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Pros & Cons of Dealership Car Sales

People are often torn between the idea of buying a car from a car dealership or a private seller.

There are plenty of horror stories going around about both - tales of bad experiences with pushy sales people, dodgy private sales and cars that seem wonderful at first only to fall apart soon after you drive away.

We’ve put together a list of pros and cons on buying a car from a dealership, helping you to make an informed choice on where you’re going to look for your next car. You can also check out our Pros & Cons of Private Car Sales.

Car Dealership Advantages

Reviews

A quick search online should find reviews for most of the car dealerships in your area. You’ll know in advance which dealer is reputable and which ones aren't.

Haggling

Car dealers want to get a quick profit so they need to make a sale fast. In the old days dealers would spend more time with you, but it meant you could only ever talk them down a couple of hundred dollars. Now, if you stand your ground you can manage to work thousands of the original price, especially if you shop at the end of the month when their sales quotas are almost due.

A pre-approved loan helps with this too. If you can show you definitely have the money and aren’t wasting time, they’ll be more likely to offer you a better price before you take that money elsewhere.

Rebates

They may not be advertised so you’ll need to do some research but there are sometimes hidden manufacturer rebates on certain car brands and models.

Warranty

Dealerships will often have some form of warranty on their vehicles, a promise that they will not break down the moment you leave the car yard. You can’t really get that kind of guarantee from a private sale.

Extras

If you’re good at haggling you might be able to get some extras thrown in. Things like extended warranty, different seats, even the model with that fancy sunroof you like so much.

Trade In

You can trade in your current car as a down payment for your new car. This will save you a great deal of time trying to sell your car, as well as reduce the price of your new car in one easy move.

Car Dealership Disadvantages

Mark-up

There is often a huge mark-up on car prices. Dealerships are paying for rent, wages and have several cars coming in and out every day, all while trying to make a profit. The mark-up is always going to be greater than that of a private sale.

Dealership Finance

Many car dealerships will try to get you to use their finance provider. This is not always the best loan or interest rate for you, it’s just the one that pays the dealer a commission. The best way to avoid this is to organise a pre-approved loan with your own finance provider before shopping for a car.

Trade In Price

Yes, trade in was listed in the pros, but the trade in price can often be a con. A dealer may try to get your car for far less than what it is actually worth. Make sure you know what the market price of your current vehicle before you start using it as a trade in.

Fill out our form & get pre-approved for a loan today!