Guide & tips on buying a car from a car dealership

Things you probably didn’t know about the motor trade


Car dealer facts

  1. As a rule of thumb, car dealers work to a minimum of £1,000 profit margin per vehicle they sell. This should be Net Profit after basic associated costs that may include:
  2. Dealers can earn money in several ways:
    Profiting from the vehicle they are selling
    Profiting from extended warranties, finance packages and insurances
    Profiting from any part exchange vehicle that is included in a deal
  3. Many dealers buy vehicles from an auction, prepare as necessary, advertise and sell for profit
  4. Dealers are working in a competitive industry with profit margins being squeezed due to competition and private car buyers making the most of car auction purchases



Motability vehicles

There are pros and cons to a Motability vehicle purchase:


  1. Such vehicles are serviced under contract at supplying dealers
  2. Vehicles tend to be sold at lower mileages due to restrictions


  1. Motability vehicles can suffer excessive wear and tear due to wheelchair use and/or vehicle adaptations. A driver with physical impairments may result in a vehicle that has suffered unusual wear or stress points such as torn seats and dented/scratched door panels
  2. Excessive wear may result in a Motability vehicle selling at auction for a reduced price. Many dealers are attracted to this type of vehicle and attempt to buy for considerably less than average market value. Such cases may lead to excessive cosmetic or interior vehicle repairs. As mentioned, imagine how the vehicle appeared prior to preparation



General tips when buying from a dealer

  1. Be mindful of exaggerated part exchange valuations as they can indicate a vehicle as overpriced or has hidden issues. Dealers avoid giving away unnecessariness without good reason
  2. Where possible, view the vehicle without calling in advance to see if it is still for sale. It is best practice to hear an engine from stone cold before you buy it. A dealer may warm the engine first if they know you are on your way to view
  3. Be knowledgeable by having a list of comparative cars to view. Quickly let the dealer know you have other vehicles to view before you are prepared to buy
  4. Ask to be left alone whilst vetting the vehicle, to minimise distractions
  5. Buying a vehicle is often one of the biggest investments you can make. Take your time, research and take precautions always
  6. When part-exchanging an old vehicle ensures you complete the V5C yellow slip ‘notification of sale to a motor dealer’. Include the dealer business name, address, date of sale and VAT number. As the registered keeper, it is your responsibility to notify the DVLA that you are selling to a dealer


Read the used car buying guide Part I

The team, CarVeto

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