subject: What Wholesale Car Dealers Do [print this page] The wholesale price of an automobile is the price that dealers pay either the manufacturer or an individual seller. Car dealerships will then sell the vehicle to consumers at a higher price, called the retail price, so that they can make a profit. There are also professionals who purchase vehicles from auctions or other people and then resell the vehicles again to other car dealers. These wholesalers do not usually sell cars to the general public.
To sell their automobiles, wholesalers often attend dealer-only car auctions. At these auctions, participants must have a current car dealer license in order to bid or purchase a car. It is through these auctions that most dealerships rotate their inventory, selling units that are not moving on their lots and acquiring other automobiles that consumers in their area may be interested in. These dealer-only auctions tend to feature automobiles that are either new or a few years old. They are often recent trade-ins and still have existing warranties.
In general, most wholesale auctions deal with automobiles that do not need to be reconditioned and are in good shape. Used car dealerships that target consumers in lower price ranges, however, may opt to buy vehicles that have a few problems but are also much cheaper. All wholesale vehicles are purchased "as is," which means that if there are any problems with a vehicle, the dealer who purchased it is completely responsible for fixing or refurbishing the vehicle.
In most cases, wholesalers do not make as large a profit per automobile as retail dealers do because. They sell to car dealers who usually demand a much lower price so that they can resell it again for a greater profit. But whatever wholesale car dealers lack in profit per unit, they make up for in the numbers of vehicles sold. Wholesalers usually deal with a large number of automobiles and buy and sell in several different states in order to make the highest profits.
Although many people may think that wholesalers do not directly affect the consumer market, they actually do make a huge impact on what vehicles are available to consumers, and they can even affect what the consumer price is. Most retail car dealers work with one or a few trusted wholesale dealers who provide them with their inventory. And even though wholesalers usually sell directly to car dealers, their main goal is to offer automobiles that will appeal to general consumers.
