Advantages and Disadvantages of Buying Your Car Privately Versus Through A Dealer

The car seller passes the key to the man

04 Dec Advantages and Disadvantages of Buying Your Car Privately Versus Through A Dealer

When you’re looking to buy a car, there are a number of decisions you’ll need to make. The type of vehicle you want and how much you have to spend are just two of those decisions.

You’ll also need to choose who you plan to buy your vehicle from: a private seller versus a car dealer. To help you decide, here are the pros and cons to buying a car privately versus through a dealer.

Buying a car privately

There are many advantages and disadvantages to buying a private sale vehicle, meaning the best choice depends on what’s important to you. To help you decide whether or not this option could work for you, here are some of the pros and cons of buying a car from a private seller.


  • Because the seller doesn’t have any overheads like a car dealer, buying a car privately is         often cheaper.
  • If the seller is in a hurry to sell because they’re going overseas or buying a new car, you         may be able to negotiate a better price.
  • The seller may have chosen to sell privately to get a better price than they would with a       trade-in. These cars are typically well-maintained and regularly serviced so you can go           through the service records and check any issues that may have occurred over the life of         the vehicle.



  • There is no warranty so any repairs that need to be done once you’ve purchased the                vehicle will be your responsibility.
  • There are no guarantees when you buy a vehicle privately, so you’ll need to check the              vehicle isn’t stolen, there is no debt owing on it, it’s not written off, it’s registered and             has an up-to-date WOF.
  • There is no cooling off period if you change your mind – once you hand over the money,          the car is yours and there’s no backing out.
  • You and the seller will need to handle all of the paperwork including the transfer of                registration and ownership.


Buying a car through a dealer

Choosing to buy from a car dealer can take the pressure off you, as the dealer handles all of the vehicle checks and paperwork. This is just a glimmer of what to expect. To help you make an informed decision that suits your situation, we’ve outlined the pros and cons associated with buying your vehicle through a dealer.


  • It’s easy to review car dealers online before you visit their showroom – helping you                 separate the bad dealers from those who are reputable.
  • You may get a warranty or guarantee when you buy from a dealer – or the dealer may             offer an extended warranty at an extra cost – so you can buy with confidence knowing           that if something goes wrong when you leave the showroom, you’ll have some recourse         for some time after your purchase.
  • You may be able to trade in your old car as a down payment for your next car, reducing            the amount you have to pay and saving you the hassle of having to sell before you buy.
  • All of the paperwork is done for you.



  • Prices at car dealerships are typically higher than through private sellers to cover the             cost of their overheads.
  • Some dealers will encourage you to secure finance through their preferred finance                 provider as they earn a commission for any referrals. Unfortunately, this may not be the           best finance deal for you. To find the best interest rate and loan term, it’s recommended          to shop around and carefully weigh up your options. However, just keep in mind that               applying multiple times could lower your credit score and make you an unattractive loan       candidate. At Max Loans, we are committed to your long-term financial wellness and we         care about your credit score just as you do. With access to a wide range of lenders on our       panel and intimate knowledge of loan products in NZ, we make it easy to compare and           find the best car loan that suits your individual needs and circumstances, without                   negative strikes against your credit score.
  • While a trade-in is convenient, you may not get the best price for your old car.


An excellent option for car finance

Whether you choose to buy from a private seller or through a car dealer, we at Max Loans would like to help you get a great car loan to put you in the driver’s seat. Even if you haven’t decided where to buy, we can still help you with a pre-approved car loan. A pre-approval offer is a conditional approval showing one of our lenders is happy to lend you up to a certain amount of money. One of great benefits of getting a pre-approval is that it gives you a clear idea of how much you can spend on a car so you can budget realistically. On top of that, it also provides you with the freedom to choose where you buy your car and puts you in a better position to negotiate the price!

Interest rates for car finance with Max Loans are competitive and fixed which means no surprises and you know exactly how much you have to repay. You can also extend your car loan term up to 7 years to bring down your repayments and make it more affordable for you to buy your dream car.

To provide you with peace of mind and financial protection, we can also help arrange Mechanical Breakdown Insurance on the vehicle, no matter it’s purchased privately or through a dealer. Our premiums are competitive and can be added to your loan, so you don’t have to front up with the cash. Not the type of car insurance you are looking for? No worries! With access to a wide range of insurance providers, our Max Insurances team can tailor your car insurance to suit your individual needs.  Get in touch with our team today to find out more.

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This publication should not be deemed as financial advice. While all care has been taken in the preparation of this publication by the writer, Max Loans and the writer give no warranty as to the accuracy of this publication and whether the information contained within it is appropriate for your individual circumstances. No responsibility is taken by Max Loans or the writer for any errors or omissions in this publication. You should seek specific financial advice appropriate to your individual circumstances before acquiring or disposing a financial product.