Advantages and disadvantages of buying a used car from a dealership

cars in car lot

Buying a used car from a dealership guarantees you a number of benefits compared to buying from a private seller. Before making your decision, ensure you understand both the advantages and disadvantages beforehand. Some of the advantages that come with buying a used car from a dealership include:

  • Dealerships offer financing options, which private sellers simply won’t. You are guaranteed the title of the vehicle and a statutory warranty on the car when you buy directly from a dealership, which is less risky. However, this is only applicable on cars that are under 10 years old or below 160,000kms (and below the NSW luxury car tax threshold.) This warranty is valid for three months or 5,000km from date of purchase and covers items relating to safety, reliability and roadworthiness.
  • Financing options are also made available at dealerships. Although, it is worth shopping around. A used car loan from the NRMA will offer competitive rates and Member benefits.
  • Unlike the majority of private sellers a dealership has an array of used cars on sale for you to choose from. For those who are unsure of what type of car to purchase, there are salespersons available to offer advice and a wealth of information to help you make your choice.
  • When purchasing a car, you may wish to trade in your current vehicle. Dealerships can offer an exchange option by trading it in, saving you the hassle of selling your car privately.
  • You might like to add extra features onto your chosen car. Dealers allow you to choose from a range of different features on offer, to improve the use of your car to meet your needs. For example, you might like to add new wheels which the dealer can arrange for you. Adding extra features however, will push costs up, so ensure you have the right car loan to suit you.

Disadvantages of purchasing a used car from a dealership include:

  • Your costs are likely to increase when purchasing from a dealership. Costs including advertising might be indirectly charged to the buyer, increasing overall costs which wouldn’t happen with a private seller.
  • Whilst you have the option to trade in your old car, this doesn’t always guarantee a fair price. Often a lesser price will be offered to trade in your car, as dealerships will be aware that you are likely to be looking for a quick sell.

Looking to buy a used car?

NRMA provides car loan options to get you on the road faster