Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

Are you wondering if it’s better to buy a car from a private car seller instead of a dealership? Unfortunately, there’s no black-and-white answer. Whether you’re better off buying from a private car seller or not depends on a number of factors including whether you want to buy a new or used car

Each has its own merits, let’s look at some of the pros and cons, as well as the steps to take to ensure your private car purchasing experience is the best it can possibly be.

Private Car Seller Vs Dealer

Once you’ve decided on buying used versus new, you have another decision to make: buying from a private seller or car dealer. The process of buying a car from each source differs, so you’ll want to consider both before choosing which route to take.

What Is A Private Car Seller? 

A private car seller is someone who is selling a vehicle that they’ve owned and used themselves. They may advertise their vehicle for sale on a variety of platforms, including websites such as and Kijiji. The entire transaction is conducted privately without the involvement of a dealer or financial institution. 

For the most part, you’ll need to pay for the vehicle in full. If you want to finance the car, you can take out a personal loan and pay the seller with the money you receive from the loan. Then, you’ll pay the personal loan off in regular installments.   

What Is A Car Dealer?

A car dealer is a business that sells new and used vehicles. Some work exclusively with a specific car brand and have a dealership contract with the automaker, while others may offer a variety of used vehicles from various manufacturers. 

Car dealers may also sell car parts to car owners looking to replace parts with new ones that are made specifically for their car make and model. They often offer mechanic services as well. Many dealerships also offer in-house financing.

Buying A Car From A Dealership Vs. On The Private Car Seller Market

Whether you decide to buy from a private car seller or a car dealer, there are perks and drawbacks for each that you should consider before making a purchase.

From The Dealership 

While you may pay a little more for a used car from a dealership, you’ll have the benefit of knowing that the vehicle is certified before you buy it. Car dealers add vehicles to their inventory after ensuring that they have been inspected by a mechanic and can pass certain tests. 

In this way, you have confidence knowing that you’re buying a certified pre-owned vehicle that has a lesser chance of turning out to be a lemon. The dealer may also provide you with other useful information about the car, such as a record of previous ownership, repairs, and accidents the car has been involved in. These vehicles may also come with some level of warranty, which covers the cost of manufacturing defects.

On The Private Car Seller Market

One of the biggest benefits of buying from a private seller is that they typically come with a lower price tag compared to cars sold at a dealership. Buying used already means you’re saving money compared to buying new, but you may be able to save even more money by buying from a private seller. 

Another perk is that you know who has used the vehicle before you buy it. Unless another individual owned the vehicle before the current seller. 

On the downside, you’ll need to take it upon yourself to do all the testing and inspections before buying. You should also consider taking the car in for a pre-purchase inspection before committing to a purchase.

Benefits Of Buying From A Private Car Seller

Let’s take a close look at a few different reasons why purchasing a used car from a private seller is a good idea.

Private Sales Are Often Cheaper

Buying a car can be a very expensive purchase, so it is generally a good idea to try and save money wherever you can. One of the best things about buying from a private seller is that generally, it will be cheaper than buying a used car from a car lot.

At their core, dealerships are about making money and with all of the expenses they incur, they try to pass those costs onto potential buyers. On the other hand, private sellers are usually just trying to get rid of their car and since they have no expenses like advertising, they can afford to sell to you for cheaper.

Private Car Sellers Are More Open To Negotiation

Because of the aforementioned expenses that a car dealership will incur, they often are not willing to negotiate very much at all. They have a number that they know they need to remain above to earn a profit and will likely be unwilling to go under that. 

However, private sellers are usually willing to negotiate. Many of them simply want to sell their car quickly and are generally willing to settle for less in order to make the sale. 

They Should Know The Full History Of The Vehicle

If the seller bought the car new, they’ll know more about a vehicle’s history than a dealership. In the sales to the dealer, some details or important parts of a car’s history can be missed. While there are indeed paid services that can educate you about the history of a vehicle, it is generally a good idea (and cheaper) to get it from the source. 

There Are No Games

One of the worst parts about buying a car from a lot is the experience. It is a long and somewhat annoying process, in which a lot of games are being played. Not only are dealership salesmen very pushy most of the time, but they have a variety of different sales tactics that can feel quite predatory. 

Also, the dealership experience feels more like a back-and-forth game that will have a winner and loser than an actual fair transaction between two interested parties.

Risks Of Buying From A Private Car Seller

While there are a lot of great things about buying a car from a private seller, there are also a few things to watch out for.

No Warranties Or Guarantees

Dealerships have some rules and regulations to follow when selling vehicles and most of them will offer some sort of warranty or other special deals. Most of the time, a private seller will not offer anything like this and it will be a cash transaction. When buying from a private seller, it is up to you to do all the inspections and make sure everything about the car is in order.

Meeting With Strangers

Another concern is that you will likely meet with a lot of strangers in your search for a vehicle. Not only can this be time-consuming, but meeting strangers can potentially be dangerous and most car scams take place in the private sales market. With a dealership, you can usually trust the salesmen and staff.

Financing Concerns

Perhaps the biggest concern about buying privately is that there are fairly limited financing options. Most private sellers will want to be paid in cash or through a certified cheque

That is a problem for most people,  as few of us have thousands of dollars lying around to purchase a car. While you cannot get financing through the seller like you can at a dealership, there are some financing options available for you.

Financing A Privately Purchased Car

There are a few ways you can finance a private car sale. You can’t opt for either a car loan or a personal loan to finance your purchase. However, in order to reduce the amount of car loan debt you take on, it’s best to find a low cost loan. 

To get the best rates on a car loan, you need to ensure your finances are in good shape. This includes your income, debt-to-income ratio and your credit score. If you don’t know what your credit score is, you can check it out for free using Loans Canada Compare Hub

Once you know where you stand financially, you can take steps to ensure you meet the lender’s requirements.

Steps To Buy From A Private Car Seller

Now that you know about the pros and cons of buying a vehicle privately, as well as financing options available to you, what are the steps you need to take to buy from a used seller?

  1. Research – The first thing to do is research. You should look at websites like Kijiji and Craigslist to see what sort of vehicles you want to purchase. Look at not only what you need now, but also what you may need in the future.
  2. Set A Meeting – After searching through the sites, have a couple of front-runners. Reach out to the owners to see if you can set up a meeting to view the car and have a conversation with the owner.
  3. Inspect The Car – At the meeting, you should check the car (inside and out) and take it for a test drive. Be sure to ask them anything you want about the car, such as the vehicle’s history, past repairs, and such. It’s a good plan to use a car history report service to ensure that the seller is telling the truth. You should also take it to a trusted mechanic for an inspection, just to make sure it is a good one.
  4. Negotiate – Once you know you like the car and want to purchase it, it is time to negotiate on a price.
  5. Buy The Car – When a price is set and you have the cash or financing option taken care of, it’s time to gather all the necessary documents (such as the bill of sale) and make the official transfer. Once the vehicle is registered to you, it is officially yours and the process is completed.

Documentation For Buying From A Private Car Seller

All vehicles in Canada must be registered in their respective provinces to be legally permitted to operate on the road. You’ll need to carry proof of registration in your province when driving, as you’ll be asked to present this paperwork if you’re ever pulled over by the police.

When you buy a used vehicle from a car dealer, it may be easier to obtain all the necessary documents, as dealers will typically provide everything you need to register your car. But when you’re buying from a private seller, you’ll need to know exactly what documents are required to register the vehicle with your province.

The following are documents you should request when purchasing a vehicle from a private car seller:

Car title. The title of the vehicle will tell you who the lawful owner of the car is. It will also tell you if there are any liens on title held by third parties, as mentioned. 

Bill of sale. This document will identify the following:

  • VIN
  • Year, make and model
  • Sale price
  • Sale date
  • Seller’s name and contact information
  • Indication of guarantees on the vehicle (ie. “sold as is”)

Used vehicle information package (UVIP). As mentioned, used car sellers are required to provide this package to buyers, which includes important information about the vehicle. 

Original vehicle permit. Ask the seller for the vehicle portion of the original owner’s permit when buying a used vehicle. 

Tips On Buying A Car From A Private Car Seller

There are some risks associated with buying a used vehicle. But there are also some added risks to buying from a private seller. Before you buy privately, consider these tips to protect yourself. 

  • Review the vehicle information package. Car sellers are required to provide buyers with a used vehicle information package (UVIP) when selling a used car. Take the time to read through this package and make sure the information provided in the document matches the vehicle you’re purchasing. 
  • Check out the history of the vehicle. While sellers are legally required to provide a UVIP to buyers when selling second-hand cars, you might want to buy your own vehicle history report. These reports detail any previous accidents the car was involved in and any unrepaired recalls. You can get this report from  
  • Find out if there are any liens on the car title. If there’s a lien registered against the title of the car you’re looking to buy, that means a third party has an interest in the vehicle, such as a bank. It’s helpful to check for outstanding liens, or else you could be on the hook to pay off the outstanding debt.
  • Check out the VIN. Car theft is on the rise, and one thing that thieves are doing is placing a fake VIN on the dashboard of a stolen vehicle to make it look like the vehicle is legitimate. Then, the car is sold to an unsuspecting customer with the false VIN. The police may confiscate the vehicle given the fact that it’s stolen, leaving you without a car and without the money you spent to purchase it.

Bottom Line

Buying a car from a private seller is generally a good idea. It can be cheaper and sometimes less stressful. However, you need to consider the potential drawbacks of privately purchasing a used vehicle, such as the lack of warranties and concerns with financing.

Private Car Seller FAQs

What type of information does a seller have to have to sell their car in Ontario?
According to, selling a used car in Ontario requires that you have certain paperwork. According to an article from you’ll need the car’s Safety Standards Certificate and the ownership permit. Of course, there is also the used vehicle information package (UVIP).

What if the private seller doesn’t have a title?

You need a car title to buy or sell a vehicle, as it establishes car ownership. If a private seller doesn’t have the car title, you won’t know if the seller actually owns the vehicle. As such, you’d be taking a risk. In this case, ask the seller to go to their nearest provincial service center to obtain it.

Should you get a pre-purchase inspection?

You don’t need a pre-purchase inspection, but it will give you more information about the condition of the vehicle. You can ask the seller to have the vehicle inspected by an experienced mechanic before you agree to buy it. While these inspections are commonplace when buying a used car from a dealership, they’re not as common with private sellers.

How do you register your car?

When you buy a car, you need to register your vehicle with your provincial government, as mentioned. To do so, you’ll need to provide the following documents:
  • Your driver’s license 
  • Proof of identity 
  • Used vehicle information package (UVIP)
  • Car title
  • Proof of purchase
  • Proof of car insurance 
  • Original vehicle permit 
  • Plate portion of the permit (if you have a license plate already)

Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

More From This Author

Special Offers

More From Our Experts
Canada Fed Deposit: Payment Dates And Eligibility 2023

By Corrina Murdoch
Published on September 20, 2023

The Canada Fed Deposit or EFT Credit Canada appears on a bank statement. It happens when the federal government pays the CCB, CWB and
The Best Paying Jobs With The Government: No Degree Required

By Lisa Rennie

Are you looking for a high paying job but don't have a degree? Check out the CBSA salary and other government jobs.
Neo Credit | Neo Financial Credit Card Review

By Corrina Murdoch

The Neo Financial Credit Card makes both spending and saving rewarding for Canadian consumers, regardless of their financial health.
Alternative Mortgage Financing In 2023

By Bryan Daly

Alternative lenders can provide all Canadians with the opportunity to become homeowners, keep reading to learn how they can help you too.
Home Equity Line Of Credit vs. Private Second Mortgage

By Lisa Rennie

If you're a homeowner needing a loan, consider tapping into your home equity. Even with bad credit, you can get a private second mortgage.
Find Out How You Can Get Free Legal Advice With Pro Bono Ontario

By Lisa Rennie

Lawyers aren't cheap, and many Canadians aren't able to afford their services. Check out Pro Bono Ontario for free legal guidance.
Can You Get Jobs That Pay Cash In Canada?

By Savanna Craig

Whether you're looking for jobs that pay cash or have a job that pays cash, it's important to understand your rights and obligations.
Best Credit Cards To Build Credit 2023

By Lisa Rennie

The top credit building credit cards available to Canadian consumers looking to improve their credit score.

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Expert Tips
And Advice

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card