One may wonder where used car dealers get their cars. The answer to this question is that used car lots are filled up with vehicles from an array of sources.
Fleet vehicles are groups of vehicles that are owned and rented out by national car rental companies for certain periods of time. Once these rentals are deemed worthless according to the parameters set for their “fleet” the decision is made to send them to auction.
Another group of cars that you will see come from a dealer auction are repossessions. Repossessions are cars where the previous owner was unable to maintain financing obligations. The bank then takes ownership and runs them through for sale to the highest bidder.
A third group come from what I like to call “undesirables’. Keep in mind that this does not necessarily mean low quality. There can be several reasons why a used car would be unwanted by one dealer and coveted by another. Geographical purposes are one of these. For example convertibles will sell for more in the south while four wheel drive vehicles are suited for northern drivers. Available financing requirements concerning price point and/or make and model differential are two other reasons a used car dealer chooses to take used cars off the lot in favor of selling it at auction.
Besides auction purchase there are other ways to fill a used car lot inventory. Franchise dealerships can fill their lot with lease turn-ins, but the vast majority of available inventory on any used car lot come as trade-ins from those who buy cars from the dealer.
Many that are looking for an upgraded vehicle do not want to deal with the duties of selling their used car on their own. They are willing to take less money if the dealer will take it off their hands. For this reason the used car dealers can often make a tidy profit from reselling a traded-in vehicle.
One source is not necessarily better than another. It’s the condition of the vehicle that makes the difference. There are some circumstances that are more desirable than others. For example when a car has only been owned by one party chances are that probably better that it is more reliable than a vehicle passed from hand to hand, but for the most part doing your research on the vehicle you’re considering is paramount to your success in purchasing a great used car.