What Happens When You Sell a Car to a Car Dealership?

Selling a car to a car dealership can be a smart move, especially if you're looking to trade in your vehicle for a new one. But what exactly does the dealership do with the car after you hand it over? This comprehensive guide will walk you through the entire process, from inspection and pricing to resale and trade-in options.

Inspection and Evaluation

The first step in the process is inspection and evaluation. The dealership will thoroughly assess the car's condition, mileage, and market demand. This assessment includes checking for any mechanical issues, body damage, and overall aesthetics. The inspection team will make sure the car is in good working condition and identify any areas that may need repair or upgrades.

Pricing

Based on the inspection, the dealership will determine a trade-in value or purchase price for the car. They consider several factors, including the car's age, condition, market trends, and wholesale value. Understanding these factors can help you negotiate a better deal with the dealership.

Reconditioning

Once a decision is made, the dealership may perform repairs or upgrades to improve the car's condition and resale value. This can include:

Detailing to enhance the car's appearance Addressing mechanical issues, such as oil leakage or misfiring Fixing any cosmetic concerns, like scratches or dents

This process helps the dealership make the car more attractive to potential buyers, which can lead to higher resale prices.

Listing or Auction

Once the car is ready, the dealership will list it for sale either on their lot or online. Some dealerships might also auction off the cars to other dealers if they believe it would be more profitable.

For example, if the dealership is a highly specialized one, like a Jaguar dealer, they might feel that their clientele may not be interested in a Kia, even if the car is in excellent condition. In such cases, sending the car to an auction can help them find the right buyer who will value the car at its true market worth.

Resale

The final step is the actual resale. The dealership will sell the car to consumers, often at a markup from the price they paid. To make the sale more attractive, they may offer various financing options, warranties, and other additional services.

Trade-In Options

If you're trading in the car for a new one, the dealership will apply the trade-in value towards the purchase, reducing the overall cost. This can help you save money on your new car and make the purchase process smoother.

Conclusion

When you sell a car to a dealership, they aim to maximize their profit by effectively preparing and reselling the car. Most dealerships prefer to send trade-ins to auctions to minimize liability risks and maximize their profit margins. However, some dealerships might keep 'creampuff' cars that they feel they can sell directly from their lot due to various reasons like brand mix or specific customer preferences.

Understanding the process can help you navigate the car-selling experience more confidently and ensure you get the best deal possible.