Shopping for a new car is exciting… but not always easy.
While your parents might have gone to a local dealership and driven a car off the lot, you’ve got plenty more options. As well as new and used car dealers, there are private sellers online, auction houses and a growing number of online platforms.
If all those options feel a little overwhelming… we agree!
That’s why we’re going to break down the pros and cons of each car buying option. That way, you can make an informed decision based on your budget, risk appetite, and how much time you’re willing to invest.
But remember, no matter which path you choose, the award-winning team from Fido Finance is here to guide you and help you find the right loan, tailored to your needs.
So, which path is best for you? Let’s take a closer look at your options.
Table of Contents
Option #1: Buying from a private seller
Buying privately is a popular choice when you want to stretch your budget as far as possible – whether you’re buying your first car or upgrading the family wheels.
Since private sellers don’t have the overheads of a dealership (there’s no need for a fancy showroom rent, staff wages, or compliance costs), there’s a good chance you can secure a vehicle at a more affordable price.
And, since you’re dealing with someone who wants to offload their car, you’ll often find private sellers are more flexible and open to negotiation.
Advantages
✅ Lower Prices: No overheads usually (but not always) mean lower asking prices.
✅ Negotiations: There’s a better chance of flexible pricing if you’re on a budget.
✅ Low Pressure: You avoid sales KPIs, pressure, and unnecessary upsells.
✅ Direct Insight: Get a genuine history from someone who drove the car daily.
Potential Drawbacks
❌ No Safety Net: No warranty or cooling-off period if something goes wrong.
❌ Paperwork: You handle all vehicle registration to transfer the car to your name.
❌ Higher Risk: There’s more risk if you don’t know what issues to look out for.
FIDO SAYS: If you go private, due diligence is always a good idea, whether it’s an inspection from a mechanic or a test drive. Also, a search of the Personal Property Securities Register (PPSR) costs as little as $2. It provides valuable info about any financing owing on the car, previous write-offs, or recalls.
Option #2: Buying from a dealership
NOT SO HOT TAKE: Buying a car can be stressful and one of the most expensive purchases you’ll make, so naturally you don’t want to be ripped off.
That’s why buying from a dealership is so popular. It’s structured, comes with built-in protection, and doesn’t leave you to do all the heavy lifting with paperwork.
Keep in mind, these peace of mind advantages typically come with higher prices than finding someone on Facebook and buying their car. But if you’re worried about hidden mechanical problems, rego issues and generally getting scammed, it’s worth thinking whether peace of mind is worth paying a little extra.
Advantages
✅ Legal Protection: You’re protected by cooling-off periods and warranties.
✅ Less Paperwork: Dealers handle all registration and transfer paperwork for you.
✅ Quality Assurance: Dealer vehicles are typically inspected and repaired (if needed).
Potential Drawbacks
❌ Higher Prices: Dealership overheads and warranties mean higher prices.
❌ Less Negotiation: Dealers know the market so there’s less wiggle room on price.
❌ Pressure and Upsells: Be ready to deal with high-pressure sales tactics.
FIDO SAYS: Car dealers can make the process of buying a new or used car more straightforward than a private sale. The trade-off is that you pay more for the quality and convenience. That means less chance of buying a lemon, but likely paying more for the vehicle you choose.
Option #3: Buying at auction
Buying a car at an auction can feel like something from a movie, but vehicle auctions have surged in popularity recently offering the potential for excellent value.
At the same time, buying a car at an auction comes with the highest level of risk.
Since you’re usually not able to take the car for a test drive or have a mechanic look under the hood, you carry all the risk. That’s why vehicle auctions are best suited for those with a strong car knowledge or buyers happy to take on extra risk to snap up a bargain.
Advantages
✅ Lowest Prices: Expect bargains for repossessed cars, or those needing fixes.
✅ Fast and Transparent: Sales are quick, structured, and transparent.
✅ Large Selection: A huge variety of makes, models, and specialised vehicles.
Potential Drawbacks
❌ No Test Drives: You can probably start the engine, but not hit the road for a test.
❌ Limited Inspection: Short windows for inspection can be a huge lucky dip.
❌ Sold “As Is”: There’s likely no warranty so you’re responsible for fixing any faults.
FIDO SAYS: It helps to know the make, model and year of the vehicle you want. That way, you can research its market value and set a maximum price so you don’t overpay. Also, remember that the bidding win isn’t always the final price since you’ll need to factor in any extra fees (like registration, stamp duty and processing costs).
Option #4: Buying through online platforms
You already shop and order food online, so why not buy a car online too?
Technology, stronger payment security, and vehicle delivery services have all helped bridge the gap between private sellers and traditional dealerships. This has led to the rise of verified platforms like CarSales or dedicated online-only vendors who sell vehicles without a showroom floor or a single test drive.
This path is the perfect middle ground for convenience-focused buyers, as long as you stick to verified platforms and prioritise platforms with solid consumer protections.
Advantages
✅ Huge Selection: Shop for cars nationally, not just in your local suburb.
✅ Convenience: Browse and negotiate from the couch, on your schedule.
✅ Some Protection: Some platforms arrange delivery or offer warranties.
Potential Drawbacks
❌ Inconsistent Protections: Consumer protections vary across platforms.
❌ 100% Online: You might not see or test drive the car until after you’ve bought it.
❌ Scams Still Exist: Big marketplaces still have fraudulent listings & dodgy sellers
FIDO SAYS: Like any online purchase, if it seems too good to be true… it probably is. If the price is super low or the seller pushes for urgent or unusual payment methods, trust your gut and beware of scams.
Comparing your options
|
Feature
|
Private Seller
|
Dealership
|
Auction
|
Online Platform
|
|---|---|---|---|---|
|
Price
|
Typically Lowest
|
Typically
Highest
|
Potential for Lower Price
|
Competitive/Mid-Range Price
|
|
Negotiation
|
Highest Wiggle Room
|
Lowest Wiggle Room
|
None (Set by bidding)
|
Moderate (Online haggling)
|
|
Legal Protection
|
Lowest (Buyer beware)
|
Highest (Statutory warranty)
|
Very Low (Sold ‘as is’)
|
Inconsistent (Platform dependent)
|
|
Convenience
|
Lowest (Plenty of paperwork)
|
Highest (Everything done for you)
|
Low
|
High
|
|
Warranty
|
Rare/Non existent
|
Yes
|
None
|
May Be Offered by Platform
|
|
Risk Level
|
High
|
Low
|
Very High
|
Moderate
|
|
Best For
|
Value Seekers (E.g. Tradies or young professionals)
|
Peace-of-Mind Buyers (E.g. Growing families or first-time buyers)
|
High-Risk Buyers (Mechanically savvy)
|
Convenience Focused Buyers
|
Let’s talk about financing options…
No matter which car buying path you choose, you’ll need to sort out your finances.
Here’s the short and sharp version to bookmark, screenshot or scribble on the back of a napkin. 👇
- Dealers offer in-house financing that can look quick and easy, but your options are limited and likely not the most competitive, so you may end up locked into expensive dealership financing .
Stuck with an expensive car loan?
Find out how to switch out your loan and enjoy better terms.
- Auctions and private sellers don’t offer finance, full stop. That means you’ll need significant cash on hand sorted out and available in advance, which isn’t always easy or practical.
At Fido Finance, we remove these common obstacles by comparing loan options from over 30+ bank and non-bank lenders so you can secure competitive finance instead of default dealership rates.
We can also help you secure pre-approval before you go car shopping so you can confidently pull the trigger, whether you’re sitting in a dealership or messaging a friend of a friend on Facebook.
Ready for a loan with the lowest repayments and the best rates?
Chat with our award-winning team to discuss your financing options, or call us at
13 FIDO (13 34 36).
