Facebook Marketplace has become a popular place for people to buy and sell used cars. Many sellers list their vehicles at prices significantly below market value. This can leave buyers wondering, why are cars so cheap on Facebook Marketplace?
Lower Prices Due to Direct Sales
One of the main reasons cars tend to be cheaper on Facebook Marketplace is that most sales are direct, person-to-person transactions. Sellers on Marketplace are regular people trying to offload an extra car, not professional car dealerships trying to make a profit.
When you buy a used car from a dealership, the price is marked up to account for the dealer’s overhead, commissions, licensing, test drives, repairs and refurbishing. The dealer needs to make a certain minimum amount per car to stay profitable.
Private sellers on Facebook don’t have this overhead. They are often just trying to recoup some money for a car they no longer need. The prices they list are based more on getting a quick sale than turning a business profit.
Dealerships Have More Costs
Here are some of the costs that dedicated car dealerships have to account for that allow them to sell vehicles for higher prices:
- Rent/mortgage on dealership property
- Mechanic staff and auto services
- Advertising and marketing
- Commissions for salespeople
- Business inventory taxes
- Administrative staff
- Licensing fees
- Office supplies, furniture, utilities, etc.
Without these expenses, private sellers can afford to list their cars at lower prices on Marketplace while still potentially making a decent profit.
Less Stringent Standards
Another factor that allows Marketplace sellers to list cars cheaply is that they often don’t thoroughly inspect or recondition vehicles before selling them. Dealerships will put significant money and effort into getting their cars sale-ready.
Used car dealers will usually:
- Complete a full mechanical inspection and repairs
- Detail the exterior and interior
- Resolve issues flagged on vehicle history reports
- Address recalls or required maintenance
- Validate proper documentation is present
- Offer vehicle warranties and guarantees
Private sellers may choose to skip many of these steps in order to save money and sell more cheaply. However, this means the buyer takes on more risk and may need to address maintenance or repairs down the road.
Risks of Buying from Private Sellers
Here are some of the risks associated with purchasing a more affordable car from an individual on Facebook:
- No ability to thoroughly test drive or inspect
- Possibility of undisclosed mechanical issues
- No dealer warranty or lemon law protection
- No financing offers
- No support addressing problems later on
Ways Sellers Reduce Costs
If a car is listed at an unusually low price on Facebook Marketplace, these are some steps the seller may have skipped to offer the car cheaply:
Skipping Detailed Cleaning
Having a car fully detailed can easily cost $150 or more. Many Marketplace sellers avoid this upfront cost and sell vehicles as-is.
Ignoring Minor Repairs
Sellers may not fix things like worn tires, squeaky brakes, noisy belts, leaky gaskets or failing shocks. Repairing these issues all adds up.
No Mechanical Inspection
Paying for a pre-sale inspection, fluids check and test drive from a mechanic helps spot issues, but costs money upfront.
No Title Verification
Properly verifying clean title status, validating VIN and checking accident history takes time and sometimes fees. Sellers often skip this.
No Safety Certification
Getting a used car certified road worthy with new brakes, tires, lights etc. can cost hundreds of dollars that sellers look to avoid.
Rushing the Sale
Dealers invest in advertising and hold cars for test drives. Sellers on Marketplace often push for a quick sale without letting potential buyers fully vet the car.
Asking the Right Questions
To make sure you don’t overpay or end up with a problem car, ask these key questions before purchasing a cheap car on Facebook:
Has the car passed a recent safety inspection?
Ideally it should have an official certification from within the past 60-90 days. This ensures critical components like brakes and lights meet minimum guidelines.
What maintenance records are available?
Ask to see a full maintenance history printout from the seller. Matching records will give you insight into how well the vehicle has been cared for.
Who was the previous owner?
Learn more about the previous owner if possible. For example, was it owned by an older driver who highway mileage only? Or someone who beat the car up?
Has it been in any accidents?
Request to see a vehicle history report from Carfax or another provider. Make sure it shows no collision damage or major repairs.
Can you take it for a pre-purchase inspection?
A trusted mechanic should fully inspect the car before buying and test drive it. This will catch any issues the seller didn’t disclose.
Other Red Flags
Watch out for these other warning signs when evaluating inexpensive car listings on Facebook:
- Very low miles for the model year
- Heap of mods and custom upgrades
- Sellers who seem evasive or in a hurry
- Cars priced well below market value
- Odometer tampering or mismatching numbers
- No vehicle title present
Safety Tips
Follow these tips when arranging to see vehicles listed on Facebook Marketplace:
- Meet in a public place like a bank parking lot
- Bring someone with you when test driving
- Don’t purchase if the seller refuses a pre-purchase inspection
- Thoroughly examine the title, registration, VIN, etc.
- Trust your instincts – if something seems off, walk away
The Tradeoff of Cheaper Prices
There are legitimate reasons why many cars are substantially cheaper on Facebook Marketplace compared to dealerships. Sellers lack overhead and often invest little into reconditioning their vehicles.
However, the tradeoff is that buyers take on more risk and may need to put in maintenance and repairs down the line. Still, for buyers on a tight budget, Marketplace can be a great place to score an affordable car – with the right precautions taken.
Conclusion
In summary, used cars tend to be listed at lower prices on Facebook Marketplace for several key reasons:
- Private sellers don’t have business overhead and expenses
- Vehicles often don’t undergo thorough inspection and refurbishing
- Sellers can reduce costs by skipping repairs and preparation
- Cars may have undisclosed issues the buyer inherits
However, there are steps buyers can take to protect themselves, like asking key questions, having a mechanic inspect the car and watching for red flags. Overall, Marketplace offers a unique opportunity to get an affordable used car, if buyers are smart about evaluating listings.