Private Sellers versus Dealerships

When you begin the process of buying a car, you need to decide where you want to get it from. You have the option to go to a dealership or a private seller. In order to make the right decision you need to look at all aspects of each selling option to make sure you know the advantages and disadvantages.

Which will know a better vehicle history?

Private sellers and dealerships are pretty equal when it comes to understanding vehicle history because of tools like Car Fax reports. However, a private seller will know everything else that is not listed on the Car Fax report and it is up to them if they want to share that information with you.

Does one have better financing options?

If you are looking to get your car from a private seller then you may run into some issues when it comes to getting a loan from a bank. Luckily, a majority of banks have private party auto loans that allow borrowers to get the money they need during the car buying process. If you are looking to get financing through a dealership you really shouldn’t face too many issues unless the car you are looking to get is too old or has too many miles. Regardless of the loan type you want to make sure that your credit is in good standing.

Are there tax benefits with these options?

Unfortunately, the tax benefits that are available depend on the state that you live in. In some states, there are benefits for both car dealerships and private sellers. In other states there is no sales tax which means you will save money regardless of the fact whether it is a private seller or a dealership. Another tax advantage for some states is the fact that sales tax will only be assessed based on the difference between the purchase price of your new car and your trade-in. Overall, it would just benefit you to check your local laws to see how you could potentially benefit.

Who will have the better price?

A majority of the time you will see the better purchasing price come from a private seller instead of a dealership. The reason that this may be the case is because dealerships need to profit on the cars that they sell while private sellers will usually not make a profit. You also have a better chance at negotiating prices with a private dealer which can save your more money.

Chances of getting scammed?

When people make big purchases like a vehicle, they want to make sure that they don’t get ripped off. That is why it is important to know that dealerships are less likely to scam customers compared to a private dealer. The reason is because dealerships have reputations that they need to uphold. If they are running fraudulent businesses, then they run the risk of getting their business licenses revoked. You can also get warranties that secure the buyer if there is an issue that the dealership can fix it. However, with private sellers, they don’t need to fix any issues and are more likely to avoid confrontation if there is an issue with the vehicle.