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Dealer or Private Seller? Where to get your Used Car

Michael Jones

Auto Loan Expert

With the rise of the internet there are more and more ways to buy the things you need. This is as true for groceries as it is for movies and household supplies. One of the things that has been dramatically enhanced by the internet is the number of private car sales that buyers have access to. A private car seller is just an ordinary person who wants to sell their car. In the past this required taking out ads in newspapers or leaving the car on the road with a sign, but with community boards like craigslist and apps that let you take a picture and post an item for sale, private car sales have never been easier.

However, many people wonder if getting a used car from a private seller is better or worse than using a dealership. Each strategy has its own pros and cons, so we put together this guide to help buyers make the best used car decision for their situation.


Dealerships are the traditional place to buy a car. Many dealerships focus on selling new cars, but receive used cars as trade ins. The dealership is thus interested in selling the used car so that they can generate a profit on the sale. Other dealerships focus on buying used cars at auctions or other places, and have a host of used cars on offer.

Buying from a dealership has a number of advantages. All of the advantages are based on the fact that the dealership is a business and thus is more closely regulated by various governments, and it is easier to seek recourse against a business than it is a private seller.


One of the best things about buying from a dealership is that they will handle a lot of the paperwork for you. This includes things like title transfers and taxes on car sales which vary state to state. Moreover, the dealership will also fill out loan forms for you, so you can get a Wells Fargo used car loan without ever stepping foot into a Wells Fargo branch.


Paperwork isn’t the only way that dealerships can help with used car loans. Average used car loan interest rate is lower when working with a dealership than a private party because the dealership does regular business with the bank. For example, Wells Fargo used car loan rates will almost always be cheaper for a dealership than for a private sale. Also, a dealership can accept your old car as part of a trade in, and take its value off of your final loan value, which can reduce your monthly payments and shows the lender that you are less of a risk, lowering your rates when compared to used car loans private party.

Dealer or Private Seller? Where to get your Used Car


Used car dealerships are also generally more reliable than private sellers because selling used cars is the basis of their business, whereas a private individual may not sell another car for ten years. As a result, dealerships have a greater incentive to ensure that you get the best deal possible, whereas a private individual has an incentive to make sure they get the best deal possible.

Private Sellers

This is not to say that there is no benefit to buying from a private party. Because they are not business, private parties are more flexible than dealerships on a number of key areas. This flexibility has a number of advantages:

Payment Method

Private parties can choose how they accept payment, that means they can accept a used car loan private party, or they can take cash, check, bitcoin, or even trade the car for labor. This is a level of flexibility that dealerships can’t offer.


Dealerships have to go through a number of steps to sell you a used car. This adds up to a lot of time spent waiting while various sales people talk to different managers. The result is lost time for you. Private sellers lack this bureaucracy, and so the sales process can be faster.


Dealerships have a lot of overhead; they have to pay salaries and lease or own property, building costs, and other expenses. As a result, private sellers are usually cheaper than dealerships for comparable cars. This is an important distinction if you’re looking for a used car on a budget!

As you can see, there are a benefits to using dealerships and private sellers. Understanding the different benefits will help you pick the used car vendor that’s best for you.