Benefits of Buying a Car Private Party
Buying a car private party (directly from the owner) is a smart, cost-effective way to build your dealership's inventory. Though most of your inventory will still likely come from wholesaler auctions, private party used cars are an attractive option for many dealers for several reasons.
Lower Prices and Less Fees
Private sellers don't have the overhead costs that dealers do. Private sellers don't have employees to pay, businesses spaces to rent, utilities, or any of the other expenses that it takes to keep a dealership running. Because of this, private sellers can more often afford to sell their cars for their actual value, not needing to mark up their prices to absorb overhead.
By buying private party, your dealership doesn't have to absorb the fees and hidden costs that you would be subjected to when purchasing from another dealer or wholesaler, namely:
- Auction Fees: Car auctions require buyers to pay for entry, in addition to a transaction fee that equates to a certain percentage of the final bid price. Private sellers usually did not buy at auction, so they don't have to consider these fees.
- Transport Fees: Dealers must pay someone to drive or deliver the vehicles to their dealership, while private parties tend to sell their vehicles in person.
- Holding Costs: Dealers can't simply park their inventory in the lot and forget about them. Each vehicle requires maintenance and cleaning to prevent damage or wear. Private sellers usually do not have a lot full of vehicles to maintain, so this cost doesn't enter the equation.
Most states and cities in the US incentivize private party car sales with significant tax cuts. Though most places still require you to pay sales tax when you purchase a vehicle, buying from a private party allows dealers to pay a much lower sales tax. While it's difficult to generalize exactly how much lower the taxes will be without knowing the vehicle in question and the city or state where the sale is occurring, the difference can often be as dramatic as $1,000 in taxes for a dealership car versus a $100 for private party use tax.
Higher Bargaining Power
Since dealerships and wholesalers need to consider overhead costs, they have stricter policies on profit margins. Salespeople are only authorized to go so low with their prices because, at the end of the day, they have a business to run. Buying used cars from private parties, however, is much less formal. Private parties can come to a mutual agreement with their buyers, so negotiation is usually much more flexible.
Quick Turn Around To Sell
Since you're usually just dealing with the one owner and negotiations are much easier, buying a car private party cuts through a lot of the red tape. The experience of a private party used car sale is usually much more comfortable and friendly, without the looming threat of a hard sale and strict quotas to contend with. This convenience allows you to skip a lot of the hassle involved in buying from another dealer or wholesaler, so you can spend more time getting the car ready to resell.
Follow Up! Private Sellers Can Be Slower To Sell
While buying a car private party has a lot of advantages, one thing to be aware of is that private sellers aren't always as motivated to sell their vehicles. Since selling cars isn't their formal job, it can be easier for private sellers to lose touch with their buyers. This is why any dealer buying from private sellers will need to be vigilant about following up with sellers, sending multiple texts and emails, and generally keeping an open line of communication that puts the seller at ease.
Can VETTX Help With Purchasing From Private Party Sellers?
VETTX is a valuable tool for dealerships that consolidates local private seller listings to give you a full overview of the available private party used cars for sale in your area. Easily view all the available vehicles for sale by owner within a certain distance and reach out to individual sellers! VETTX can be your secret weapon for keeping your dealership stocked for a lot cheaper.
How Does the Car Buying Tool Work?
One hassle of buying cars from a private party is the myriad of online marketplaces where listings can appear, forcing most dealers to regularly check each individual website where private sellers post their used cars. But VETTX takes away the busy work. By scraping private seller car listings from all of the major classifieds sites (and many local ones) and consolidating these in one convenient, location-indexed marketplace, VETTX allows dealerships to keep a pulse on the local private car market and buy exactly what they're looking for at lower price points.
What Does the Software Show You?
More than just listings, dealers can use VETTX as a robust dashboard that guides all things related to the private party used car market.
Data Tracking & Reporting
VETTX allows you to keep close track of seller trends and generate detailed reports about which types of cars are sold most often in your area. Knowing which vehicles are most popular in your local market can provide you with valuable information as to which makes and models your customers might respond to and where you might like to stock up.
VETTX crunches the numbers on the available inventory for sale in your local market, indexing the data for a robust search function. This allows you to search for exactly the cars you're looking for and find them with ease.
Used Car Market & Listings
Compile used car listings from a myriad of e-commerce and classified sites to conveniently browse a full representation of the current private seller market.
Customer Data & Customization
Put all of your customer data in one place, integrating seamlessly into your CRM. Keep track of your customer's needs and interests in order to customize your sales and show customers vehicles that best fit their needs.
Why VETTX? Software for Car Dealers
VETTX is an easy-to-use platform that allows you to expand your dealership's used car inventory in less than two weeks.
With valuable features, like
- An intuitive platform
- A dedicated booking team
- Detailed analytics
- Dedicated developer support, and
- Customizable CRM integrations, VETTX is the platform you need to transform your used car inventory!
Contact us to learn more, or schedule your demo today!