Where To Buy A Used Car? Comparing Private Car Sellers Vs. Dealers

6 min read By Kia Navarro on October 14, 2019

A car comes with serious costs. Aside from the unit price of the car itself, you have to think about other expenses like gas, maintenance, insurance, and more.

That is why some people would rather buy a secondhand car instead of a new one. It just depends on where you buy it, and the car details you are looking for.

In the Philippines, there are two ways you can buy a secondhand car. The first option is through a private seller, and the second is through a car dealer. The question is—which is better?

Is it wise to buy a secondhand car?

Buying a secondhand car isn’t that bad. To be honest, it might be a great financial decision; especially for those who are on a tight budget.

Buying a brand-new car has a ton of perks. The warranty that is provided by the manufacturer, freebies, mileage, ownership, peace of mind, and of course, that new car smell. The problem usually comes down to the price tag.

The bottom line always comes down to price and budget. Buying secondhand often turns out to be the better option.

(Read: 6 Important Things To Check When Buying A Second-hand Car)

Pros of buying a secondhand car

• More affordable than brand new cars by 10% to 50% of its original price
• In some used cars, their original warranty is still up to date. This means you can ask the manufacturer to provide technicians that will repair the vehicle with good quality parts.
• Some insurance companies give rates that are relatively lower for secondhand cars than they would if you were trying to insure a brand-new car. It depends on the vehicle and the insurance company. If the car is damaged and looks like it’s in need of constant repair, your chances of getting approved are slim. Also, after a certain number of years, most car insurance companies will not insure an old car.

(Read: The Advantages Of Buying A Brand-New Vs. Secondhand Car)

Private seller vs. dealer

A car dealer or car dealership sells vehicles based on a dealership contract with an automaker or the sales subsidiary. A car dealer can sell either brand-new, or secondhand vehicles.

A private seller, on the other hand, is an individual who sells a vehicle, but is not engaged to a business that makes money from selling cars.

1. Car quality

Car dealer

If it is your first time buying a secondhand car and you absolutely have no idea on the important parts that should be working, then the best option is to go to a car dealer.

One of the perks of buying a secondhand car from a car dealer is that business laws state that these dealers are not allowed to sell cars that are unacceptable to customer standards. You can be sure that you are buying a vehicle that is up to par.

Private seller

Compared to buying a secondhand car from a dealer, buying one from a private seller is a bit risky. Since private sellers are not bound by the same business laws, some of them will not tell you that the vehicle you are about to buy is a total wreck.

There are thousands of stories online wherein the buyer was not well informed about the details of the car they are buying, and they ended up paying more than they should have for a car that is not working as well as it should.

When buying from a private seller, you must do your research. Make sure you know the specifications of the car model you are looking to buy. You may also hire a professional car inspector to make sure you are buying your money’s worth.

2. Car history

Car dealer

As car dealers go through hundreds to thousands of cars every year, they can’t really know everything about the cars they are selling.

Some car dealers would not be able to tell you about the car’s limits or even “bad habits” (overheating, breaking down when used too long, etc).

Private seller

Since the seller has owned and driven the vehicle, they know all the ins and outs of the vehicle and can tell you about it. They will be able to give you the exact answers to your questions that can only be answered if you have gone through the experience.

3. Purchase price

Car dealer

In reality, buying a used car from a car dealer can be a bit more expensive than buying from a private seller. Why, you ask? Because as said earlier, car dealers make money from the vehicle being sold.

Private seller

Purchasing from a private seller, on the other hand, is a totally different story. Private used car sales are always cheaper than the used cars under car dealers. Most of the time, private seller transactions are very straightforward: the seller just needs to sell their old car to buy a new one, or pay for other expenses. As such, they may not be too concerned about maximizing profit. They just really need the money.

Which car should I buy?

The common question buyers ask is, “How to buy a secondhand car?” There are a lot of secondhand cars out there, which one should you get?

Here are a few things you should keep in mind when you are purchasing a secondhand car:

1. Mileage

When you are choosing which car to buy, remember that when the car has a high mileage point, the car is definitely old. And since the car is old, there is a huge chance that you will spend a bit more to repair and replace some of its parts.

If the vehicle you want to buy has a mileage of more than 60,000, you might want to think twice. Some of its parts might be worn out and would require replacement.

2. Market value

Some car sellers would always sell their vehicles higher than the original price. If you did not do your research and you fell for the trap, it would be as if you just bought a brand-new car!

Do thorough research about the car’s price so you have an idea how much you should be spending. This will also greatly help you with budgeting!

(Read: Should You Buy A Car With An ‘Assume Balance’ Scheme?)

3. Inspect the vehicle

Do not just rely on photos or what the seller says; make sure you have thoroughly inspected the car.

Are the seats in good condition? Do the doors close properly? Are there scratches the seller did not tell you about? Are the signals working fine?

These are just a few of the tiny details you need to consider when you are about to spend your hard-earned cash on a second-hand vehicle.

4. Test drive

Test driving the car does not only mean that you are checking if the car is comfortable, or if you like it. You have to check if the brakes are in good condition. Check also if the power steering is working. Don’t forget to pay close attention to the sound of the engine.

Summary

We have to say that, buying a secondhand car from a car dealer is safer since you are protected by business law. We cannot deny the fact that there will always be sellers who will double-cross you and only have themselves in mind.

However, if you can find a private seller you can trust—maybe someone you know, or a trusted recommendation—you could have a better negotiating power. And for as long as they are honest about the car’s history, you could get a bargain that’s a little less than perfect, but still workable. The choice is ultimately up to you.