Dealer vs. Past Owner: Whom to Come for a Used Car?


Do you like to overpay buying from official dealer? This is the first question used car buyers ask before making any call. And the reason is simple: no one wants to spend a premium without expecting extra value from that. Despite the large competition on a used car market, official dealers selling at higher prices still operate here generating tremendous sums of revenues. Buying from a past owner is riskier and it is up to buyers to pay for this difference or not.

Main benefits of buying from the official dealer:

  1. Buyers get higher access to financing: If someone asks the bank lending money for buying the car without official intermediary, he will get rejection. Only cash works when one negotiates directly with past owners. If one wants to borrow – the only option is buying with the official dealer. Anyway, it doesn’t mean that if buyers have cash at hand, they shouldn’t even consider official dealers.
  2. Lower chances of deception: When you come to an official dealer selling used cars, you will not face cars which are completely destroyed. Although one should still visit services like for checking ownership history and mileage credibility, official dealers are required to provide full information about the vehicle.
  3. Dealer’s reputation saves clients from wrong purchase: Although one shouldn’t forget that dealers are indeed vehicle sellers who like getting rid of all cars in their salon, they have high level of responsibility. Federal and local laws provide strict standards, determining dealers’ behavior. If dealer provides clients with something wrong, it will result in fees and lower number of clients due to reputational shocks.
  4. Lower tax liabilities: Some states require you paying a sales tax from the difference between the price of a new car and buyer’s trade-in. In that case, if you buy from an official dealer, you benefit dramatically. Anyway, you should look at your state legislation as sometimes dealers’ clients are even worse off.
  5. Less time for a search: When drivers buy a used car from a superstore, they don’t spend much time, they simply buy and go. But when buyers look at options from past owners, they can spend weeks or even months searching for a better option. Don’t forget that if you are not satisfied with your choice, you will have to sell it again wasting a lot of time.

Can you Benefit Buying from a Past Owner?

If buyers are risk-averse, they will always choose to buy a car from its official dealer. But if they are willing to take some risks for a reduction in purchase price, they will like to get a vehicle without intermediaries’ help. If you are careful enough and always verify all facts, revealed by the seller, you will find the car which you expected. Think twice if you lack experience in buying cars and don’t hesitate to ask someone driving for a last couple of years. Proficient seller easily detects and gains from buyers’ lack of experience. And if you treat such a purchase carelessly, forget your aim to benefit from the deal.

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