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Monday, 1 February 2010

Sourcing Stock

This article is taken from my book "The car dealers bible" that should be available in a few months

I’ve experimented with all different methods of sourcing stock over the years.

As time moves on and your friends and family know that you deal in cars you will find that you are offered cars quite often. Another great source for stock is taking part exchanges. Let’s look at some of the most common methods of finding stock and the pros and cons of each. 
I’m referring here to actual motor auctions. I’ve bought plenty of cars from auction and as long as you keep your wits about you then you can end up with some bargains. The good point about buying from auction is that all the cars have to be HPI clear or if they have insurance claim history it has to be declared. You can have the chance to inspect the cars before the auctions and even speak to some of the staff drivers about how the car runs. The downside is that your time is limited and you may miss something important. You also need to have a certain amount of self control at an auction otherwise you can easily get carried away and end up bidding at above what you were willing to pay. We’ll cover auctions in more detail later on.
Local papers
Often a great source as you can arrange to view the car, test drive it and really have a good look around the car before deciding to make an offer. The best time to buy from the newspaper / Auto Trader is when the paper is over a week old. This way, the seller will be worried that he has placed the advert and hasn’t sold the vehicle and will be questioning his / her price etc. This is a perfect opportunity to go in and “bid them in the balls”, (see car dealers’ glossary).  When ringing up to enquire never ask about a specific model.  For example, don’t ask “Is the Alfa still for sale?” Instead ask a generic question such as “Is the car still for sale” this is simply to uncover if they are a private seller or a trader. If they answer “which one?” then you can be pretty sure they are trade. You may be wasting your time going to view as they perhaps won’t let you have the car at a good enough price.
Once you’re there looking at the car you should try to ask as many questions as possible. Look at the V5 to see how long they’ve owned the car, try to not look too enthusiastic, equally so, being too critical of someone’s pride and joy won’t do you any favours either. Instead, try to be constructively critical, such as “It’s quite a clean one, it’s a pity it needs tyres shortly” This will prepare the seller for you bidding lower than the asking price. Whilst I mentioned having morals at the beginning of the book, this doesn’t count when buying a car. There is absolutely nothing wrong in trying to drive the price down as much as you can in order to make more profit for yourself. This is an art. There is no shame in it.

Local garages
I’ve dealt with some great garages in my time; I find the independent garages to be best. Sadly however sales managers move around a bit and sometimes your supply can dry up. You also can’t really cherry pick with garages; you often have to take the good the bad and the ugly.
The best thing to do is to go into your local dealers to introduce yourself. Try to dress smart casual and avoid coming across as a wide boy (or girl). Ask for the Sales Manager. Sales managers are an odd bunch. Most you will find are really friendly whilst others are obnoxious creatures who treat you with disdain. Personally I wouldn’t trade with the latter; I’d simply thank them for their time and walk out.  Introduce yourself as a trade buyer and ask if they have any “trade offs” that you could look at. They may ask what sort of stuff you buy. You could either answer in monetary terms i.e. “under £2k” or by age or type i.e. “between 5 and 10 years” or “anything small”. You are of course better to answer “I’ll consider anything if the price is ok”. They may offer you some stock to look at there and then. If so, don’t panic. Take a good look at it, ask what length of MOT it has (it will be unlikely that it has tax as garages generally cash the tax disc in), and usually they’ll tell you what price it is if you ask them something along the lines of “what does it owe you?”
If you feel you need to give a decision there on the spot and you are unsure as to the vehicles value you could always blag it and ask “what’s it booking at?” meaning what is the trade value of the car in either the Glasses or Cap price guide. (More on these later) The Sales Manager will usually have one of these available and will either toss you his copy so you can look yourself (unlikely) or he will quickly look it up and tell you. Either make a decision to buy there and then or make an excuse such as “I actually have a client looking for one of these but I need to call him to check if he was ok with an Auto/ green one/ 1600cc”  etc and you will call him later either way.
If you can develop a relationship with a good garage you will often be able to rely on their description over the telephone and this will benefit both parties as you will be able to “underwrite” a car whilst their customer is present. “Underwriting” means to agree to buy a car for an agreed amount. For instance, your garage has a 2 year old Corsa for sale; a customer comes to buy it and wants to part exchange a 7 year old Ford Focus. You may receive a phone call asking you for a price whilst the customer is still on the premises. You would be given a quick verbal appraisal report such as, length of MOT, tax, mileage, general condition and any service history. You would then agree to buy or “underwrite” the vehicle if the garage successfully completes the deal.
What you must NEVER do when dealing with a garage is
1.   Never ask for a warranty, trade cars are strictly sold as seen
2.   Never bleat about faults that you later discover on the car, See point 1
3.   Never underwrite a car then renege on the deal

More and more the internet has become a great resource for buying (and selling) cars. Ebay especially is an excellent tool in so many ways. We’ll look at this in depth shortly. The plus side to the internet is that you have access to vast amounts of vehicles especially specialist stuff. The downside is that the internet is still full of scam artists so you need to keep your wits about you.

I am forever stopping at the roadside to look at cars with a hand written “For Sale” sign in the window. This is a great way to buy cars. I remember once I was on my way to an auction with a friend and fellow trader. As I left my friends house and turned the corner I noticed a little Fiat Seicento for sale at the roadside. I stopped and looked around it and the owner came out to say hello. It was 10 years old and had just 40k miles on the clock, 9 months MOT and 3 months tax, one owner and full Fiat history. It was also really clean. The car had been a second car for his wife but he had just retired and so they no longer had a need for a second car. The price was just £150 and I managed to get it for £125 I paid him there and then and we drove it the few hundred yards back to my friends house, we took the for sale sign out of the window and then continued on to the auction. Five minutes later my friends’ phone rang; it was a guy who we both know who does engine tuning and fault diagnosis etc. He had just driven past my friends’ house and noticed the Fiat on the front. He had a client looking for one for his daughter. We sold it there and then on the phone for £500. We hadn’t even given it a wash!

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