I have to confess with both my 2 current mares I didn't have them vetted, BUT they essentially came to me as freebies/rescue cases and I knew their owners personally so to an extent they were known quantities (warts and all) and I was as sure as I could be nothing was being hidden - as it is both have had fairly expensive health problems since, albeit things that wouldn't necessarily have shown up on a vetting anyway - even a 5 stage vetting won't reveal everything that could come up, they are just a snapshot in time and don't for example include as standard xrays, scope for ulcers etc. (if you were buying a £50k eventer you would have these done at extra cost but probably overkill for a happy hacker).
That being said, I would always 100% advise anyone purchasing a horse to have it at least 2 stage/basic vetted, preferably 5 stage, even if you are buying from a reputable seller. I wouldn't say it makes a difference if buying from a dealer or a private seller, there are honest and dishonest people in both spheres as well as those who are plain old incompetent or ignorant and will unintentionally mislead you, so no, I would never simply trust someone I don't know well (even if they come recommended or have a good reputation). Dealers are usually more professional and may be more experienced at spotting problems like mild lameness I suppose, and if buying from a business rather than an individual you do have a degree more protection in returning a horse 'not as described' if you discover a significant health problem after the purchase but TBH by that time it's too late, you are already in a stressful and potentially dangerous situation. The vast majority of dangerous behaviours in horses (e.g. bucking, rearing, bolting) are usually caused by pain issues, and this is particularly the case in the very alarming cases where the behaviour suddenly starts in a previously safe and well behaved animal that is sound and healthy to the 'lay person' /non vet's eye. So, both for my own safety and the horses welfare, I would always always want to know about any potential health problems well in advance of any purchase so I can then make an informed decision and take appropriate measures if there is something wrong. Also, one of the advantages of the 5 stage is it includes blood tests which discourage unscruplous sellers from bute-ing or sedating a horse with known problems so they behave/appear sound at the vetting.
Cost wise we are talking (I think, it's been a while), something like £150-200 for a basic 3 stage vetting and £250-300 for the 5 stage, so not a huge outlay really even if you are buying the horse cheap and certainly it will seem a bargain if it prevents you from buying a horse which completely breaks down or comes down with a condition costing ££££ to fix the week you get it home - vets bill for horses run into the 4 figures alarmingly quickly - insurance is vital too of course but you will find it easier to get a good premium if you have the horse vetted...