The difference between buying a car through a private sale and using a car dealer

We look at the pros and cons of each, as well as where car brokers fit in to this picture.

So you want to buy a new car... where do you begin your search? Do you even know what kind of car would best suit your needs?
A lot of your answers to these questions will depend on how much you know about cars and their value, and how sure you are of what you want and where you can find it.
Some buyers choose to hit the car yards and put their faith in a car dealer to guide them in the right direction. Others prefer to go it alone and hopefully strike the deal of a lifetime with a private sale.
A third option is to enlist the services of a car broker, who has the knowledge that you may be lacking about the New Zealand car market, and is also independent and impartial.
Here, we talk you through the pros and cons of each car-buying avenue:

Using a car dealer

The pros:
When you buy through a car dealer there are legal protections in place for the consumer which gives you a safety net and peace of mind.
Car dealers are bound by the Consumer Guarantees Act (CGA), and also bound by law to provide a consumer information notice (or CIN).
A CIN will tell you whether the vehicle was imported as a damaged vehicle, whether there are any anomalies with the odometer - which is how you can tell whether it's been wound back - how many owners it's had and whether there's any finance owing on the vehicle or if there's an interested party on the car, which has the right to seize the car if its previous owner does not complete payments on it.
Most vehicles at a dealership are pre-inspected and workshop serviced onsite, which means you're likely to get a better-quality product than you would with a private sale.
Car dealers have a reputation to lose, so they're motivated to make you happy. They often offer additional car services, take care of all the paperwork for you and they're knowledgeable.
The cons:
Car dealers often have little wiggle room on price so you're less likely to be able to negotiate the deal of the century. Their accessories can be expensive. Unfortunately a small percentage of dealers, despite the legal protections in place for consumers, are as bad as the reputation suggests.

Buying through a private sale

The pros:
With private sales you can get a really good bargain, and there's often lots of room for negotiation. But there are many pitfalls to be aware of.
The cons:
Private sales are not bound by the Consumer Guarantee's Act (CGA) and sellers are not required to give a history check (that would alert you to any red flags like the car still having an interested party which has the right to seize the car if the previous owner has not completed payments on it.)
With private sales, the car is sold "as is" and if it turns out to be a lemon, that's your bad luck. At the very least, buyers are encouraged to ask a mechanic to check over a car they're interested in buying.
You have to sort out the paperwork yourself.

What about when you use a car broker?

A car broker is impartial and independent. They work for the buyer not the seller, which means most of the cons that come with both private sales and car dealers are eliminated. Meanwhile, with a broker you still get the pros that come with private sales (a good price) and dealers (consumer protections).
Car brokers are not bound by sales targets. It's their job to find you a good quality car that best suits your needs and negotiate the best price for you.