In the interest of full disclosure, I work at a dealership...
ON PRIVATE SALES:
Sometimes a "too good to be true" private sale has a few skeletons in the closet that show themselves once it's too late. Check your state/country's "lemon laws" to protect yourself as a buyer. Beware that a private sale, though, is generally considered "as is" in the eyes of the court, even if the seller lies to you. It's brutal, I know.
Keep in mind, too, that a little spit shine can go a long way to making a bike with a serious problem (or 2, or 20) look really good. Beware anyone that will not let you test ride.
If you go in there with your eyes wide open and know what to look for, you can find incredible deals on private sales, especially on a "fixer upper." I bought my scooter for $400, but it really wasn't running. Thankfully, it only took me about $100 to get it running, so I made out good. Sometimes the "it ran when I last parked it" doesn't just mean the carb is gummed up from sitting. Sometimes they parked it, because the last time it "ran" it made a horrible noise and stopped running. So, again, "buyer beware" on picking up a project. You may find yourself needing to rebuild the bottom end, or the transmission.
Sometimes, though, you'll get super lucky and find a private seller who has other reasons (other than mechanical) for wanting to urgently get rid of a bike. Financial issues, change in job or family (marriage, new baby, etc.), and so forth. Those are generally excellent deals, especially if the bike is well maintained. Beware if there is a lean on the bike. Be sure their paperwork is in order. See how they've maintained the bike. You will probably make out very, very well.
ON DEALERSHIPS:
You will have more legal recourse on a sour purchase. You will know the bike is sound and passes inspection. You will have all the paperwork in order. Price will be somewhat negotiable, but will obviously be higher than a private sale. Bike will be prepped and ready to ride, needing nothing. You will have the option to finance.
If you don't have your heart set on one particular bike, ask which ones they'd be more willing to work with you on. There may be models that have been there a while that they're sick of looking at, so to speak. Warranties vary dealer to dealer. Factory warranties are awesome (I've used my Kawasaki one), but are generally only offered on new purchases. For used, some dealers will have better warranties than others. If you've never purchased a vehicle from a dealer before, have an experienced friend/family go with you. You can end up being fed to the lions if you don't know what to say no to and what not to pass up.
