Dealerships vs Private Seller for Buying a Used Car

Buying a used car from a private seller is the best way to save money and get the most car for your buck.

Used car dealers charge a middleman spread and other fees. Skip all that and go straight to the source for the best deal. We’ll show you how.

Dealerships charge documentation fees ranging from $50 to over $1,000 for processing the paperwork. Sidestep dealer fees when you buy your next car from a private seller.

The used car dealership business model is built on buying vehicles as cheaply as possible and reselling them for as much as possible. The spread—the difference between what they pay for a car and what they sell it for—is what keeps the lights on. You don’t want to pay extra to keep a dealer in business, do you? We didn’t think so.

Buy from the original owner to cut out the middleman and get more vehicle for your money. Check out our guide to buying a private-party vehicle for step-by-step instructions.

Your local dealerships—all used car dealers in your immediate area—have a finite number of vehicles for sale. Online car-buying websites have far more. You’re much more likely to find the right car at the right price.

PrivateAuto has more private-party cars for sale than any other website. And, we give you the transactional infrastructure to get the deal done—safely, securely, and conveniently. Now, our instant payment solution, combined with our integrated car transport, makes it easy to buy a car long-distance and have it shipped to your door.

When you tap into the private seller market, you’re much more likely to find hidden gems, such as:

In private sales, you have the freedom to negotiate directly with the seller—or move on to a different seller. This level of control is one of the biggest advantages of private-party purchases.

PrivateAuto lets you offer less than the purchase price with our innovative “make an offer” feature. With a couple of clicks in the PrivateAuto app, you’ve sent an offer. No awkward back-and-forth conversations trying to talk the seller down.

The seller can accept your offer, reject it, or counteroffer with the click of a button.

It’s price negotiation, built into our transactional workflow.

Three states—Hawaii, Arizona, and Nevada—give sales tax exemptions for private-party cars (but charge tax on vehicle purchases). If you weren’t already convinced to go private party, this is a pretty big incentive in these states.

Most states have “lemon laws” that protect buyers from getting a bad used car. Unfortunately, these laws apply to retail (i.e., dealership) vehicles. In most states, private-seller cars are sold “as-is,” which means there is little legal recourse if you end up disgruntled with your purchase.

This is one area where a dealership purchase has an edge over a private-party car. Even so, we think the benefits of a private purchase outweigh the risks—so long as you do your research, buy only from verified sellers, examine the vehicle history report, and get a professional pre-purchase inspection (easy to do from your PrivateAuto dashboard with our LemonSquad integration.

Remember those documentation fees we discussed earlier? When you buy a car from a dealer, they handle much of the necessary paperwork—for a price. When you go the private-party route, it’s up to you to handle the paperwork. Don’t worry: it’s not too difficult.

While individual states may vary, you’ll most likely need to handle the following items with your local DMV (or equivalent agency for your state):

1. Title transfer. The seller will sign over the vehicle title to you at the closing, then you’ll complete a title transfer with the DMV. In most states, there’s a fee associated with transferring the title.
2. Sales taxes. unless you live in a tax-free state, you’ll pay sales tax when you register the car. In addition to your state’s sales tax, you may owe a tax to your city, your county, or both.
3. Registration. You’ll register the car in your name and pay a registration fee.
4. License plates. Unless you live in California or Minnesota, you’ll get new license plates and pay the associated fee.

Always consult with your DMV for the most up-to-date processes and procedures for your state and county.

As the world's first automotive transactional marketplace, PrivateAuto delivers end-to-end solutions for every stage of the deal. From first contact to final payment, PrivateAuto ensures your private party purchase is a seamless, secure experience.

Here are some of the benefits:


Found your dream car on Facebook Marketplace, Craigslist, or eBay Motors? Our DealNow feature lets you start a deal on another site and finish it with PrivateAuto. Invite the seller to DealNow via a custom link you'll create, and then enjoy our fast-track deal flow and proprietary infrastructure.

Start your transaction anywhere, finish it with PrivateAuto.