Let’s face it: most car shoppers dread the dealership experience. A recent Autotrader study found that fully 99% of shoppers want to see major changes in the dealership sales process. Of course, not all car dealers are bad; some take customer satisfaction quite seriously, earning high marks and repeat business. Nevertheless, dissatisfaction and distrust have long been predominant themes.
In response, third-parties like TrueCar and Edmunds have taken root, aiming to improve the experience by offering consumers insider advice and information as well as member perks like guaranteed discounts. More recently, startups like Beepi and Shift have entered the scene with visions of reinventing the entire dealership sales process.
These changes are admirable and welcome. However, one thing that seems to have been overlooked is the fact that, to buy a car, you don’t actually need a dealership at all.
Since basically the invention of the automobile, there has been a simple and cost-effective way to obtain a car without ever setting foot on the showroom floor:
Buy a used car directly from its private owner.
Buying from a private seller not only enables you to skip the dealership entirely; it also saves you thousands. Consider that, according to Edmunds.com, the average price for a clean 2011 Honda Accord EX-L with 50,000 miles is about $1500 higher when sold by a dealership versus a private party. This is for the exact same car with no additional warranties or other perks from the dealer. A certified pre-owned (CPO) car would typically be nearly $3000 higher.
That’s because the dealer has a business to run and therefore needs to pad every sale with a bit of profit to cover its operating costs. There’s nothing wrong with that, of course, but as the buyer you have a choice. So why not stretch your budget an additional 10-20% automatically by simply eliminating the dealership from the process?
Buying from a dealership may feel “safer” than buying from an individual person. When you are spending thousands of dollars, it’s reassuring to do it in a place that has a business license, its own parking lot, a receptionist and so on. But the truth is that buying a car from a dealership doesn’t provide you with any special protections from getting screwed.
While it’s true that a few progressive dealerships like Carmax offer buyers extras like the chance to exchange a car after a few days, such policies are the exception, not the rule. (And in that case, you’re also required to pay the full Carmax list price, no haggling.) Generally speaking, once you close the deal and drive off the lot, the car is entirely your responsibility, just as it is in a private sale.
A good dealership can definitely make the entire process a bit easier. Most have a fairly wide selection on the lot, so you can sample a variety of cars in a single visit. And when you are ready to buy, they will assist you with the financing, if needed, as well as all registration paperwork (for an additional fee, of course), so all you have to do is sign some papers and drive the car away. If it all goes well, buying from a dealership can certainly be convenient.
But at what cost? Is this convenience worth several thousand dollars? Or having to endure what many consider to be the most unpleasant of all purchasing experiences?
Perhaps if buying from a private owner were a terribly burdensome or risky affair, then it would be. But, with the experts in our community by your side, buying from a private owner doesn’t have to be hard or scary at all.
On the contrary, it can not only save you money but actually make car buying fun.
About Mark HolthoffBefore joining Klipnik, Mark spent eight years at Edmunds.com developing and running their Live Advice and Consumer Reviews programs. His first car was a 1974 Triumph TR6 in Sapphire Blue, which he bought with his life savings of $2000 and kept running with a combination of spare change, duct tape and dumb luck.
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