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How To Shop for Used Cars: Expert Tips for Traders
Expand your sales and build a loyal client base with our practical tips for choosing the right vehicles for your used car dealership
If you’re a brand new trader, it may be challenging to know exactly what to look for in a used car for your dealership. And with so many used cars on the market to choose from, it’s really no surprise.
We’ve been connecting dealers to the best used cars for 16 years and we like to think we picked up some good practices on the way. In this article, we’ll provide you with five straightforward tips from our experts to help you pick the right cars for your stock and turn a profit for your business.
And as with any sales process, it all starts with your buyers…
1. Know your buyer
A sales business thrives when it’s centered around real buyers in a real market. So, if you want to ensure you’re getting the best used vehicles for your dealership, don’t source cars according to your preferences. Instead, do your research and get to know your buyer to anticipate and fulfill their needs.
For instance, did you know that the popularity of battery-electric vehicles has exploded recently? In fact, their sales have grown by more than 30% in the last quarter of 2022, when compared to the same period in 2021.
Illustration: eCarsTrade / Data: acea
This is due to various reasons, such as unstable gas prices, EV subsidies, advances in EV technology, and the fact that new ICE vehicle sales could be entirely banned in the EU in a couple of years.
All of this means that now is a good time to invest in EVs for your dealership as current market indicators suggest that their popularity will only grow with time. Traders who follow global news and European legislation, in this case, could have anticipated these market fluctuations would make EVs an appealing choice for buyers and invested more in these vehicles.
That’s just one example of how intimate market knowledge can tell you what to look for in a used car. Another example comes from simply paying attention to your surroundings.
What do we mean by that? It’s simple. Buyers in every European country show a preference for a certain type of vehicle, whether it’s because the car manufacturer is native to their country or because the terrain dictates driving conditions.
In that sense, it comes as no surprise that Italy’s most popular and highest-selling cars, for example, are smaller models from domestic producers like Fiat and Lancia.
Illustration: eCarsTrade / Data: Focus2Move
It’s only logical that Italians will show a preference for cars designed and made in their own country. And the famously narrow Italian streets and eternal lack of parking space make smaller models the sensible choice. Can you think of some makes and models that dominate the streets of your city?
To sum up, keeping track of global events and European legislature, being aware of local preferences and even following automotive publications, forums, and blogs can all help you get to know your buyers and choose the right cars for them.
2. Set clear buying criteria
As you source cars for your dealership, you might be astounded by the sheer variety of car models, as well as the state they come in. So, to avoid dilemmas and choice paralysis, it’s definitely a good idea to set clear buying criteria for your used cars and then stick to them.
Buying criteria here can refer to practically any car element you think is relevant to your brand and the market you serve. Here are some examples:
- Car make and model
- Mileage range
- Maximum car age
- Car condition
- Car price range
- Type of gearbox
- Engine size
- Fuel
- Essential car options vs. extra car options
Once you set these criteria, you’ll be able to narrow down your choices and thus speed up the purchasing process. You’ll also set up expectations for your buyers who will know exactly what to expect every time they browse your offer. That will help you build a strong customer base that will think of your dealership when they’re in the market for a used vehicle and recommend your brand to their social circle, generating even more sales for you.
But how exactly do you make these choices? It all depends on the unique value proposition of your dealership as well as, once again, the market you’re operating in.
So, if your dealership’s value proposition is affordable used cars for a large audience, then it might make more sense to source cheaper cars with more mileage and in less-than-excellent condition. On the other hand, if you want to appeal to an audience of luxury car enthusiasts, you’ll probably want to choose barely driven cars from premium brands in spotless condition.
As you’re aligning your car buying policy with your brand, it also makes sense to ensure you appeal to an adequate audience. In other words, you want to make sure that people are interested in your offer. So, while it might make sense to offer barely used luxury cars in affluent countries, such as Luxembourg or Ireland, it might not be the best strategy in places with a lower purchasing power, such as Croatia or Bulgaria.
Illustration: eCarsTrade / Data: World Bank
Remember, instead of selecting used cars with no strategy in place, the better option is to set clear buying criteria and align them with your brand and the market you’re serving.
3. Connect with dependable suppliers
Extensive market knowledge and razor-sharp buying criteria aren’t going to be of much use to you if you’re buying your vehicles from disreputable sources. That’s because you won’t truly know what kind of car you’re getting and if the information you got from your dealer was true until it’s too late.
So before you connect with your suppliers and start the purchasing process, make sure you’re dealing with dependable and reliable businesses.
Thankfully, the internet can be a great ally here. These days, a simple Google search can tell you everything you need to know about a dealer and confirm that they provide a quality service. Just Google the trader you’re considering as a partner and check their rating and reviews. Of course, this goes for both brick-and-mortar dealerships and online car trading platforms as both can be excellent partners, providing they offer a quality service.
eCarsTrade is proud to provide an amazing service to our traders
The star rating should give you a clear idea of how past and current customers feel about this dealer. If you see a relatively high rating with more than a few votes, you’re probably in the clear.
Customer reviews can provide even more information and give you more clues on what it’s like to work with this trader, like in the example below:
Once you’re satisfied that the dealer provides a good service, you can go ahead and check out their offer. You’ll want to ensure that the dealer has a large offer of cars that fit your buying criteria (discussed in the previous section).
In the case of online platforms, a good way to do that is by visiting their website and browsing their offer.
Here’s what eCarsTrade’s website looks like, for good reference:
Thousands of cars on offer with convenient search options for finding the right ones
As you can see, there are thousands of cars on offer here, meaning this should be a dependable source for vehicles aligned with your market and buying criteria in the long run. You can also use the search function to input each one of your criteria and find the perfect vehicles, including condition, make, model, price range, age, mileage, and much more.
A dependable car supplier will also be able to answer any question you might have about the cars as well as produce all relevant car documentation to support your buying decision. But more on that in the next section.
4. Ensure used car documentation is in order
If you’re wondering what to look for in a used car, one of the first answers that should come to mind is clean documentation. After all, used cars have had previous owners so you want to make sure they were maintained properly.
In that sense, whichever cars you end up buying for your own dealership, make sure you have access to their service history, including the correct mileage.
There are two reasons why you should insist on clean vehicle documentation. The first one is that this is the only way you’ll be able to know for certain you’re getting your money’s worth and the car condition you paid for.
The second reason is that used cars that have their papers in order are worth more because buyers are prepared to pay more for peace of mind and knowing their vehicle is safe to drive.
Illustration: eCarsTrade / Data: Online Spy Shop
But here’s the tricky part: fake service histories are notoriously easy to obtain. In fact, one investigation discovered that all you need to fake a car service history is “£20 and a bit of time spent on the Internet”.
This is where working with dependable car suppliers comes back into play. Quality dealers and online auction/trading platforms can guarantee service history authenticity, which is of vital importance to used car dealers like yourself.
For example, all vehicles listed on eCarsTrade have a maintenance contract with their official brand dealerships. That means they come with complete official service documentation as well as guaranteed mileage. For Belgian cars we are able to also provide the Car-pass document, the official certificate of mileage.
In addition to that, each car is also inspected by independent experts to make it completely certain you’re getting what you paid for.
Long story short, as you’re thinking about the must-haves for your used vehicles, don’t forget to include orderly and clean car documentation into the equation.
5. Inspect damage and turn it into an advantage
It’s important to know that not all used cars you will be selling will come to you in perfect condition. But that’s okay because you can actually turn that damage into more profit for your business.
The key here is to be aware of the damage in advance and get a better deal before you buy the used car. If you’re working with a used car dealer, it might be a good idea to inspect the vehicles personally or have a member of your staff do it for you.
If you’re working with an online platform, make sure there’s an option to inspect car damage (that photographs of the damage are available).
eCarsTrade also offers vehicles with extensively documented damage
Damaged vehicles are, of course, cheaper so this is an opportunity to save resources in the sourcing phase of your business if you can negotiate a good price. And that shouldn’t be too difficult because used cars that have been in an accident are, on average, 40% cheaper than undamaged used cars.
Illustration: eCarsTrade / Data: Insurance Hotline
The other key element is working with a good mechanic who can fix the damage after you’ve made the purchase. If you have a working relationship with a good mechanic, new parts can be ordered and the damage fixed at a sensible price.
The last step is including the repairs and new parts in the resale price, plus, of course, a markup. And just like that, you’re able to turn a profit on a damaged vehicle.
This used car shopping process is a bit more labor intensive and requires you to be sure that the damaged car can be fixed at a price that won’t eat into your profits, but it should be worth your trouble. Inspect the damage carefully and turn it into an advantage for your business.
Use our tips to shop for used cars with confidence
In this article, you had the opportunity to learn what to check for when buying used cars for your dealership. To sum up all of our points, making the right purchasing decisions depends on intimate knowledge about your buyers, clear buying criteria for your vehicles, and strong partnerships with your suppliers and automotive professionals.
The biggest lesson here is to do your homework before every purchase and try not to deviate from the character of your brand. If you’re still looking for the right supplier for your business, head on to our website and take advantage of our enormous offer of used cars for all of your needs.
