Money Advice Service

If you’ve decided to buy a used car, there are a number of ways you can go about this – some more risky than others. Read on to find out the different pros and cons of buying from a used car dealer, a private seller, a car auction showroom or a car auction website.

Dealers – franchise and independents

If you’re thinking of buying a used car from a dealer, you can go to a franchise dealership that also sells used cars, an independent used car dealer or a car supermarket.

Pros of buying through a dealer

  • Your consumer rights are stronger than if you buy privately.
  • A car bought from a dealer is likely to have a warranty.
  • You’re likely to be able to part-exchange your existing car.
  • Car finance options might be available, including hire purchase and personal contract payment.
  • If you’re buying nearly new, there might be some of the manufacturer’s warranty left.
  • The dealer will normally have inspected the car and repaired any major faults.
  • You can negotiate with a dealer.
  • At certain times of year you might get a particularly good deal if they are keen to offload used cars to hit sales targets.

Cons of buying through a dealer

  • Dealers’ prices tend to be higher than when buying a car privately.
  • You need to know how to negotiate the best deal.
  • The warranty offered might include restrictive clauses.

Buying from a private seller

Buying a used car privately can be risky because if there are problems afterwards you have less legal comeback than with a dealer. So it’s a case of ‘buyer beware!’

Pros of buying privately

  • You’re likely to pay less than if you bought the same car from a dealer.
  • If a seller is desperate to find a buyer you can probably negotiate a big discount.
  • You get to meet the previous owner.

Cons of buying privately

  • You won’t have the reassurance of a warranty unless the car comes with time left on a manufacturer’s warranty – so you might want to buy some insurance cover for it.
  • You won’t have the option of a car finance plan, so would need to arrange your own loan if you needed one.
  • You have fewer consumer rights – the car only needs to be roadworthy and ‘as described’, and the seller must have the legal right to sell it.
  • Your research and checks are vital – if you end up with a faulty car and the seller has done nothing wrong, there’s little you can do about it.
  • You won’t have the option of part-exchanging your existing car.

Car auctions

Auctions are one of the riskiest ways to buy a used car. But they can be a good place to find bargains, as long as you stick within your budget and take a few basic precautions.

Live car auctions

Buyer beware!

Wherever you buy a used car, make sure you:

  • Ask lots of questions
  • Do your research and checks
  • Test drive the car before making a decision

Around 1.4 million cars are sold at live auctions in the UK each year.

Many of these cars are dealers’ part-exchanges or vehicles previously used by leasing companies and car fleet managers. Independent dealers source two-thirds of their used cars at auctions.

One of the biggest auction houses, British Car Auctions, includes a BCA Assured mechanical report on most cars it sells under eight years old.

The check is carried out by the AA and includes: brakes (through an onsite drive), warning lights, Tyre depths, engine noise, gearbox check, vehicle suspension and fluid levels.

If the car you buy doesn’t match its BCA Assured report, you have up to 48 hours or 500 miles’ driving in which to inform BCA.

They’ll then rectify the fault(s) and in extreme cases give you a refund.

Pros of live car auctions

  • Good place for bargains, as long as you do your research first and test drive the car if you’re able to.

Cons of live car auctions

  • Once the hammer has gone down there’s no backing out.
  • Unless the car is not owned or described by the seller, you’re unlikely to have many consumer rights – check the auctioneer’s website about this.
  • It’s easy to get carried away and exceed your budget.

Online auctions

Online auctions are becoming increasingly popular, with eBay Motors one of the favourite sites.

There are similar pros and cons to buying privately, with a few additional ones below.

If you’re thinking of buying a car through an online auction, it’s particularly important to research the car you’re after in advance.

Make sure you’ve given it a thorough check and test drive before making a bid.

Pros of online auctions

  • Easy to search using filters.
  • Good place to find bargains.

Cons of online auctions

  • To ensure the car really is what it seems to be, you need to inspect it before bidding – but this isn’t always possible.
  • You have few or no legal rights, apart from if the car doesn’t meet its description or if the seller isn’t the legal owner.

Your next step

Find out when to buy a car, so you make the most of dealers’ seasonal offers.

This article is provided by the Money Advice Service.