Every year around eight million used cars change hands. While choosing which car is the right one is bewildering enough, working out where to buy your second-hand car can also be mind-boggling.
You can choose between franchised and independent dealers, car supermarkets, auctions, private sales – the latter through the classifieds and online auctions. Wherever you buy, make sure you read our blog on avoiding fraudsters as well as the one about 10 warning signs when buying a second-hand car. But not until you’ve read this blog, to pin down exactly where you should buy that used car.

Franchised dealers
If you want the ultimate in peace of mind, the franchised dealer is where you need to do your shopping. But as you’d expect there’s a catch – this is also the most expensive place to buy that second-hand motor.
Franchised dealers tend to have newer, lower-mileage cars up for grabs. Sometimes they’ll be pre-registered which means they’ve done a minimal mileage, so to all intents and purposes they’re new, but you won’t be the first registered keeper, so on paper it’s a used car.
Because of over-supply in the new car market, car makers and the franchised dealers that represent them have had to get ever more creative in recent years. As a result there are now lots of factory-backed approved used schemes, which tend to be full of cars that have been run by the car maker itself in some capacity.
These cars come with generous warranties and in many cases are barely run in. So while they tend to be relatively costly, you’re buying a car that should be as good as new.
Independent used car dealers
Slightly further down the pecking order are the used car dealers who aren’t tied to a particular brand. Their stock can come from auctions, private sellers or even franchised dealers who don’t always want to sell their trade-ins to their own punters, because they’re too old or have done too many miles.
Forget any notions of Arthur Daley types on bomb-site premises though, as the used car trade is rather more slick nowadays. Even the independents tend to sell cars that are in really good condition and because they’ve invested in premises and (hopefully) a decent reputation, they tend to look after their customers.
As with any trader selling used cars, by law anything you buy from them must come with a warranty. It’ll be provided by a third party though, with some providers offering better products than others. So before buying, make sure you know exactly what’s covered and what isn’t.
Used car supermarkets
Most traders tend to rely on making a decent profit margin on each of the cars they sell, but used car supermarkets go for volume instead. So they’ll sell huge numbers of used cars, making a relatively small profit on each one. Don’t let that stop you from haggling though; whatever the asking price on a car and wherever you’re buying it, make sure you try to chip something off the price.
Because of the number of sales the typical used car supermarket makes each month, a steady supply of cars is needed. These can come from auctions, although this is unlikely. What’s more typical is a direct supply from a car maker or a leasing company.
Because car makers tend to make more cars than they can sell, sometimes they dispose of surplus stock through used car supermarkets. If they’ve got too many examples of a run-out model those might also go to a supermarket, which is why sometimes you’ll find delivery cars for sale.
However, the more usual scenario is a supermarket will have a deal with a leasing company to acquire their ex-rental or ex-fleet cars at disposal time. As a result the quality of such cars can be hugely variable. They’ll often be well maintained, but they may well have been driven hard, especially in the case of ex-rental vehicles. The key is to check the registration document and see who owned the car before the supermarket acquired it.
Private sales
This is where the purchase costs start to drop significantly but there’s no comeback if you buy a lemon. Well, not unless the car has been misdescribed, and even then you’ll probably struggle to get your money back once you’ve driven away.
You should save a pile of cash compared with buying from a dealer, which should stand you in good stead if the car needs any repairs. Even if you have to fork out a few hundred quid in repairs after the purchase, you’ll probably have saved more than that by buying privately.
But private sellers have no reputation to protect, so while there are lots of bargains to be had when taking this route, you need to make sure that you’re buying a good car. To give yourself some protection, think about investing in a professional inspection before buying.
Auctions
If you want a serious bargain a car auction is where you need to go. But that bargain can turn into a money pit if you don’t know what you’re doing, so tread very carefully before bidding on anything.
We produced a complete guide to buying at auction recently, so for the full low-down on what you need to know, read that in full. The bottom line is that before you buy, be confident that you know what you’re doing, as there’s very little comeback in the event of problems.
Online auctions
Online auction sites have made selling cars easy, and there are some bargains to be had; sometimes a vendor just wants an easy sale, allowing you to scoop a great deal. But while many sellers are genuine, there will be scammers lurking, so you must be on your guard. For starters, be very wary about paying a deposit to someone you’ve never met.
The obvious rules apply; see how long they’ve been registered on the site, check their feedback and try to deal with them in person as much as possible. Before bidding, phone them, visit them to look at their car and ask plenty of searching questions. A genuine seller will be only too happy to help; a scammer will look for an easier target.
Richard Dredge
July 2015