The most important purchase sources for automobiles: advantages and disadvantages (part 1)

Even if the demand for used cars has decreased somewhat at the moment, companies that deal in motor vehicles have to constantly acquire new used cars and renew their selection. The vehicles come from private individuals and companies with different orientations. The first part of this article presents three important acquisition sources and their respective advantages and disadvantages for retailers.

In a survey initiated by Buchbinder in 2022, it turned out that the majority of car dealers buy their used cars from private individuals. The main advantage here is the purchase price. It is obvious that this is usually lower than when purchasing from another trading company, for example, since private sellers do not plan a profit margin. In addition, non-professionals are sometimes not well informed about market prices or have poor negotiating skills, which means that cars can be bought for less than their actual value.

The disadvantage for trading companies is that the lack of knowledge of the market can also lead to private individuals miscalculating the price impact of defects in their vehicle and then not wanting to move away from their price, which is not in line with the market. This can be very annoying, especially if the dealer has accepted a longer journey to buy the vehicle.

Furthermore, the danger is relatively high that private sellers do not know about defects in their vehicle or hide them, so that the potential buyer must always take a very close look. In general, buying from private individuals is usually relatively time-consuming, since a journey is almost always necessary and only one vehicle can be purchased at a time.

Other car dealerships

Another large proportion of the survey participants stated that they buy used cars from other car dealerships. While this purchase is almost always more expensive than purchasing from a private vehicle owner, there are some advantages to purchasing from a commercial provider. One of them is that it is often possible to buy several vehicles in one trip. The prospective buyer thus saves time and effort, especially if he has previously informed himself well about the vehicles.

There is another advantage associated with this: since professionals in the motor trade know that they generally cannot fool other professionals by concealing defects, the risk of attempted fraud is lower. This risk is even lower if you keep buying from the same retailer and no "cheating" is to be expected simply out of interest in the good relationship.

Finally, a third advantage of buying from other dealers is that vehicle models that are particularly difficult to obtain in your own region, but which are currently in demand by your own customers, can often be procured here. In this case, it may be worthwhile going further with the buyer.

Leasing companies

Another source of purchasing used cars are leasing companies that offer returns from their leasing business. The advantage of these used cars is that the vehicles are mostly young: They are usually only between two and four years old. In addition, vehicles leased by private individuals are mostly in relatively good condition. This is because damage is billed to the lessee. Accordingly, private individuals handle the vehicle with care.

However, this statement does not apply to lease returns from companies, since the personnel using the vehicle are usually not sanctioned by the leasing company in the event of damage to the vehicle. In addition, the range of vehicles is typically smaller than in the case of private leasing returns, since companies usually only use particularly popular brands, models and model variants in their leasing fleet.

Regardless of the condition of the vehicle, a general plus point with this source of purchase is that damage is almost always well documented or even repaired. In addition, leasing returns are usually checked by an expert organization after the handover. This represents a further security for the prospective buyer.

Also read the second part of the article on the most important purchase channels and what car dealers should pay attention to.