8 Tips for Buying New or Used Wholesale Cars
Get Wholesale Pricing Without a Lot of Hassle
Even if you aren’t a dealer, you can still score wholesale cars. It might take a little extra work, but it’s possible to save big on your next new or used car purchase simply by taking the right steps.
What are Wholesale Cars?
Wholesale cars are the vehicles a dealer purchases from a manufacturer or at auction. Then, that same dealer marks up the price of the car and sells it to the public. To get your best price on any new or used car, you want to attempt to purchase it at wholesale prices.
This process is going to require some research and time, but it’s well worth it when you see the savings.The other thing to note is that you can use the same tips whether you are interested in purchasing new wholesale cars or pre-owned.
Tip #1 – Gather Information about the Car
Your first step to purchasing wholesale cars is to do plenty of research. If you know the car you are interested in, you need to collect as much data on it as possible. This includes the engine size, wheel package, trim options, mileage, and features. The more you can learn about the wholesale used car, the more accurate you’ll be when figuring out the wholesale price.
Then, turn to one of the many online guides which provide you the information you need. Simply input the data you’ve collected and use a resource such as Kelley Blue Book, NADAguides, or Edmunds to figure out the wholesale price.
Tip #2 – Find the Dealer Willing to Sell at Wholesale Price
Your next step is to find a dealer who is willing to sell you the vehicle at wholesale pricing. If you plan to buy that brand new vehicle that is highly desired right now, you aren’t going to get it for much less than sticker price. Those cars are going for thousands over the invoice price just because of the demand.
Start by learning the invoice pricing of the car you want by using the guides given to you above. This is what the dealership pays to get the vehicle from the manufacturer. It’s determined by adding the base price and additional cost of accessories.
There might be some other costs to factor in as well. These could be shipping costs, dealer preparation costs and other services that are performed to the vehicle before putting it on the lot. Once you have all this information, you can talk to the dealer about getting the car close to invoice price.
It’s important that you know dealers throughout the country all pay the same invoice pricing. It doesn’t matter where you are; if you can figure out the price the dealer paid, it will be the same across the board.
Tip #3 – Research Rebates and Incentives
You are also going to want to research any rebates or available incentives on the vehicle. These allow some wiggle room for the dealer to further discount the car. As an example, if you are looking at purchasing a truck with a $35,000 price tag and a $31,000 wholesale invoice price. The dealer might have a $3,000 incentive on that truck for the sale. That means the true cost to the dealer is more like $28,000.
There are often incentives to dealers for selling so many vehicles or paying in a certain time frame. They can be as much as 15% of the MSRP, so the dealers still make a profit even when selling wholesale cars to you at invoice cost.
You want to apply as many of the discounts and incentives to your vehicle as you can so the price comes down. The only thing you can’t factor in is your trade-in value.
Tip #4 – Contact Other Dealers – Negotiate Prices
If you are planning to purchase a wholesale new car from the dealer, you have to do a little more legwork. That’s because you have multiple dealers in your area with the same vehicle. It makes sense for you to do as much negotiating as possible so you score the best deal.
Reach out to multiple dealers and ask them for the best cash price on your vehicle. You might have better luck talking to the Internet department because many dealers have further incentives for sales made through them. They are also interested in getting cars sold at volume, so they are more willing to negotiate.
When you find your lowest price wholesale car, call that dealer back and let them know that you are shopping around. Tell them they are in the running, but you wanted to know if there were any last minute deals they could work out.
Once you get that final price from them, be sure to get a copy of the invoice. Then, make one final comparison with the other dealers and buy your lowest option.
Tip #5 – Buy at the End of a Model Year
The best time to purchase a new car is at the end of the model year. The closer it gets to this time, the lower the price will go. It’s true that end-of-year deals don’t always pan out the way you hope, but you are still more likely to get wholesaling pricing during this period.
Tip #6 – Attend a Wholesale Car Auction
If you know someone with a dealer license, they can attend special auctions in the state to purchase wholesale used cars. Sometimes, they also sell off close to new and off-lease vehicles as well. When you attend a wholesale car auction, you may even come in below your budgeted pricing.
You also want to check with your local bank to see if they are currently selling any repossessed vehicles as you can often get deals better than wholesale this way.
If you have no way to attend a wholesale car auction, you might want to consider the possibility of purchasing on eBay instead. Bidding is similar to that of an auction and sometimes you can land a pretty sweet deal. Just make sure you know what you’re buying.
Tip #7 – Ask Lots of Questions
The key to talking to any wholesale car dealers is to have questions ready. This should include things such as the condition of the vehicle, the CarFax report, what the history of repairs and maintenance has been and even the possibility of getting an extended warranty.
If you are purchasing wholesale vehicles in colder climates, make sure you inspect it for rust and winter-weather damage. Taking the time to ask questions and understand the vehicle better, gives you a leg up on wholesale auto sales.
Tip # 8 – Don’t Forget About Dealer Holdback
If you are feeling guilty about pocketing all the incentive money when looking at wholesale trucks, you have nothing to worry about! The dealer might give you all the incentives and invoice pricing, but they are still going to make a profit.
That’s because car dealers often receive a portion of the price after the car sells. This additional payment is called a “holdback.”
This can be as much as 3% off the sticker price, so you don’t need to worry about purchasing wholesales cars direct.
Because the dealer is getting back this money, they sometimes won’t mind passing that off to you either. If they are more concerned with getting their financials out of the red, they might negate this as part of the invoice as well.
Want to Get Involved in Auto Wholesale?
If you’ve thought about making a profit and offering wholesales cars for sale, there are some things you should know.
Make sure you have the right licensing. Some states have requirements that wholesale car dealers need a license to operate. While you might not be required to have this, having the right licenses will cut down on fees and taxes. For more information, be sure you talk to your local DMV before selling.
You can attend dealer auctions with the proper credentials. Most auctions aren’t available to the public, so you have ample opportunity to purchase cheap used cars for resale. There are many ways to find the auctions in your area. Start by asking established dealers first. Then, look online for wholesale auctions that might be near you. You might need to do a little traveling to get what you want, but you’ll be able to make a nice profit if you find the right vehicles.
Make sure you inspect every vehicle carefully. This is most important for those who want to resell wholesale cars because you’ll be the one having to answer to customers. If you sell vehicles that are defective, you are only hurting your own reputation in the business. It may also cost you money down the road as you make repairs to the cars. Print out a checklist of things you want to look for during the inspection process. Carry it with you and perform your due diligence. If you don’t feel comfortable with that, make sure you take a qualified mechanic with you.
Whatever you are planning to do with wholesale cars – buy or sell – there is a deal out there for you. Take your time, do your homework and make sure you know what you’re getting into.
Categories: List Articles