Does this statement hold up, and why should we not buy from dealers?
Dealers are more expensive
In general this statement is true. Although not every car will be hugely overpriced (you may even be surprised how little the difference can end up being), you will almost always pay more for a used car from a dealer than you would from a private seller. After all, the dealer is a business that has to make a profit on top of their costs, salaries and overheads.
Private sellers are usually more open to haggling and have more room to move on price, especially if they need to make an urgent sale.
However, what people may overlook are all the benefits of everything that a dealer offers and does when presenting used cars for sale.
First of all it’s their administration expertise. Dealers sell cars for a living, so you can leave all the boring paperwork and forms to be handled by them.
Dealers may also offer you finance should you need it, without the hassle of you going out and looking for it yourself. This is an especially useful service, as it can be notoriously hard to get finance for used cars.
Then there are the things that any reputable dealer should do with their used cars for sale, such as conducting thorough inspection of the cars and making any necessary repairs.
They will also clean and detail the cars before putting it out for sale. How often have you gone to an inspection with a private seller and noticed scrunched up used tissues, scraps of food, animal hair, or a strange smell when sitting inside the car.
If you’re still a bit short on cash, one simple way to lower the cost of the car you want is to consider trading in your current car with the dealer (this is almost never an option with private sellers).
And the big one is the laws that a dealer must comply with and statutory warranty it must offer as part of the Motor Vehicle Dealers Act (up to 3 months depending on the age of the car and kilometres travelled at the time of sale). Comforting to know you have, should you end up buying a “lemon”.
Salespeople are pushy
Unfortunately because of the fact that they rely heavily on commissions as part of their income, you will come across salespeople that are more “overzealous” in getting a sale. If you encounter someone like that, be firm, or speak to the sales manager. And if all else fails, just walk away and take your business elsewhere. Good (and more successful) salespeople do exist, and they are trained to listen to what you want and try to act in your best interests.
Private sellers are more honest
Yes, some salespeople may come across as deceptive or dodgy, as they feel pressured to close a sale. However, the dealer has legal obligations such as guaranteeing that every vehicle is free of encumbrances such as finance, isn’t on the written off register, and the odometer is correct.
Private sellers don’t have a sales quota or pressure to make sales, so are less likely to feel the need to lie.
But they still want to get their car sold, usually as soon as possible and for the highest price, so we should always be wary of those tempted to be loose with the truth in order to achieve this.
This is why it’s always recommended to have your own independent inspection and PPSR checks done, especially in a private sale situation.
So we can definitely agree that the price of a used car bought from a dealer is usually more expensive. But once you also consider other factors such as the dealer inspection and repairs, cleaning and detailing, convenience and warranty for peace of mind, which really is the better deal?