Where to buy a car: comparing the options

Cars are one of the largest expenses in many people’s budgets, so knowing where to get the best deal can considerably impact your finances. The best option for you will depend on what you’re looking for in a car and what you value most. Still, each option has undeniable pros and cons for that should be kept in mind. Learn about the options you have and what to consider.

What options you’ll learn about:

• Car dealership
• Used car dealership
• Private seller
• Car buying service
• Where should I buy my next car?

Car dealership

A car dealership is the classic option for buying a car. While not all dealerships are the same, you can generally know what you’re getting into when you walk into a car dealership.

Pros:

• Provide the ability to look at and test drive a variety of vehicles and trims from specific makers.
• There’s potential for special promotional rates can help lower your monthly and overall payments.

Cons:

• Salespeople often pressure customers to take poor financing options and spend on unneeded upgrades.
• In-house financing options tend to have higher rates than alternatives.

Ways to tell if a specific dealership is worth your time:

• Reviews. Pay close attention to the content of reviews and any patterns, not just the score.
• Word of mouth. Asking people you know and trust what their experience with dealerships in your area is invaluable.
• Advertising. Some car dealerships advertise heavily, which can indicate that they are more focused on new customers than on fostering loyal customer relationships.
• Prices. Be wary of any deals that are too good to be true. Dealerships can add extra fees later on, heavily push add-ons, or show incentive prices most people don’t qualify for to make deals seem better than they are.

Used car dealership

Used car dealers are a specific subset of car dealerships that focus solely on selling used vehicles. These dealerships often target a lower-income clientele with poor or non-existent credit who may have trouble affording a vehicle through other means. For some, these dealers may be the only sellers willing to work with them.

Pros:

• These types of dealerships will likely have more inventory of used cars than a regular car dealership.
• Salespeople are more willing to work with low-income or poor-credit customers.

Cons:

• Sometimes, salespeople will employ shady tactics to obscure bad deals
• The interest rates are often higher.
• Some cars may not be in good condition; due diligence is needed to ensure you buy a reliable car.

Private seller

Buying a car through a private seller tends to be less of a hassle than going through a dealer or other means. However, this can come with drawbacks. Your experience with a private seller will vary significantly from person to person, but there are general considerations to keep in mind.

Pros:

• Private sellers are typically motivated to get their car sold and won’t have many hoops to jump through.
• Many private sellers aren’t concerned with getting top dollar for their car as long as they get a fair deal. The best deals on cars will often come from private sellers.
• If you personally know someone selling their car, you can rest easy knowing they’re giving you a fair price and fully informing you of any issues upfront.

Cons:

• You don’t always know exactly what you’re getting into with a private seller. A nefarious seller could intentionally conceal major issues. Many private sellers know little about mechanics and may be unaware of potential problems.
• Safety can be a concern when dealing with a private seller. Always meet with sellers in a public space and bring someone with you.
• Working with individual people will vary dramatically. While private sellers can be some of the best car buying experiences, they can also be some of the worst.

Car buying service

There are many car buying services to choose from, but a few of the most popular include CarMax, Carvana and TrueCar. These services offer a modern, convenient way to buy a car, often without leaving home. However, there are a few caveats to keep in mind when using one.

Pros:

• You can often complete the buying process entirely online and have the car delivered directly to your home.
• Car buying services often have an intuitive user experience, making browsing their complete inventory effortless.
• For those who don’t enjoy the back-and-forth of car dealerships or private sales, many car buying services operate under a set price model with no haggling.
• Some services, like the Alliant Car Buying Service, offer a discount on auto loan rates.

Cons:

• If you’re buying a car online, you won’t have the option to test drive it beforehand.
• There will likely be an additional fee for home delivery

Where should I buy my next car?

Ultimately, where you choose to buy a car comes down to what you value most. Someone who wants convenience and to avoid haggling or sales pressure might prefer a car buying service. On the other hand, someone torn between several vehicle options may find the ability to test drive at a dealership essential to making their decision.