How To Buy Used Cars Wholesale
Every dealer wants to have the best source to add stock to their inventory. Wholesale auctions allow them to find vehicles that are not available at conventional auto sales events where prices are different, and the competition is really big. The potential profit from a trade-in is bigger with wholesale auto sales.
how to buy used cars wholesale
The processes and trends related to wholesale auctions are not exactly on track since the beginning of 2020. The reason is obvious: the COVID-19 pandemic caused substantial damage to a lot of business sectors, including car sales.
Nobody wants to have cars in stock that are hard to sell. The price levels might go down as we speak, or they could remain at the same level. Since dealers are used to monitoring the situation day by day, the unreliable information they have on their disposal today is no good to them. Buyers would be happy to notice better deals are waiting for them.
The other key ingredient is the network of dealer contacts the biggest wholesalers have at their disposal. Sometimes, the auctioned vehicles are directly transferred from one dealer to another via the wholesale lot platform.
The wholesale auto auction world is changing because of the ease of access to all kinds of information we take for granted today. One could easily use the information found online to make a good offer or to finish a negotiation successfully.
While the traditional process of wholesaling vehicles relies on the above-mentioned relationships between a wholesaler and the dealers in their network, the new app-based solution offers that same network, if not bigger, with the touch of a button.
The app allows dealers to access an almost endless variety of wholesalers and dealers. This means that the traditional negotiation process is changed as well. Calling a number of details to find the one who needs your car and is willing to pay the asking price is also obsolete when using an app.
There are other ways in which technology has impacted wholesale car auctions as well. The online platforms supporting huge car databases, for example, are of great service to both dealers and independent buyers.
Regardless of whether you are a dealer, intending to buy or sell a vehicle at a wholesale car auction, or you want to use the broker services of a dealer, there are things you should consider doing before even thinking about bidding.
If an online wholesale auto auction allows, you should register as a buyer. Most of the big wholesale auctions, however, are accessible only by dealers and require having the relevant license. As we already mentioned, you could use them as your broker. Having a license is a great way to access the lowest offers and other advantages.
You should always be aware of your actual desire to buy a certain car. Bidding is a good idea only when you assess its condition and take all the other small details into account, instead of focusing on a certain aspect you like about it. If you feel like you cannot determine the wholesale value of a vehicle, you can always use the Kelly Blue Book (KBB) for reference.
Next, make sure you stick to your budget. Never bid when emotional as it could result in an unpleasant loss. If you decide to use a specialized online wholesale auto auction, you could avoid placing a high bid by setting the maximum and seeing what happens next. Here is a reminder: the final price of the car includes fees and taxes, meaning that the cost of ownership must be evaluated.
It is common knowledge that automobile dealerships buy cars wholesale at a price well below retail. Most shoppers want to know how they can pay as close to wholesale price as possible. This article will discuss the concept of vehicle wholesale pricing as well as where to shop for such deals.
Another option is to attend one of the many public car auctions that are out there. There is an opportunity to save substantial money depending on the popularity of the car. However, the cars often end up selling at close to retail because of the number of inexperienced bidders who get caught up in the auction excitement. There is usually ample time to inspect the cars prior to auction, and this time is well spent inspecting cars of interest and deciding on a maximum price as a guide for when the bidding begins. Public auctions move much more slowly than dealer auctions so plan on being there awhile as you wait for your prospects to cross the auction block. Be sure to listen carefully and be in view of the auctioneer or one of his assistants to insure your bid is accepted. There is a registration process at every auction so be sure to follow the guidelines to become a registered bidder. Each auction has an office dedicated to processing paperwork and assigning bidder numbers. Without a number or paddle you will not be able to bid.
A GDN is the basic dealer license that allows a person to buy, sell or exchange the type of used vehicle for which the GDN is issued. GDN licenses are divided into several categories. When applying for license, you must select one of the independent license types on the application. If you wish to have multiple types, you may submit multiple applications.
Independent Motor Vehicle - May buy, sell, or exchange any type of used cars, trucks, motor homes, and neighborhood vehicles. May buy, sell, repair, or rebuild salvage motor vehicles and nonrepairable motor vehicles. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on motor vehicles only. Must provide a bond.
Independent Motorcycle - May buy, sell, or exchange any type of used motorcycles, motor scooters or ATVs. May buy, sell, repair, or rebuild salvage motor vehicles and nonrepairable motor vehicles. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on motorcycles, motor scooters or ATVs only. Must provide a bond.
Travel Trailer - May buy, sell, or exchange used travel trailers. May buy, sell, repair, or rebuild salvage motor vehicles and nonrepairable motor vehicles. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on travel trailers only. Exempt from the security requirement.
Trailer/Semitrailer - May buy, sell, or exchange new or used utility trailers and/or semitrailers. May buy, sell, repair, or rebuild salvage motor vehicles and nonrepairable motor vehicles. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on trailers/semitrailers only. Exempt from the security requirement.
Wholesale Dealers - May sell or exchange vehicles only with other licensed dealers. Are NOT required to have a five-vehicle display area. May NOT sell vehicles to retail purchasers. Wholesale vehicle dealers may buy, sell, or exchange used vehicles, including motor vehicles, motorcycles, and travel trailers. May buy, sell, or exchange new or used trailers and/or semitrailers. May use temporary tags and metal dealer license plates. Must provide a bond.
Over the last few years there has been increasing disruption in the auction sector. More and more competitors are moving into the space in the form of online marketplaces hoping to take a share of the lucrative wholesale vehicle industry. Some dealers have been slow to embrace these new online marketplaces though, preferring to stick to the physical auctions they know and trust. Currently, as a result of the coronavirus, physical auctions are closed meaning dealers have no choice other than to buy online if they want to source inventory from an auction. Even the most reluctant dealers might actually find that they benefit tremendously from greater supply options beyond the traditional auctions. For those that are unfamiliar we have compiled a list of options below.
Dealers are likely most familiar with this method of sourcing online; even if they have never used simulcast themselves they have probably bid against someone using it while they were bidding in person, in-lane. ADESA, Manheim and Pipeline all offer simulcast bidding for their sales. Currently, in repsonse to the coronavirus, most auctions have switched to online only sales but some have halted all sales entirely. So, make sure that your preferred auction is still holding sales that you can participate in online and then spend a little time getting familiar with how the simulcast works. If you are new to it, it's advisable to watch a sale or two to learn the ropes before actually trying to successfully bid on vehicles that you do want. Manheim simulcast sales are accessible from the listings in the Carbly VIN scanner and you can also find more tips for buying online here.
In addition to their simulcast sales that allow live online participation for in-lane sales, each of the traditional auctions also offers an online option that hosts vehicles that are available 24/7 with buy it now pricing. By providing constant access to available wholesale inventory, these are fantastic options for dealers whose schedules don't align with the live sales or simply as a means of supplementing other sourcing channels. Buy it now pricing for these units can sometimes be a little steep but that isn't a reason not to make an offer on something that could work well for you on your lot. OVE, DealerBlock and Pipeline's Buy Now have vast numbers of vehicles available for purchase immediately. OVE listings are also included free for all Carbly VIN scanner customers.
There is an ever-growing list of these two-sided online only marketplaces that make it possible for dealers to list vehicles right from their lot and receive offers from other dealers in miuntes. Utlizing modern technology they make it very quick and easy for dealers to buy and sell wholesale vehicles without the cumbersome logistics of the traditional auctions. With varying price structures they can offer significant savings on both buy and sell fees.
ACV Auctions is another modern solution to the vehicle wholesale marketplace. Dealers use their platfrom to list vehicles from their own facilities while other dealers bid on them in 20 minute online sales. ACV also inspects the vehicles so that buyers benefit from detailed condition reports, including audio recordings of the engine running and detailed photos from the underside of the vehicle. Participating dealers can also take advantage of shipping, extended arbitration, financing and title managment. 041b061a72