Car Buying

Buying a Car: Why Are Private-Seller Prices Lower Than Dealer Prices?

RELATED INVENTORY
Saving this vehicle to yourMy Autotrader account
Are you sure you want to delete?
Used 2011 Buick Lucerne CXL
Used 2011 Buick Lucerne
$9,734
RELATED READING
See all Buick Lucerne articles
RESEARCH BY MAKE
Toyota cars, trucks and SUVs Ford cars, trucks and SUVs Honda cars, trucks and SUVs Chevrolet cars, trucks and SUVs Jeep cars, trucks and SUVs Nissan cars, trucks and SUVs Lexus cars, trucks and SUVs Volkswagen cars, trucks and SUVs Buick cars, trucks and SUVs
Acura cars, trucks and SUVs Alfa Romeo cars, trucks and SUVs AMC cars, trucks and SUVs Aston Martin cars, trucks and SUVs Audi cars, trucks and SUVs Bentley cars, trucks and SUVs BMW cars, trucks and SUVs Bugatti cars, trucks and SUVs Buick cars, trucks and SUVs Cadillac cars, trucks and SUVs Chevrolet cars, trucks and SUVs Chrysler cars, trucks and SUVs Daewoo cars, trucks and SUVs Datsun cars, trucks and SUVs DeLorean cars, trucks and SUVs Dodge cars, trucks and SUVs Eagle cars, trucks and SUVs Ferrari cars, trucks and SUVs FIAT cars, trucks and SUVs Fisker cars, trucks and SUVs Ford cars, trucks and SUVs Freightliner cars, trucks and SUVs Genesis cars, trucks and SUVs Geo cars, trucks and SUVs GMC cars, trucks and SUVs Honda cars, trucks and SUVs HUMMER cars, trucks and SUVs Hyundai cars, trucks and SUVs INFINITI cars, trucks and SUVs Isuzu cars, trucks and SUVs Jaguar cars, trucks and SUVs Jeep cars, trucks and SUVs Kia cars, trucks and SUVs Lamborghini cars, trucks and SUVs Land Rover cars, trucks and SUVs Lexus cars, trucks and SUVs Lincoln cars, trucks and SUVs Lotus cars, trucks and SUVs Maserati cars, trucks and SUVs Maybach cars, trucks and SUVs Mazda cars, trucks and SUVs McLaren cars, trucks and SUVs Mercedes-Benz cars, trucks and SUVs Mercury cars, trucks and SUVs MINI cars, trucks and SUVs Mitsubishi cars, trucks and SUVs Nissan cars, trucks and SUVs Oldsmobile cars, trucks and SUVs Plymouth cars, trucks and SUVs Pontiac cars, trucks and SUVs Porsche cars, trucks and SUVs RAM cars, trucks and SUVs Rolls-Royce cars, trucks and SUVs Saab cars, trucks and SUVs Saturn cars, trucks and SUVs Scion cars, trucks and SUVs smart cars, trucks and SUVs SRT cars, trucks and SUVs Subaru cars, trucks and SUVs Suzuki cars, trucks and SUVs Tesla cars, trucks and SUVs Toyota cars, trucks and SUVs Volkswagen cars, trucks and SUVs Volvo cars, trucks and SUVs Yugo cars, trucks and SUVs
RESEARCH BY STYLE
AWD/4WD
Commercial
Convertible
Coupe
Hatchback
Hybrid/Electric
Luxury
Sedan
SUV/Crossover
Truck
Van/Minivan
Wagon
ADDITIONAL MODEL INFORMATION

author photo by Doug DeMuro December 2016

If you're interested in buying a car and have spent some time browsing used-car listings, you've probably noticed that there's a disparity between pricing at a dealer and pricing with a private seller. That's usually true, but why is it? We've outlined a few reasons why dealer prices tend to be a little higher than private-seller prices.

Condition

One major reason why some cars are priced higher at dealerships than with private sellers is that in many cases, dealerships improve the condition of a vehicle once it arrives. That curbed wheel you've forgotten about? That cracked windshield? The gas gauge that no longer functions? In many cases, a dealership will fix these items before offering a car for sale, while a private seller will simply try to sell a vehicle in its current condition.

The fact that many dealers spend money to recondition a vehicle before offering it for sale is one major reason why dealer pricing is often higher than private-seller pricing. But it's also a reason why dealer cars are usually in better condition.

Financing

Financing is another reason why dealerships often charge more for their vehicles than private sellers. Many banks refuse to finance a vehicle owned by a private seller, preferring instead to work only with dealerships. Even more importantly, most dealerships offer financing directly, whereas private sellers are almost always unable or unwilling to provide any kind of financing.

The fact that dealerships can offer more and better financing options than private sellers is another reason why dealers tend to charge more, since they offer more convenience and -- for drivers who can't or don't want to pay cash -- an easier way to purchase a vehicle.

Paperwork

Another reason why dealerships charge more than private sellers: paperwork. Although you might not spend much time thinking about it when buying a car, most dealerships take care of a large portion of paperwork for you -- including a title transfer (for used cars), sending documents to the manufacturer (for new cars), emissions testing and even getting license plates at the DMV. When you're dealing with a private seller, you generally have to do these things by yourself, and the decreased hassle is yet another reason why dealer prices are generally a little higher.

RELATED INVENTORY
Saving this vehicle to yourMy Autotrader account
Are you sure you want to delete?
Used 2011 Buick Lucerne CXL
Used 2011 Buick Lucerne
$9,734
This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Buying a Car: Why Are Private-Seller Prices Lower Than Dealer Prices? - Autotrader