Auto-Dealer vs Private Party

We Help You Choose: Auto-Dealer vs. Private Party

From the car loan, warranty, selection and financing, there's a lot behind buying a car. See if buying at a car dealer or through a private party is the best choice for you and your budget.

BECU offers low-interest car loans for vehicles from dealers and private individuals.

Let's consider your two options:

Auto dealership: An official business in your community that has a vested interest in making sure you have a good experience. They offer return options should the vehicle end up a "lemon." They can also perform safety inspections to make sure used vehicles are fit for the road. At a dealer, you'll find easier access to warranty and repair packages, and often have the ability to special -order a vehicle to your specifications. Price negotiations can include manufacturer incentives, as well as internet pricing.

Private sale: Typically a purchase from an individual. Private sale is usually final with no option to return. Used vehicles come with additional risk. You'll want to secure documentation such as CARFAX and maintenance records, and ask questions regarding the vehicle's usage and care before you drive away. Despite the private sale offering less in the terms of choice – what you see is what you get – it may offer more in terms of price flexibility. The private party may ask for one price but settle for a far lower one that favors you, the buyer.

Service Contracts

A service contract (formerly known as a warranty) helps pay for repairs when your vehicle breaks down. The right contract can be the answer to paying for necessary repairs, and different providers will offer many options for coverage. Stated coverage will list the components covered while exclusionary policies state what's not. A service contract can provide peace of mind should you experience unexpected repairs.

How to Shop for a Service Contract

A little-known fact about service contracts: They have an MSRP (Manufacturer's Suggested Retail Price). Yet, just like a pair of sneakers that may have a suggested retail price of, say, $60, you could find the same shoes at five different shops for five different prices. The same is true with service contracts. Shop around and find the best price. Be sure to compare the same service contract. For example, ask what a five-year, 75,000 mile contract is (on the same model car) and if it's stated or component coverage—so you're comparing the same product. Be prepared with this information when you come to the negotiation table or when researching after-factory contracts. Be sure you're not only comparing price, but also the coverage that suits your vehicle's future needs.

Auto dealership: A dealer usually offers multiple choices when it comes to purchasing a service contract, particularly with a new vehicle. You may even receive a contract as an incentive, free of charge. The main advantage to buying your contract at the dealer is being able to bundle the price of the service contract into the price of the car, and thus, your car payment. It's okay to negotiate the cost but remember the dealership employs members of our community and needs to make profit to keep the lights on.

Private sale: If you're buying a used vehicle, you have the option of buying an after-factory warranty. You can even purchase a contract extension of already existing warranty agreements.

Price Negotiation

Understanding the value of the car you seek is a mix of Kelley Blue Book or J.D. Power, your area's economic climate, the vehicle's history and you. You can walk away if the price isn't right.

Auto dealership: A dealer has overhead it has to pay. But, with a dealer you may be able to negotiate upgraded features like, add-ons, service contracts, unlimited car washes or free maintenance.

Private sale: The only individual benefitting from the used-car sale is usually just the seller. This may net you more or less wiggle room. Either way, you know that you are speaking to the “boss” – they have the final say when it comes to the sale price.

Be prepared: Whether it's a dealer or a private party, research the car's value so that you know if you are getting a great or poor deal.


Auto dealership: A dealer provides the luxury of choice: selection abounds depending on where you go. You may even find a car you want is available in several different colors. Or, pay only a little more – or a little less – and pick the same vehicle just a year or two older or newer. Should you be deciding on multiple brands or models, heading to dealership can allow you the flexibility to test-drive various options in the same day. A dealer also is often connected to a network of other dealerships they can contact to find the car you seek. Was it the right truck but without the right sound system? Have them make a call. The choice is yours.

Private sale: You're buying one vehicle from one person. What you see is what you get. If, once you test-drive it, it doesn't feel or drive right, then know to walk away, even if the price seems perfect, the seller wonderful, and the color option is just the one you always wanted. Get back to the hunt – there's always more showing up in car search engines every day. Word of caution: There are no returns when you go with a private party.


Buying a car is generally not a quick errand no matter who you buy from – there's typically a test drive, paperwork signing, and the need to obtain money. If you're acquiring a car loan, you have more paperwork to sign, either at the financial institution or in the dealership. See how it all breaks down.

Auto dealership: A dealer's sales office, negotiation table and finance office takes time, but is all conveniently located in one building. You may even find children's play areas to help distract the kiddos during the process, plus on-site snacks to keep you caffeinated and fed.

BECU financing is available on-site with hundreds of car dealers in the Pacific Northwest, Idaho, Oregon and South Carolina. The dealer takes care of a wide variety of minute details that can be time consuming: transferring ownership and title, and ensuring new plates are sent your way. No need for a trip to the DOL.

Private sale: Purchasing a car from a private party is a bit of a chicken-egg situation: Do you go in preapproved before looking at the car, or do you look at the car and then become preapproved? The good news is that once you are preapproved, you have 30 days for any additional pulls on your credit score – it all counts as the same “pull.”

Once you've found a car you're serious about test-driving, choose a safe, well-populated public place for you and the car owner to meet. Bring someone with you for a second opinion. Ready to sign? Consider the legwork involved: You may eventually have to visit the Department of Licensing (DOL) bringing the correct paperwork for: transfer of ownership, titling, plates, etc. But you may also need to sign and complete all paperwork at a branch location. You'll want to head to BECU (you can make an appointment ahead of time) and get everything you need done for your auto loan. A member advisor walks you through the entire process – from what signatures are needed to how the loan is finalized – so you can go from car shopper to car buyer with ease.

Have additional questions? Chatting with a member advisor is always a great start. Visit your local BECU, make an appointment ahead of time;or call us: 800-233-2328.