A private sale of a car is when you purchase the auto directly from another individual who is the current owner of that car in a one-to-one transaction. A public auto auction is when many buyers and many sellers gather in one place to buy or sell many cars at the same time.
Imagine that one person owns a car that he wishes to sell. He advertises it in the local newspaper classifieds, perhaps, and then sells it to another person. This is a simple private auto sale.
Many companies run public auto auctions. Those who want to sell their auto and those who want to buy one gather at the arranged time and site. One by one the cars are offered for sale and potential buyers bid for each one. The highest bidder gets the car.
Usually a private auto sale will lead to a higher amount received by the seller. It might also lead to a lower price for the buyer. For there is no fee going to an auction company. These fees can be as much as 60 percent of the auction price for a clunker to 4 percent for a late-model auto. However, a private auto sale can take much longer: it's not the time spent advertising it, rather the time spent waiting for a buyer to respond.
Because of the fees that must be paid an auto auction can lead to a lower price for the seller and also a higher price to the buyer. However, the value of an auction is that you are almost certain that the car will sell that day rather than having to wait for a private buyer.
Deciding whether to go with a private sale or a public auction to sell your car largely depends on which you value most: time or money.
