People often think that buying a used vehicle through a dealership is a safer option than buying a used vehicle on the open market. The concern is that someone advertising a car for sale on the side of the road or through a classified ad might actually run some kind of fraudulent scheme.
Buying through a dealership gives people a sense of security because they assume the used cars available are in good condition. However, once you learn about where dealerships get many of their used cars from, you may realize that the source of the vehicle isn’t what matters.
Where do used cars at a dealership come from?
Trade-ins
You can’t turn on the television or listen to the radio without hearing at least one advertisement for a car dealership. Frequently, these ads will encourage people to bring in even undrivable vehicles they own to trade in toward the purchase of a new vehicle or a better used vehicle.
Some dealerships will fix these vehicles up by addressing their major issues. Others may just clean them and then sell them as-is. The used car you consider buying may have been a trade-in that someone else knew was on its last legs when they came in looking for a replacement.
Other dealerships
Especially in small communities, old beater cars can get a bad reputation. If someone recognizes a vehicle their neighbor used to drive on the lot, they won’t just avoid buying that vehicle, they may question the integrity of the dealership.
Some auto dealers intentionally sell their local used vehicles to other dealerships far enough away that people won’t recognize these vehicles. In other words, they may trade the very worst used vehicles on their lot with one another.
Used car auctions
Dealerships often buy their vehicles at massive auctions. They may buy individual vehicles for as cheap as they can or huge lots of vehicles without being able to thoroughly inspect all of them first. Some of these vehicles may be police seizures or repossessed vehicles. Others may be previously-leased vehicles or retired vehicles from rental fleets.
Dealerships reselling these used vehicles may not even know everything wrong with them. Some of them might avoid doing inspections or offering warranties specifically because they know there are probably major issues with some of these used vehicles.
If a dealership sells you a used car with massive undisclosed defects, you may need to take legal action if they won’t replace the vehicle or repair those undisclosed issues. Learning about how dealership practices contribute to autodealer fraud and help you protect yourself when purchasing a used vehicle from an established dealership.