Buying privately or from a dealer: what the difference costs

A dealer's price is calculated, not felt. It contains the buying price, the preparation, the capital tied up in the car while it stands on the forecourt, the rent for that forecourt, the cost of the advert, and a reserve for the faults he will answer for after handover. That last item is the biggest, and it is also the only one that cannot be negotiated away.

With a private seller none of those items exists. His price is what one individual wants for their car, adjusted for what they have seen in comparable adverts. That is why the private market has a wider spread: there are cars well below value because someone is up against a deadline, and cars well above it because someone is selling memories along with the metal.

The difference can only be weighed against a concrete risk, not against a feeling. The usable question is: what would the most expensive realistic repair on this car cost over the next few months — clutch, turbocharger, automatic gearbox, on an electric car the on-board charger — and how does the gap between the two prices compare with that?

In most European legal systems a commercial seller is liable to a private buyer for defects already present at handover, and cannot fully contract that liability away when the buyer is a consumer. A private seller may exclude it in the contract, and in practice nearly every one does. The difference between statutory liability, a warranty and goodwill is a subject of its own and has its own article; here only the consequence for the price matters.

The exclusion in a private contract is not a blank cheque, though. It does not cover what was expressly assured — “no accident damage”, “mileage as shown”, “cambelt done” — and it does not cover deliberate concealment. That is why any assurance that matters to you is worth more in the contract than any amount of reassurance on the phone.

In practice: buying privately, you carry the first months yourself. Anyone who plans for that sets aside part of what they saved instead of spending it — and thereby buys the same security the dealer prices in, only self-administered.

Between two cars both advertised as prepared, the difference can run into four figures. One was washed, cleaned inside and polished; on the other, brakes, tyres, the service and whatever the next official inspection would have flagged were dealt with as well. Both businesses use the same word, because it has no protected meaning.

So ask for the preparation invoice, or at least for the list of work with date and mileage. A business that has done the work is happy to show it — it is their argument for the price. One that dodges the question has polished.

Two points are worth particular attention: whether the service was done to the maker's schedule and entered in the book, and whether the next official inspection is fresh or imminent. Both are appointments that would otherwise land on you after the purchase, and both cost the business less than they cost you.

A private seller has usually driven what he is selling. He knows when the car sat unused over winter, which noise has been there since spring, whether the air conditioning still cooled last summer. That information is valuable, and you only get it by asking openly rather than interrogating.

A dealer has usually not driven what he is selling. He knows the file: where it came from, the condition report, what his workshop did. Asking him how it drives gets you nothing; asking him about provenance, the previous keeper, the inspection report and the preparation gets you everything.

Three things do not exist in a private sale: taking your old car in part exchange, financing from a single source, and a warranty policy on the used car. All three have a price, and all three are easier to judge if you look at them separately.

On the part exchange, the same rule applies as in any negotiation: settle the purchase price first, then talk about your own car. Negotiate both at once and you are negotiating a single number the dealer can split across two lines as he pleases. And if you know beforehand what your car would fetch privately, you can put a figure on the convenience discount instead of guessing at it.

A used-car warranty is an insurance product, not a promise. What matters is not its duration or its name but three things: which components are listed, which are expressly excluded, and what servicing conditions you have to meet for it to respond at all. Read the terms booklet before you count its value into the purchase price.

A commercial seller issues an invoice, a private one a contract of sale. For a private buyer staying in the same country that is at first only a difference of form. The moment a business buys, or the car crosses a border, it becomes a difference with consequences — because of VAT.

Used cars are often sold by dealers under a margin scheme: the basis of assessment is then not the full sale price but the spread between purchase and sale, and no tax is shown separately on the invoice. Under the standard scheme it is shown, and a VAT-registered buyer can reclaim it. Which applies is stated on the invoice; which rate applies is a question for the tax administration of the country concerned and nobody else.

For a private buyer the distinction matters when the car is being imported: on import into a non-EU country, import tax is assessed on the value of the vehicle regardless of how the seller accounted for it at home. What that means in detail is set out in the country import guide.

Searching across Europe pays precisely because the gap between private and trade is not the same everywhere, and because the same equipment is valued differently depending on the market it comes from. All-wheel drive, a tow bar and an auxiliary heater cost more where they are needed and less where nobody looks for them.

Buying across borders, though, the type of seller matters more than at home. A dealer knows the export routine, deregisters the car, issues an invoice, is familiar with temporary plates and has the paperwork complete. A private seller abroad is doing all of it for the first time — and so are you.

What applies in both cases: the certificate of conformity and the complete registration document decide how straightforward registration will be at the other end. Ask about them before you travel, not after. Carvexia is not a party to any of this — the marketplace brings the listings together; you conclude the contract yourself.

The older and cheaper the car, the less the dealer premium buys. Past ten years old, statutory liability is hard to enforce in practice, because almost any fault can be presented as wear — at that point the premium mainly buys convenience.

The younger, more complex and more expensive the car, the more it does buy. On a four-year-old car with a dual-clutch gearbox, air suspension or a large traction battery, a single failure can easily cost as much as the entire gap to the private offer.