money. Because of this, many salesmen want to close sales. This could be problematic if you aren’t ready to purchase or you want to shop around some more.

Pros of Buying from a Private Seller

Many people prefer to buy from private sellers when they find the vehicles they are looking for. 

You May Be Able to Get a Better Price

Private sellers don’t have to deal with the expenses of running a dealership. Because of this, you may be able to get a better price when you negotiate directly with the current owner. A private seller may also be highly motivated to sell if that person is moving or needs the money.

You Can Learn About the Vehicle’s History

If you are dealing with an honest private seller, that person may let you in on the little details that you would have discovered on your own after buying it.

Finding Used Vehicles Is Easy

Thanks to the internet, it’s now very easy to browse used vehicles for sale in your community. You can find them listed on Facebook Marketplace, Craigslist, OfferUp, and other places.

Cons of Buying from a Private Seller

Although you may be able to get a better price by buying from a private seller, there are some potential negatives to consider. Whether these are deal-breakers depends on your level of risk and other factors.

You Miss Out on Dealership Extras

To encourage a quick sale, many dealerships will offer incentives like extended warranties, free oil changes for a year, or something else. Private sellers usually don’t offer any extras.

Vehicles Are Sold “As Is”

If you are dealing with a dishonest seller, that person may not disclose something important about the vehicle’s condition. Because of this, you should always have a mechanic inspect any vehicle you are considering.

Dealership vs. Private Seller: Which Option Is Better?

When shopping for either a new or used vehicle, whether you should buy from a dealership or a private seller depends on your needs, preferences, and risk tolerance. 

If you are in a hurry, for example, dealerships have large selections that make comparison shopping easy. On the other hand, if you are looking for the best deal possible, you may be able to save money by buying from a private seller.

Regardless of the route you take when buying a vehicle, you will need to arrange financing for it unless you are paying with cash. Financing through a bank or credit union is a must when buying from a private seller. But you may also be able to get a better deal when buying from a dealership by arranging the financing yourself instead of going with the financing they offer.

Great Lakes Credit Union offers loans for a variety of vehicle types. Our interest rates are competitive, and you can conveniently apply either online or in person. Check out the following link to learn more about our vehicle loans.

See Our Vehicle Loans


« Back to Articles