Buying a car privately: Pros & Cons

When you buy a car through a private sale, you’re buying directly from the owner of the vehicle instead of a third-party dealership. This means you’re doing business with an individual instead of a company. This car-buying method has pros and cons. If you’re thinking of purchasing a car through private sale, here are some things you need to know: 

Buying a car from a private seller 

The process of buying a car from a private seller is slightly different from purchasing through a dealership. The key difference is that you have to do everything yourself, from checking all the documents to having the car inspected. 

Below are some important reminders to keep in mind when buying a used car privately: 

• Make sure the car isn’t stolen or has finance owed. Look up the vehicle identification number (VIN), registration, and engine number to see if it matches the car’s description. Check the national database to ensure that the car hasn’t been reported stolen. You should also see if there’s still finance owed on the car by going to the Personal Property Securities Register (PPSR) online. 

• Conduct a pre-purchase inspection. A pre-purchase inspection is especially important when buying a used vehicle. You never know the true condition of a car until a mechanic has taken a look at it. It may run fine when you’re test driving it, but there could be underlying issues that even the seller may not know about. 

• Gather all the necessary paperwork. Get all the documents you need to transfer ownership from the previous owner to you. The requirements may differ depending on your state or territory, so it’s best to review them beforehand. 

Advantages of buying a car from a private seller 

There are plenty of positives to buying directly from the seller instead of going to a dealership. Here are some benefits of buying a car privately: 

You could get a better deal 

Privately sold cars often cost less compared to similar vehicles found in dealerships. This is because dealerships typically have a lot of associated costs that are then transferred to the buyer like advertising costs and the seller’s commission. When you purchase a car privately, all the funds go to the seller directly. 

More amenable to negotiate 

 If the seller is eager to part ways with their car, they could be more open to negotiating for a lower price. Some sellers just want someone to take their used car off their hands so they can upgrade their vehicle. 

There are more options to choose from 

When you buy from a dealership, you’re limited to only what they have in stock. And if you already have a make and model in mind, it’s much easier and quicker to find listings for that specific car than visit different dealerships hoping to find it. 

There’s less pressure 

Those who would like a more laid-back experience often opt for buying through private sales. You’re unlikely to feel overwhelmed or pressured into a sale like you would in a dealership. You also are less likely to encounter sellers using aggressive sales tactics that could make the whole situation more stressful. 

You can close the deal sooner 

Private sales can be finalised more quickly if you have all the paperwork and funds ready. All that really needs to be done is to transfer the funds to the seller and the ownership to you, and you’re good to go. 

Disadvantages of buying a car from a private seller 

There are also several possible downsides to buying a car from a private seller. Make sure you’re aware of all the potential pitfalls of buying privately when purchasing a used car: 

You're not entitled to certain consumer protections 

Because you’re buying privately and not from a dealership, you’re not entitled to a cooling-off period or warranties. This means that if you change your mind later on, you won’t be able to return the car. And without any warranties, if there’s something wrong with the vehicle, the seller is not obliged to provide repairs. 

You must verify information about the car 

Dealerships usually do all the verifications to ensure that the car wasn’t stolen and doesn’t have any finance owed. However, if you buy privately, this job falls on you. As the buyer, you have to do all the due diligence to ensure that everything about the vehicle is above board. 

You have to do all of the paperwork 

Doing the paperwork and documentation becomes your responsibility. When you buy from a dealership, they usually take care of all the paperwork associated with the purchase. Instead of signing a few forms, you have to file the paperwork and figure out the requirements yourself. 

Car loans for private sale purchases 

You can still get a car loan even when buying from a private seller. The lending process is quite simple; once your loan is approved, the lender will transfer the needed funds to the private seller so you can finalise the purchase. After everything is said and done, you’ll start paying off your used car loan with the agreed upon terms. 

If you want to learn more about your used car loan options, call 13 10 90 to talk to our friendly lending specialists! You can also apply online. 

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