There are advantages and disadvantages when purchasing a car from either a dealership or a private owner, according to DMV.org. Perhaps the most distinct difference is that buying an older car from a dealership tends to be more expensive than buying privately, but it has less hassle and risk.
Dealerships usually offer used car warranties, financing options and a larger selection of vehicles to choose from, explains DMV.org. Older cars from a dealership are inspected by certified technicians, and the dealership can be easily contacted if a problem occurs with the vehicle. Dealerships must operate under selling regulations and procedures, which means there are fewer risks for buyers. However, the dealership is a business with the goal of making a profit. Purchasing a used car from a dealership usually means purchasing the vehicle higher than the wholesale price. In addition, consumers must negotiate with a professional sales person who earns a salary mostly from commission.
Private owners do not offer the same warranties, financing options and reliability as dealerships, notes J.D. Power. Browsing older cars from private owners also requires meeting with several different owners. The prices for privately owned vehicles are lower than dealership prices because private sellers usually do not pay for employee wages and commissions; advertising and promotions; and the cost of operation. Private owners also seek to complete the sale as soon as possible, which means transactions are quicker than dealerships and have more room for negotiation.