How to buy a used car: private transaction vs. dealership

People who are in the market for a used car may find themselves confused by all the different channels through which a consumer can buy a used car. The most common ways used cars are bought, according to Edmunds.com, is through private party transactions, on independent used car lots and on the used car section of a new car dealership. Private transactions and dealership transactions both have pros and cons.

Private parties often offer the most reasonable prices, according to Edmunds, and some buyers find the transaction more relaxing. Those that are intimidated by the prospect of negotiating down a salesman may want to look for their used car through a private party.

However, one advantage of used car dealers is that they sometimes receive vehicles as trade-ins. Since these vehicles are usually obtained by the dealership at very low prices, drivers can more easily make a low offer that the dealer accepts. Dealerships can also provide the security of a strong warranty.

People who have bad credit history but are in the market for a used car can use a car loan payment calculator to determine what kind of payments they can afford to make and set their budget accordingly.