Purchasing a car from a private seller can be a great way to save money on a vehicle while avoiding the dealership. If you know what you want, there’s no reason not to entertain buying a car privately. But, there are some risks to be aware of. Once you learn about these risks, you may feel more comfortable buying a used car from a more trustworthy source like a bank or credit union.
Lack of Consumer Protection
The first thing to know is that state and federal laws that apply to dealerships do not apply to private sellers. Even though people don’t always enjoy working with dealerships, there are protections in place if you’re not happy with your purchase.
Unfortunately, you don’t get these same protections when shopping privately. You’re buying the car as-is, which means whatever problems it has will become your problems. Additionally, you won’t get any warranties, unless the manufacturer’s warranty is still valid. In this case, the warranty can be transferred to your name.
When you walk into a dealership, you have multiple people talking to you and asking about your wants and needs. The knowledge that car salespeople have can be incredibly helpful to your search. Even if you came in looking for a specific car, they can recommend other vehicles that will fit your needs and budget.
Naturally, you aren’t going to get this type of customer service when buying from a private seller. The seller may be nice enough to answer your questions, show you the manual and take you for a test drive, but they don’t have to do any of these things, either. Consider all of the time you’ll spend researching cars, scheduling meetings, arranging for transportation, etc. Time is money after all.
Not only are you responsible for everything listed above, but also you and the seller must handle the paperwork. This means you’ll have to work with the seller to transfer the title, registration and any related fees, taxes and warranties. Usually, you’ll have to make a trip to the DMV to sort this out.
Again, this all depends on the seller, as some are more accommodating and will accept lower offers. However, many private sellers are not flexible on price. They’re expecting to make a certain profit, or they may be emotionally attached to the vehicle. This is why private sellers often charge more than they should.
Banks and Lenders are a Safe Alternative to Private Sellers
If you’re unsure about working with a private seller but want to avoid the dealership, consider purchasing a repossessed vehicle through a bank, credit union or lender. Because these vehicles come straight from the source, there’s no middleman, easier negotiations and attractive financing offers. Plus, the banks aren’t emotionally attached to the vehicles – they want them sold!
To see what types of repos are available in your area, browse the inventory on RepoFinder.com.