General Buying Information

How to Buy Cars Wholesale


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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.

What Is Wholesale?

Not long ago, wholesale price used to simply mean the dealer's cost, and there were price guides such as those offered by the National Automobile Dealers Association (NADA) and Kelly Blue Book (KBB) that referenced the wholesale and retail pricing of all vehicles. These, however, these were only available to car dealers and considered insider knowledge. Nowadays though, they each have websites available to the public at http://www.nada.com and http://www.kbb.com that provide this information. On the other hand, shoppers who like to get pricing, reviews and auto specs all at one place should visit CarsDirect or Autos.com for one stop shopping. A quick note, however, is that "wholesale" normally refers to used cars while the term "dealer cost" refers to new cars. They mean the same thing, but the difference is worth noting when trying to apply the information you have gathered.

Where to Buy Vehicles at Wholesale

Now that you have all the pricing information in hand, the mission is to buy a car at wholesale. While the access to vehicle pricing information has become accessible, the places to apply it have not. Dealers nationwide attend auctions to buy and sell inventory. These auctions are also usually closed auctions, meaning not open to the general public. There are even auctions that are only open to new car dealers where car manufacturers hold auctions to sell fleet vehicles and vehicles coming off lease. You can apply to get your own dealer's license, however the process and requirements vary from state to state, so inquire at your local DMV to find out what your state's guidelines are. Typically the cost, requirements and time commitment far outweighs the savings you could expect on buying just one car. So unless you plan on doing this more than once or reselling to other dealers and buyers, your efforts may be better spent negotiating with a dealer or finding a private seller.

Should you be determined to use your new found pricing information, there are options for the general public to buy at, close to or even below wholesale. These options do not come without risks though, and many cars are sold as is with no warranties. If the car is a newer model then there is a chance that the manufacturer's warranty may still be in force, but this should be verified beforehand if it is a must for you.

Auto Auction Brokers

The first option is using what is called an auto auction broker. These entities are companies that have dealer licenses which allow them to attend auctions that are closed to the general public. They typically charge a flat fee to source a vehicle for a buyer at one of the many auctions they attend. How long it will take to obtain a vehicle for you depends on availability and how flexible you are with vehicle specifications. Usually the buyer is contacted by the auction broker by phone from the auction to advise the buyer when there is a car matching his or her requirements. Procedures and pricing will vary from broker to broker, so be sure to shop around, not only for pricing but also for a broker you feel comfortable with. Note that most brokers are not supposed to sell to other dealers and not the general public, so don't expect any warranty assistance from them. Some brokers are licensed to sell vehicles to both dealers and the general public and this may be something you may want to inquire about depending on your comfort level. A quick Google search of "auto auction brokers"will produce an array of companies to choose from.

Public Car Auctions

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.

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