Dealership or Private vehicle purchase?

New to Canada Auto Loans
Uncertain whether to buy a vehicle from a Dealership or a private seller? What are the benefits or potential pitfalls of a Private Sale versus a retail sale at a Dealership? It all boils down to value vs. risk. While
buying a private sale vehicle may seem like a great bargain on paper as far as the potential saving go, you may decide that the risk is too great depending on details of the purchase. You may also decide that you are saving a lot of money, everything checks out well, and to go through with a private sale. There are several things to consider when choosing a private sale vehicle or one at an Auto Dealer.

Dealer Vehicle Purchase Benefits and Pitfalls – There are several benefits in purchasing a vehicle from a Dealership and a few pitfalls. Depending on the personal and Dealership you are purchasing the vehicle from? Do your research online to find the most reputable Auto Dealers near you. For the most part a Dealership sells many vehicles over a long period of time as opposed to a private seller who may only sell one or two vehicle every 2-5 years or so. Typically a Dealership is striving to have a satisfied customer base and good reputation in the community. Most Dealerships will offer financing options. You can check out your financing options and what you qualify for by clicking here.  Other benefits include Certified/Reconditioned late model vehicles, warranty, extended warranty, detailed and cleaned, reconditioned, no liens, Canada wide Carfax reporting, full disclosure of any damage to the vehicle, recourse for any problems, AMVIC regulated, trade ins accepted, quick turnaround time, even door to door delivery. Keep reading for more tips.

Private Vehicle Purchase Benefits

Lower Purchase Price – A lot of money can be saved by buying a low kilometer used vehicle. In some cases you can save up to 40% after the first two years of ownership. Drivers in Canada put on an average of 15,000 kilometers per year, so in most cases you can still enjoy a portion of the remaining factory warranty. There are usually options as well to extend the warranty beyond the factory warranty.

Lower Payments – Many times the lower price will reflect a lower payment or allow you to pay the vehicle off sooner than a brand new one. Depending on the overall cost and additional warranties and insurance costs this might make the most sense.

Lower Insurance Premiums – A used vehicle usually has a lower insurance

Higher Model and Trim Line – You may not be able to afford payments on an $80,000 luxury car or new truck, but if you buy a used one that is only a few years old it might be attainable at a fraction of the cost. Drive your dream vehicle sooner rather than later.

Sales Taxes – No additional sales taxes are charged on used privately sold vehicles as compared to brand new vehicles. Some provinces in Canada have no taxes on privately sold used vehicles while others still have some sales taxes such as GST on a privately sold used vehicle.  Alberta for instance has no taxes on privately sold vehicles while British Columbia has a GST tax on privately sold vehicles.

Vehicle History – You may be purchasing a low kilometer used vehicle from the original owner, who has bills, receipts and documentation on the vehicle since new.

Accessories & Add-Ons – You may discover the private seller has added a lot of additional value to the used vehicle by purchasing equipment such as car starter, upgraded wheels, interior, protection packages from the dealer, alarms, GPS, stereo, suspension, towing equipment, and more.

Private Vehicle Pitfalls

Final Purchase Price – Depending on the used vehicle you are considering on purchasing you may or may not be saving a significant amount of money over a private sale used one or a pre owned or brand new one from a Dealership? Depending on manufactures rebates, reductions, and finance options, you may find that buying a vehicle from a Dealer makes the most sense. It is wise to consider what your future intentions are? Are you putting on a lot of kilometers, will you keep it for a long time, is the cost justified, length of warranty remaining, resale value, reliability, practicality, wants vs. needs?  There are also maintenance costs that usually get higher as vehicles age. Can you do maintenance and repair yourself, do you have the time, knowledge and equipment? You may not save as much money as you thought buying a private sale used vehicle after all is said and done.

Financing or Cash Purchase – Whether you are paying cash or financing, purchasing a low kilometer used car privately, you will most likely find that your options may be limited. If paying cash you may need to dip into your savings that you might otherwise use for something else. If you choose to finance, you may find your bank won’t offer you a loan on the vehicle due to the age, price, year, or not qualified due to personal credit. Many times people will utilize a line of credit to purchase a privately owned vehicle. This can lead to great savings or you might end up paying more depending on how much of the principal you are paying on payments. Check out our Car Loan Calculator here to estimate your budget and payments.

Vehicle History – You may find out the vehicle has had several owners, was involved in a collision, was rebuilt, or from an undesirable region of the country where there is more rust, and more. Beware that vehicles that have been written off in one province, then purchased, brought to a new province and rebuilt do NOT show the rebuilt status in the new province. Unless you do a Canada wide Carfax and just do a provincial Carfax, you will not be aware of this loophole that curbers use to prey on unknowing people.

Accessories & Add-Ons – You may discover that the vehicle you are considering is a base model and missing some accessories you need or want. If you need to install trailer towing equipment, GPS Navigation, heated seats, leather, protection products, wheels, or other items, it can very quickly add up and you might not be saving as much as you initially thought.

Apply now Call Now