What Is A Wholesale Car?

April 27, 2021

 

What's A Wholesale Car And Where Do They Come From?

A wholesale car is a vehicle purchased from an auction specifically for dealerships. Wholesale vehicles are typically used inventory dealers received on a trade-in that doesn't fit in with their standard inventory, or are vehicles that have sat on their lot for extended periods of time, taking up their floor plan.

Why Do Dealerships Auction Cars?

Each dealership has a range of vehicles they typically sell. A trade-in fitting into that range will help determine if it stays at the dealership to be sold, or if it goes to auction Year, mileage and condition are all major factors on whether a dealership will keep trade-ins.

For example, an Audi dealership might have a customer trade in a two-year-old Ford F-150 with 30,000 miles on it. While a nice truck, that is not the type of vehicle a customer shopping for an Audi would typically be interested in. So that F-150 might be going to auction.

When a car goes to be sold off to another dealership, it will be sent to one of the dozens of auctions around the country running on an almost daily basis. These businesses range from smaller local auctions to massive Manheim lots where thousands of cars run across multiple blocks each week. At these auctions, dealerships can purchase online or in-person, competing against other dealerships all over the country.

The cars at these auctions aren't just trade ins. Dealerships with vehicles that are struggling to sell often find their way to these auctions. The longer a vehicle sits on a dealer's lot, the longer it takes up the floor plan of the dealership, which might better be spent on a vehicle that will sell easier.

Dealers usually take a loss on vehicles they send to auction, but they are reliable ways to free up space for another car.

What Is A Car Wholesaler?

Car wholesalers purchase wholesale cars and resell them to dealerships for a profit. These wholesalers look for vehicles they believe are under valued, purchase them and sell them to dealerships - either directly or at local auctions - pocketing any profit with the sale.

These wholesalers act as the middle men for many dealerships, many willing to pay a small premium to purchase vehicles from wholesalers they trust and have built relationships with.

As we have car wholesalers on staff who browse thousands of cars every day and we can task them with finding a car for you! If you're interested in this free service, head on over to our CarFinder and submit a request. If you need help deciding on a vehicle, check out our guide here.

Wholesale Car Dealerships

Dealerships that sell vehicles at wholesale prices like Car City Wholesale's vehicles offer the same quality vehicles at competitive prices.