how do used cars traders make profits?

Answer 1

I never heard of a 'used car trader'. However to keep things simple, there are wholesalers and retail dealers.

This is what a wholesaler does: He buys the unwanted dealer trades usually for $100 or 200 hundred over what the dealer traded the car for. Example a dealer gave you $1000 for your 1983 Aries K-car, a wholesaler buys that for $1100 and then either curbsides the car for whatever he can get for it, (illegal in most states) or 'flips' the car to another dealer for argument's sake $1300, for a profit of $200.
The dealer then takes that $1300 car and then gets that car ready to sell. The dealer, if reputable, puts the car through the shop, fixes what needs to be fixed, safety checks, paints if necessary, puts new tires on it, puts a new state inspection, on it, cleans and details, adds his dealer pack and warranty, and voila that "$1,300 wholesale car" is now a retail car for $3,995. There is a phrase in the car biz called "in the car right". What that means is a dealer obtained the car way below market price and if he gets close to his asking price, will make a good profit. What that really means is that not much had to be done to make the car right, so money that was slated for repairs goes to dealer profit.

There are also wholesalers who search for cars for their clients. This is how this works: in the guise of being a vehicle broker, this person is the same as a wholesaler, only he does it for one client at a time, and he is a guy who will make you pay top dollar

Answer 2

Just like with anything else that you want to make a profit on. They buy low and sell high. With a car, there are 3 different values. Trade-in value is the maximum amount that a car dealer would pay for a car. The private party value is the amount that an individual would sell it to another individual in most cases. The retail price is the price you would expect to pay at a car dealer. Trade- in is the lowest amount followed by private party value and then retail price is the highest usually. So a used car trader tries to buy at trade-in value and sells at retail value.

Answer 3

Well, that's an easy question to answer. How does anyone make money selling things? They buy the cars for a cheap price, say 1500 for a car. After they've bought that car they'll put it on the lot and sell it for 5, 6 thousand dollars. They kinda screw people out of their money.

Answer 4

they buy the cars dirt cheap at auto auctions, ones that have been in small accidents and need a little body work. they throw some 50 dollar paint job on and sell for more than double what they paid for it, sometimes triple

Answer 5

Buy the cars for cheap and sell them for a higher price.

Answer 6

Dealer-only auctions......... they use Black Books (not KBB) to buy newer cars for 30-50% of wholesale.... then jack up prices 100-300%.

Answer 7

buy low sell high, sell ad ons perma wax, extened waranty.