Is It Cheaper to Buy a Car Privately or from a Car Dealership?

It’s the age old question that comes up when you are looking to buy a car. Is it cheaper to buy a car privately? Or Is it cheaper to buy a car from a car dealership? Both options have their advantages and disadvantages and need to be researched and understood prior to starting your search.

Shop for Cars has put together the complete guide on whether it is cheaper to buy private or if it’s cheaper to buy from a car dealership to help you make the most informed decision when looking to buy a car for sale in 2024.

Let’s get into it.

Is it cheaper to buy a car privately?

One of the biggest beliefs that most car buyers have when it comes to buying is thinking that if you buy a car privately it is much cheaper than buying from a car dealership. That is not necessarily true, it all depends on the sellers position.

We are not going to sugarcoat it, buying privately can open your doors to a potential cheaper price but it can also present you cars at market value or even over market value so it is important that you know what is a good price for the car that you are looking to buy.

What are the advantages of buying a car privately?

Lower upfront costs: Typically you can pick up private cars a bit cheaper than what you could get at a car dealership for one primary reason. Private sellers do not have the overheads a car dealership will have!

More Room for Negotiation: Buying a car privately can give you more room for negotiating the price of a car. Like mentioned in the point above, the main reason being is private sellers do not carry the overheads a car dealership does thus allowing them to drop the price further to get a sale.

Less Formal: Buying a car from a dealership is a formal process that takes place in a business location. This could be freighting for some buyers. When you are looking to buy a car privately, all you need to do is attend the best location whether it be the sellers home address or elsewhere to inspect the vehicle etc. a much more relaxed environment.

What are the disadvantages of buying a car privately?

Limited Warranty: The biggest disadvantage of buying a car privately is it is typically bought as is and there is limited to no warranty available. This can be risky because if something happens with the car you will not be covered and will need to cater for the expenses yourself.

No Car Finance options: To buy a car, most people will need access to car finance. The problem with buying a car from a private seller is this is not offered, you will need to arrange your own finance arrangements which could be a time consuming process.

Is it cheaper to buy a car from a car dealership?

Many car buyers may think that it is more expensive to buy a car from a car dealership due to the reasons mentioned above like overhead costs etc. However, it has been found that you can buy some cars cheaper at a dealership than you could privately, you just need to know where to look.

Like we mentioned above, some private sellers will hold out for the highest offer possible. Dealers who are under tight sales deadlines can and often will discount the price of a car in order to get it to sell. By shopping around you can pick up a car cheaper at a dealership than you would buying privately.

What are the advantages of buying a car from a car dealership?

Warranty and Certification: The biggest advantage of buying a car from a car dealership is the protection they offer in the forms of warranty and certification. All car dealers are subject to consumer law and other government laws that are enforced to protect buyers. Buying from a car dealership offers more protection for your money than what you would get buying privately.

Car Loan Options: Like we mentioned earlier, buying a car, most of us need access to car finance or a car loan, dealerships can offer this for you, without you needing to do anything. Many dealership have relationships with different finance providers and brokers who will fight to find you the best and cheapest loan available based on your application.

Sell My Car / Trade-In Opportunities: What are you going to do with your old car when you buy a new one? Are you going to let it sit in the driveway and collect dust or are you going to look to sell your car? Another huge advantage of buying from a car dealership is they offer car trade ins and sell my car options. This is so advantageous as you can offset the cost of your new car buy trading in or selling your current one with the dealer you are looking to buy from.

What are the disadvantages of buying a car from a car dealership?

More pressed location: one of the biggest disadvantages that make many car buyer anxious is the environment of a car dealership. Walking around and looking at different cars with a car dealer could feel overwhelming for some.

Pressure to Upsell: Dealerships will try to upsell different add ons that they offer whether it be car finance, trade ins, warranty options, or others which could inflate the total price that you pay.

Is it cheaper to buy from a car dealership or privately?

There is no one answer to that question. In some instances you can find it cheaper to buy from a car dealership, in other instances you may find it cheaper to buy privately. The key to finding the cheapest price when buying a car is researching both options.

We hope you enjoyed reading this article. To read more articles like this, please visit the Shop for Cars latest news page here.

About Shop for Cars,

Shop for Cars is Australia’s first car dealership-only online classified. Shop for Cars brings you the best quality new and used vehicles from trusted motor dealers Australia wide. Shop for Cars currently has over 12,500 cars listed for sale all from licensed Motor Vehicle Dealers ONLY.

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DISCLAIMER: This is all based on opinion and does not consist of legal or professional advice. Please research and consult with all relevant parties prior to making a buying decision.