Craigslist can get you a great deal on a used car: if you're going to buy one as-is, there's no need to pay the dealership markup. With that said, in my area the Craigslist listings for vehicles is packed mostly with unlicensed dealers who are masquerading as private parties. Some of them are even blatant enough to line up several cars they have for sale and photograph them all at once.
I would be wary of this sort of activity, since there's no telling where these people get their cars. For all I know, they could be buying junkers, putting a coat of paint on them, and flipping them. The best way to avoid these dealers is to:
- Run a search on the phone number / email address and see if it appears in any other for-sale listings
- Look for listings with similar wording
- Check an NVMTIS provider to see how long they have owned the vehicle
- When you call, inquire about "the car" they have for sale—if they ask, "which one?" walk away.
With that said, the existing dealership industry has every incentive to try and block smaller competitors. A major campaign to eliminate these unlicensed dealers is backed by a group which "manages access" to wholesale auctions to shut out buyers who aren't licensed car dealers. Presumably, if a smaller outfit could buy cars from one of these auctions, they'd be just as good as the ones a car dealership would sell.
When you get down to it, a car is a major purchase which carries with it an amount of financial risk that is difficult to quantify, or know, before you buy. They're typically sold by scum of all flavor who don't really care what you get stuck with. After all, why would someone sell a perfectly good car? If I was given a choice, I would rather not own a car.