In your hunt for your new (to you) car, you've considered some dealership offerings, but you've also noticed that privately-advertised (i.e. not from any dealer, but from private individuals) offerings are significantly less expensive. Let's look at the advantages and disadvantages of buying a car privately.
The biggest reason is cost
Privately-sold vehicles are (with very few exceptions) less expensive than similar cars on dealership floors, because private sellers don't have to cover the overhead costs of running a dealership. It's a win-win situation: the seller will reach a higher price than if they traded in the vehicle, and the buyer gets a vehicle for less than the typical showroom sticker.
It's also an atmosphere which is more conducive to negotiation – the allure of a quick, effortless transaction means that the seller might be more willing to come to a compromise regarding the price. Buyers, for their part, will enjoy a more relaxed environment, without the perceived pressure of having to deal with a sales representative.
You'll learn more about the car
Direct interaction between you and the buyer will reveal a more-detailed picture of the car's history. While dealerships and private sellers are equally obliged to inform buyers of the vehicle's defects, you'll better be able to judge the car's usage-, maintenance-, and service history, before deciding if it is the right choice for you.
Take care
There are however some hazards with buying privately. Of primary importance is personal safety – criminals will do anything to lay their hands on your money (or your current car), so always arrange to view the car in a public location. Never go alone: take a friend or two along as bodyguards, just in case the seller has ulterior motives.
By the same token, there's always a risk that the car's documentation might be forged. At the first viewing, take photos of the car's license disk (or certificate of registration, if immediately available), and take this info to a testing station (or check out an online service such as vehiclecheck.co.za) to ensure that the car isn't stolen or an accident-damaged rebuild.
It's cash (or EFT) only, and you will have to do some things yourself
Banks do not finance private vehicle sales, so the only way is to pay cash or via electronic fund transfer. If you don't have the funds at hand, you'll need to arrange a personal loan in advance. There's likewise no option of the extended warranty or service plans you might get at a dealer, so it's up to you to decide that the car is in the condition you need it to be.
If at all possible, have the vehicle inspected at an independent testing centre for mechanical issues and bodywork damage prior to purchase (they might even issue the certificate of roadworthiness while they're busy). While the Consumer Protection Act (CPA) does afford you some recourse if the vehicle isn't in sound condition, enforcing it after purchase is a difficult and protracted process. Furthermore, the onus rests on the buyer to obtain the certificate of roadworthiness, and to register the vehicle.
There are some potential pitfalls when buying a car privately, but provided you proceed with due caution, there's also a lot of potential to get a real bargain. If you're after the absolute most car for the money, a private transaction may just give you exactly what you need at a very good price. But as always, caveat emptor – buyer, beware!
