Why You Should Consider Buying a Car From a Private Seller

Why You Should Consider Buying a Car From a Private Seller

Written by Kale Havervold
Fact-checked by Caitlin Wood
Last Updated October 14, 2020

Buying a vehicle is a serious financial decision for anyone and is something people should not take lightly. A lot of research and time should go into deciding not only what car to get, but also how to get it. There are a number of different ways to get a vehicle. From buying new, buying used, to leasing, and more.

What’s the difference between leasing a car and buying it? Find out here.  

Generally, purchasing a used car is a sound financial choice, but even then, there are still some big choices to be made. One of the biggest is to choose whether you will purchase the car from a dealership or from a private seller.

Each has their own merits, but this article, in particular, will be focused on purchasing a used car from a private seller. We will look at some pros and cons, as well as the steps to take to ensure your private car purchasing experience is the best it can possibly be.

Check out our infographic about buying new vs. used cars.

Why You Should Buy a Car From a Private Seller

First, let’s take a close look at a couple 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 their expenses they incur, they need 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.

Want to know how much car you can realistically afford? Check this out.

Much More Negotiation Room

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 want a car gone quickly, and are generally willing to settle for less in order to get the car purchased. While you still need to be realistic and not insult countless people with lowball offers, there is definitely more negotiation room when purchasing a vehicle from a private seller.

They Should Know the Full History of the Vehicle

This will depend on how long the seller has had the vehicle, but a lot of the time, a private seller will 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 go missed and be forgotten forever.

Click here to learn how to check the history of a used car.

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. Also, if the seller is a serious car person, they will know how to sell privately. They will often get more, as dealership trade-in value is quite low. Serious car people are known for keeping meticulous records, so you can feel comfortable knowing they likely know all of the ins and outs of the vehicle.

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 salesman 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.

Buying used? Here are 10 things to know.

Why You Shouldn’t Buy a Car From a Private Seller

So, 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 money-back guarantees or other special deals. Most of the time, a private seller will not offer anything like this and it will be a straight-up cash for a car 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.

Do you have car loan debt? Click here for some solutions.

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 (as you will need to organize various meetings), but meeting strangers can potentially be dangerous and most car scams take place in the private sales market. While most interactions will be completely fine and positive, you really never know who you’re meeting. With a dealership, you can usually trust that the salesmen and team on staff are trained and aren’t the type of people to worry about.

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 a certified cheque and won’t offer financing options. 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.

Look here to know about financing a used car in Canada.  

Financing a Privately Purchased Car

Of course, there is always the option of going through a bank to get a vehicle loan, but they can often have quite a few stringent rules and requirements you need to follow. As a result, many people have turned to local lenders and online lenders (like Loans Canada) to help them finance a private used car sale. This is often a much easier, more convenient way to get a vehicle, as opposed to depleting your savings account to get a car.

Is your car loan more expensive than your car is actually worth? Click here.

Steps of Buying a Car From a Used 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. 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. 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. 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. Once you know you like the car and want to purchase it, it is time to negotiate on a price.
  5. 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.
  6. Once the vehicle is registered to you, it is officially yours and the process is completed.

Buying car from a private seller is generally a good idea as 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. We hope this article has helped you make an informed decision, while also helping you understand the process involved with buying a used car from a private seller.

Do you have bad credit? Read this to learn how you can get a car loan.  

In The Market For Private Sale Auto Financing?

Loans Canada can help. Simply fill out our quick and easy application and you’ll be on your way to getting the financing you need to purchase the vehicle you want.

Rating of 5/5 based on 2 votes.

In his over six-year career as a professional writer, Kale has focused on writing about finance, technology, cryptocurrency, entertainment, and sports. Kale's work has been published on Yahoo, RentHop, the Regina Leader-Post, LoansCanada.ca, and ReboundFinance.com. Kale loves to create a wide variety of personal finance-related content. Including everything from how-to guides to featured articles, to advice pieces and everything in between. Whether he’s writing about the newest piece of technology or providing tips to help people with their finances, Kale is passionate about educating Canadian consumers and making sure they have the information they need to make the best decisions.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Save With Loans Canada

Special Offers

Up to $1,500 Cash Back

Up to $1,500 Cash Back
Mortgage offer

Frank Mortgage is Canada’s one-stop shop for mortgages. Get up to $1,500 cash back on your mortgage.

View Offer
Improve Your Credit With Fidem

Improve Your Credit With Fidem

Great unsecured credit card for customers currently in, or recently discharged from, a consumer proposal or bankruptcy

View Offer
Earn 5% Cashback With Neo

Earn 5% Cashback With Neo
No annual fee!

Earn an average 5%¹ cashback at thousands of partners and at least 0.5%² cashback guaranteed with Neo.

View Offer
Build Credit For $10/Month

Build Credit For $10/Month

KOHO’s Credit Building Program helps you build a better credit history with easy to manage payments for just $10/month.

View Offer
Best Personal Loan Provider by Greedy Rates

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Build Credit For Just $10/Month

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