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Every one I know hates car dealerships. Yet 90% of them refuse to buy a used car from a private party. While it's true they have a lobby and have twisted the a

Every one I know hates car dealerships. Yet 90% of them refuse to buy a used car from a private party. While it's true they have a lobby and have twisted the arms of legislators, it's also true that people prefer buying from them. And when they don't buy from them, they buy from CarMax which, for used cars, is even worse than buying from a dealer (pre-pandemic). What keeps people from buying from private parties? Unwillingness to plan and save money (i.e. refuse to buy car without financing). Even for under $10K Being scared of getting a lemon because they lack knowledge about cars. I too lack that knowledge, which is why I get a trusted mechanic to check out any car I buy. Hasn't failed me in 20 years. Used car warranties are useless - they don't last long. And the last time I went car shopping, every used car from the dealer that seemed like a good price had serious problems when I took it to the mechanic. Never get a used car from a dealer if they don't let you take it to a mechanic. Quicker process: It may take a while finding a good used car via Private Party. OTOH, there are plenty of dealers one can walk into. However, once you find a car you like, the process is much smoother with private party. You either agree on a price or you don't. No hidden fees. You know exactly what you're getting. Edit: I just want to be clear: I'm not trying to convince anyone to buy private party. If you're happy with avoiding the "hassle", that's fine. My point is that for all the complaints about dealers, the reality is people prefer them.

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qzw 4y ago
People don’t have trusted mechanics or know how to get one. For the majority of people, the dealer where they got the car is their “(somewhat) trusted mechanic”. That’s why they go to dealers or CarMax and pay a huge premium, just for the psychological comfort. And for certain premium brands, a certified preowned car that comes with an extended warranty might not even be that bad of a deal, at least during normal market conditions.
- BeetleB 4y ago
  I could talk to each of these points, but at the end of the day, you're agreeing with me: As much as people complain about it, they prefer dealers, or options even more expensive than dealers (e.g. CarMax) even if for very poor reasons. All the problems you list are not difficult to overcome when it comes to private party. People do not want to overcome it - they would rather pay a few thousand dollars more.
  - qzw 4y ago
    I don’t disagree with you that serious money can be saved if one knows the correct way to buy from a private party. But psychological comfort also has real value for a lot of, maybe even most, people. It may seem like a poor reason to you, but for them it’s worth it. Plus, you should be happy to have fewer people competing with you to buy from private sellers, thereby further lowering your price.
- eikenberry 4y ago
  I buy at CarMax because... a) I hate bartering. b) I want to visit a website, look at the cars available, go test drive a few, buy the one I like best. IE. Convenience. My time is worth the few thousand extra I pay that would be spent tracking down private owners, driving around to all of them to test drive, getting a mechanic to check it over, dealing with all those people, etc.
  - BeetleB 4y ago
    > My time is worth the few thousand extra I pay that would be spent tracking down private owners, driving around to all of them to test drive, getting a mechanic to check it over, dealing with all those people, etc. This is a common refrain, and while you can afford it, I doubt many people I know can really afford that cost of a few thousand dollars. If I offered a $1500 fee for doing the leg work for them, would they pay me the money? If not, then "convenience of saving time" is not the reason.
    - qzw 4y ago
121789 4y ago
It’s a big purchase and risk and most people don’t have a trusted mechanic. You know you’re getting a little scammed at the dealership, but the risk of a complete lemon feels much lower (and you have someone to complain to post-sale if things don’t go well). Interesting idea for a revenue stream for mechanics though (used car assessments for a fee).
- BeetleB 4y ago
  > You know you’re getting a little scammed at the dealership, but the risk of a complete lemon feels much lower (and you have someone to complain to post-sale if things don’t go well). But that's my point. It's only a feeling, and likely not reflective of reality. And in most cases, no: You have no one to complain to. A lot of used cars have fairly low warranties (a few months, maybe?). Most problems will not occur in that short window.
Retric 4y ago
Don’t forget about transaction costs. IMO, buying an economic new car and then keeping for most of the vehicles lifetime is close to optimal. No need to stress about comparing a bunch of specific cars just a few models you can research online. It’s low stress because you have a lot of leverage at the dealership as you can get the same thing down the street or in 3 months if you chose to walk out the door.
- BeetleB 4y ago
  > IMO, buying an economic new car and then keeping for most of the vehicles lifetime is close to optimal. It sounds like you're adding the time searching, etc to your model (which is fine). From a purely financial perspective, I do wonder. I think the key phrase is "keeping it for most of the vehicle's lifetime". If I look at the used cars I've bought, the total I've paid is $17000 in today's dollars over the last 19 years.[1] If you throw in various repairs, it adds a few thousand more (I'm too lazy to look up the actual numbers, but you can find it if you dig deep in my comment history). And that number includes routine maintenance everyone has to do (oil changes, replace brakes, etc). A comparable new car today would cost more, but you get the benefit of having a modern car instead of old cars that I've driven. The down side is you're stuck with that car for a long time, whereas you can keep getting newer model used card every so many years. [1] I didn't get lucky or find fantastic deals. These numbers are representative if you follow a few simple rules of used car buying.

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qzw 4y ago

People don’t have trusted mechanics or know how to get one. For the majority of people, the dealer where they got the car is their “(somewhat) trusted mechanic”. That’s why they go to dealers or CarMax and pay a huge premium, just for the psychological comfort. And for certain premium brands, a certified preowned car that comes with an extended warranty might not even be that bad of a deal, at least during normal market conditions.

BeetleB 4y ago
I could talk to each of these points, but at the end of the day, you're agreeing with me: As much as people complain about it, they prefer dealers, or options even more expensive than dealers (e.g. CarMax) even if for very poor reasons. All the problems you list are not difficult to overcome when it comes to private party. People do not want to overcome it - they would rather pay a few thousand dollars more.
- qzw 4y ago
  I don’t disagree with you that serious money can be saved if one knows the correct way to buy from a private party. But psychological comfort also has real value for a lot of, maybe even most, people. It may seem like a poor reason to you, but for them it’s worth it. Plus, you should be happy to have fewer people competing with you to buy from private sellers, thereby further lowering your price.
eikenberry 4y ago
I buy at CarMax because... a) I hate bartering. b) I want to visit a website, look at the cars available, go test drive a few, buy the one I like best. IE. Convenience. My time is worth the few thousand extra I pay that would be spent tracking down private owners, driving around to all of them to test drive, getting a mechanic to check it over, dealing with all those people, etc.
- BeetleB 4y ago
  > My time is worth the few thousand extra I pay that would be spent tracking down private owners, driving around to all of them to test drive, getting a mechanic to check it over, dealing with all those people, etc. This is a common refrain, and while you can afford it, I doubt many people I know can really afford that cost of a few thousand dollars. If I offered a $1500 fee for doing the leg work for them, would they pay me the money? If not, then "convenience of saving time" is not the reason.
  - qzw 4y ago

121789 4y ago

It’s a big purchase and risk and most people don’t have a trusted mechanic. You know you’re getting a little scammed at the dealership, but the risk of a complete lemon feels much lower (and you have someone to complain to post-sale if things don’t go well). Interesting idea for a revenue stream for mechanics though (used car assessments for a fee).

BeetleB 4y ago
> You know you’re getting a little scammed at the dealership, but the risk of a complete lemon feels much lower (and you have someone to complain to post-sale if things don’t go well). But that's my point. It's only a feeling, and likely not reflective of reality. And in most cases, no: You have no one to complain to. A lot of used cars have fairly low warranties (a few months, maybe?). Most problems will not occur in that short window.

Retric 4y ago

Don’t forget about transaction costs. IMO, buying an economic new car and then keeping for most of the vehicles lifetime is close to optimal. No need to stress about comparing a bunch of specific cars just a few models you can research online. It’s low stress because you have a lot of leverage at the dealership as you can get the same thing down the street or in 3 months if you chose to walk out the door.

BeetleB 4y ago
> IMO, buying an economic new car and then keeping for most of the vehicles lifetime is close to optimal. It sounds like you're adding the time searching, etc to your model (which is fine). From a purely financial perspective, I do wonder. I think the key phrase is "keeping it for most of the vehicle's lifetime". If I look at the used cars I've bought, the total I've paid is $17000 in today's dollars over the last 19 years.[1] If you throw in various repairs, it adds a few thousand more (I'm too lazy to look up the actual numbers, but you can find it if you dig deep in my comment history). And that number includes routine maintenance everyone has to do (oil changes, replace brakes, etc). A comparable new car today would cost more, but you get the benefit of having a modern car instead of old cars that I've driven. The down side is you're stuck with that car for a long time, whereas you can keep getting newer model used card every so many years. [1] I didn't get lucky or find fantastic deals. These numbers are representative if you follow a few simple rules of used car buying.