How to Find the Wholesale Price of a Used Car?
Whenever it comes to the topic of buying cars, the idea of buying a used car always comes up. No matter how affluent the buyer is, it is always more profitable to buy a used car than to buy a completely new car. And when you are in the process of discussing used cars, it is very relevant to wonder how to get the best possible car at the least possible cost. And for businesses that buy and sell used cars, this question is even more relevant to find the wholesale price of a used car.
Wholesale prices of used cars create more chances for the used car sellers to make a better profit on the sale of individual cars. As buyers, knowing the wholesale price can help us control a successful negotiation process. And as a seller, this value can be used as a dealer cost, and any extra costs can be added to it when making a sale. But often, finding the wholesale price is quite tricky.
What Does Wholesale Price Mean?
The wholesale price of a vehicle is basically the price a car dealer is willing to pay when in the process of buying a number of cars from a manufacturer. In the case of used cars, the wholesale price refers to the amount a dealer pays in the auto auction for a cluster of different vehicles. This works the same way in the case of trade-in vehicles as well. The wholesale price becomes the base standard on which the selling price of the car is determined.
When you are a buyer looking for new cars in different dealerships, knowing the wholesale price of the chosen vehicle can put you in an advantageous position to make a good deal. On the other hand, this wholesale price becomes a chunk of the main cost of the car for the dealer. With some additional fees, costs, and profit percentages, they can determine the final price of the car.
Difference Between Wholesale and Retail Price
Retail price is the price you have to pay when you are buying a used car from a dealer. It works for cars that have been acquired by the dealership individually from different sellers. A lot of people sell their used cars these days. There are a lot of available dealerships and online platforms where anyone can list their used cars to sell for cash. These cars are then sold to potential buyers again. In these cases, these cars are sold by retail dealerships to individual consumers.
And when we talk about wholesale price, this price refers to the price paid by the dealer when purchasing the vehicles in bulk from used car auctions. There are a lot of auctions and impounds that are a great source of various types of cars in different conditions. Dealers buy these cars at wholesale value and then complete the necessary repairs before putting them up for sale. The final price is determined with the help of the base wholesale value of the car, along with any and all extra expenses of documentation, reconditioning, and profit.
How to Find the Wholesale Price of a Used Car
When cars are kept at police impounds that do not have any owner claims within a fixed time, they get put into auctions. And sometimes, totaled vehicles are also sold at auctions. For these cars, the acquiring price is quite low for the dealer, as most dealers and repairers buy these cars to resell later. The price they pay for the cars at the auctions is called the wholesale price.
Check the Book Value
Used cars do not have a factory invoice when sold by the dealers. So it is difficult to understand the true cost of the car. But the book value can help us understand the base value of the car before attempting to buy it. Book value can contain the type of the vehicle, licensing information, condition, mileage, etc., and data to figure out the approximate wholesale price of the car.
Consult Websites That Measure Wholesale Values
Websites like NADA (National Automobile Dealers Association) GUIDES and Kelley Blue Book are used to estimate the wholesale value of a vehicle. These sites take into consideration the available basic information about the car to give the most accurate value possible. According to KBB, the evaluation process depends on three aspects of the vehicles:
- Condition of the car: The current condition of the used car impacts the value of the car. Depending on the vehicle history report, mileage, accident history, engine condition, etc., the value of the car is determined. A car with better working conditions will cost more.
- Age: Even though a car is almost scratch free with no broken parts, the age of the car can lower its value. A 10-year-old Honda Civic will be worth lesser than a 5-year-old one, as simple as that.
- Brand value: What type of car it is creates a lot of effect on the buyers’ mind when buying the car. So sellers take that into consideration and can raise the price according to the model and make.
Get the Car Appraised by a Local Expert
If the use of online help is not possible, you can always use the help of an expert. Professional used car dealers will know the possible base value of a car after close inspection. So if you have a car of choice you want to buy, take the help of a familiar local mechanic or dealer to look the car over.
Added Costs to the Wholesale Price
Cars bought at a wholesale price from auctions tend to have a lower price in the cases of reselling. In most cases, these cars are revamped and cleaned up to get a high profit. Dealers tend to put a higher price than the final selling price. This creates a better chance for buyers to drive the price down through negotiations.
Among the costs added to the wholesale price of the car, the largest possible one that eats up the most amount of money for the dealer is the reconditioning fees. As the cars they buy are mostly from auctions, they are often damaged in many ways and might also need severe repairs. The changed parts and newer adjustments can cost a lot.
For other added costs, dealing with transportation is a big deal. Transferring the car from the auction lot to their own garages can cost big bucks. If the cars are moved across state lines, the transportation can cost up to $500. And sometimes, the cars need new titles, documentation, insurance, and professional inspections. These costs are also added to the final price of the car.
Can You Get the Wholesale Price as an Individual Buyer?
As a private party, it is slightly difficult to find out the wholesale price of the car you might want to buy. We mostly want to trade in our car for a good trade-in price. And for that, to get at least a good average price for the car, the trade-in value needs to be fair. But a professional dealership may have a better chance of getting the true wholesale prices at a wholesale auction than an individual buyer.
Even though the wholesale value of a car is incorporated into the car prices as a dealer cost, it still saves a lot of money. The used car market is very competitive. And so, it is very important to understand the wholesale price of the car to get the best deal. There are no specific invoices or documentation of how much a car dealership pays for a car in a wholesale lot, so it is not a true value that is common knowledge.
As we know, dealing with the dealership when buying a car is the most important thing. We need to communicate with the dealers to adjust the warranty, the price, add-ons, and many more aspects of buying the car. And when we need to negotiate the price of a used car, it is very helpful if we understand the wholesale value of the vehicle we want to buy.
Buying a car has become a necessity in specific regions of the country. You might feel stranded without one. So buying a used car can save us in a lot of ways. When buying a used car, our main goal is to save some money and to get the best possible features with the least amount of money. And so if you do some research to figure out the wholesale price of the car before actually buying it, then it can become a really successful transaction for your part, whereas the dealer also is able to make a profit.