With the emergence of online sales platforms, commerce between private parties has been simplified. The used car market is no exception. Although this presents new opportunities, this type of trade also comes with significant risks. However, buying from a specialist is not perfect either.
To check the condition of a car, it is necessary to test drive it. It is not advisable to rely solely on the seller's promises. Despite a test drive, it is almost impossible to get an overall picture of the vehicle before buying it. In addition, the variety of prices online for different exemplars of the same vehicle can be confusing. Besides mileage, year of production or options, another factor plays a crucial role: the seller.
Types of sellers
There are two main types of sellers, private and professional ones. This difference is important and will greatly influence the risks, but also the buying experience.
Professionals
The term professional in the car business is a broad one. Below is a summary of the different categories:
Manufacturer's subsidiary and branch office The manufacturer of the vehicle sells it directly through its own network. There is no intermediary between the manufacturer and the buyer.
Specialist dealer The specialist dealer is an independent seller who has obtained the right to represent a brand and sell its products. The dealer buys the cars from the producer and then resells them. Therefore, he bears the risk.
Brand agent The brand agent is similar to the dealer. However, unlike the latter, he does not buy the vehicles he sells. He acts directly for the producer. Thus, unlike the dealer, he does not bear the risk.
Dealer A dealer operates as a specialist dealer except that it is not tied to any brand. In most cases, they offer products from various manufacturers for sale.
Broker The broker is a professional who buys and sells a vehicle on behalf of the end customer. The broker is commissioned by his client to buy a car. Once the vehicle has been found, he buys it and then sells it directly to his client.
Auctioneer The auctioneer is an intermediary commissioned to sell vehicles in the form of an auction.
As the broker and the auctioneer are more special cases, we focus on the brand subsidiary/branch, the specialist dealer, the brand agent and the dealer for the rest of this article. In the following, these are referred to as "professionals".
Private seller
When buying from a private seller, the vehicle is not sold in the context of a professional activity. Generally, the seller's car is the object of the sale. However, it is also possible that a private seller is not the owner of the car. In this case, there is an agreement between the owner and the person handling the sale.
Now let's take a look at the main differences resulting from the types of sellers.
Condition of the car
As mentioned above, it is difficult to judge the quality of a vehicle until one has spent time in it. Thus, there is always an element of uncertainty regardless of the buyer's knowledge.
The risk is usually higher when buying from a private individual. In this case, the vehicle has often not been checked or prepared by a professional. It also tends to be less well-prepared than when purchased from a professional. This may translate into a greater number of visual defects, for instance. However, it is difficult to generalise, as private sellers vary greatly.
When buying from a professional, the car tends to be better prepared and displayed. From a purely visual point of view, the quality of the product is therefore better. Many professionals use checklists. The purpose of these is to ensure that the car is in good condition, both visually and mechanically. Moreover, a professional has a great interest in satisfying his customers so that they will come back for their next vehicle or maintenance. However, this does not mean that the car is in perfect condition. It is therefore important to remain critical.
Legal considerations
One of the main pitfalls of car sales is the legal aspects. This is particularly problematic if they are not properly addressed, especially if there is no contract. This risk is higher in sales between private individuals. However, although professionals tend to have prepared contracts, it is still important to read the clauses carefully to avoid accepting unfavourable conditions. This is particularly true for the exclusion of guarantees.
Price
The cheapest offers are usually found with private individuals. Also, the negotiation margin is often higher with private parties. However, it is not advisable to consider only the selling price. A higher price can be offset by additional services such as a warranty, administrative support or a second set of wheels. This partly explains why vehicles offered by professionals are sometimes more expensive. In addition, a financial transaction with a private seller is riskier than with a professional one. This risk is increased when the seller needs the proceeds of the sale to pay off the lease, as the vehicle cannot be registered until the balance has been settled (code 178 on the car registration).
The reverse effect is also possible. A private seller may be biased and overestimate the value of his vehicle. This is especially the case when money has been invested in the vehicle and modifications. To learn more about the effect of modifications on the sale price of a vehicle, we recommend our article of 22.11.2021.
Conclusion
In this article, we have presented some of the advantages of buying a car from a professional or a private party. Overall, it can be concluded that buying a vehicle from a private seller involves more risk from a legal and a product quality point of view. However, the generally lower sales prices compensate (at least partially) for this risk. When buying from a professional, the price tends to be higher. However, this translates into additional services and a reduction of the risk.
However, there is a simpler solution to avoid these problems: Carequest Sàrl.
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