Stealership used cars

[Boostn]

I've noticed that from time to time local dealerships have current model year used vehicles for sale with relatively low mileage around 15000-25000kms. Usually more than one at a time and trucks too. Where do they source these cars/trucks from? I thought maybe lease returns but probably a bit too new for that. Possibly auctions but normally that's the undesirable stuff which stealers tend to shy away from. The mileage is a bit high for a demo and they are advertised as "used" whereas demos are technically new from what I gather. I assumed rental fleets sold their own stock. Anybody know?

[ExtraSlow]

Sometimes they were used as private vehicles for one of the dealer managers, or they could be lease returns, or could have been brought back by a buyer for whatever reason. What I've seen is that "lightly" used vehicles don't seem to save you much over buying brand new often. What has your experience been?

[corsvette]

Most are ex rentals, they lease out through the manufacturer then get returned/sold at auction. Some rental agencies sell trough auction as well.

[roll_over]

I guess you could call them rentals but service loaners

[ExtraSlow]

A ton of ex rental cars get sold by dealers are "certified pre-owned" vehicles. I have a relative in a rental business, and he sells his fleet to at least six dealerships in town for that purpose.

[Skrilla]

Originally posted by ExtraSlow
A ton of ex rental cars get sold by dealers are "certified pre-owned" vehicles. I have a relative in a rental business, and he sells his fleet to at least six dealerships in town for that purpose.

Correct, when I was in the industry we purchased a lot of our "certified" pre owned inventory from Adesa auction. If you get the vehicle VIN build from the dealer it will state "Rental or Fleet Program" as an option in the build (at least this was the case with GM vehicles)

[ExtraSlow]

Lots of them bypass Adesa and go straight from rental fleet to dealership without hitting an auction as well.

[Cos]

.

[Redlyne_mr2]

Lots of different possibilities.

lease returns
Ex-rentals
repossessions
trade ins.

[dj_rice]

Originally posted by Cos
It was also explained to me that they could be lease returns from private people. Lets say joe has a lease for 2 years. After 2 years the lease is taken back to the dealer, where the buyout is $25k. However the car can only be sold on the lot for $25k. Now the dealer takes the car from the person, but doesn't buy the car from the manufacturer. So now the manufacturer sells the car at auction. That very same dealership will bid on the car hoping to get it for less than the $25k they wanted. Similar tactic could be used even just to make a bigger spread on the vehicle.

I had asked because at a GM dealer they had 3 or 4 almost brand new dodges.

Not sure if that is true at all but it seems logical to me.


True. A few of our inventory is exact same scenario. Was wondering how we got a few "used" 2015 C400's show up on our lot suddenly. Some were bought at auction, some were bought from competing dealers inventory as they had new management take over.

[ekguy]

Originally posted by corsvette
Most are ex rentals, they lease out through the manufacturer then get returned/sold at auction. Some rental agencies sell trough auction as well.

most if not all of these would be high mileage, op is asking about abnormally low mileage part cars

[ExtraSlow]

Originally posted by ekguy


most if not all of these would be high mileage, op is asking about abnormally low mileage part cars
You'd be surprised, some rentals are sold with quite low mileage and short ownership lengths. It's a weirder business than most people realize.

I know at one place in town here, the guy making the buying decisions is in Toronto, but the guy selling and responsible for revenue is here. So if a car shows up that might not rent very well in our market (like a mustang convertible that arrives in October), then sometimes they'll sell it right away. Happens with trucks pretty often too, since the used value is so strong right now, and they get quite strong fleet pricing on brand new, they sell a four month old truck.

[Boostn]

Appreciate all of the responses. It certainly clarifies things and as mentioned, probably a better bet to shop new if you're in the market. The price gap isn't all that great anyways and the notion of a 2014/2015 "lightly" used rental or fleet vehicle doesn't sit too well with me. :rolleyes: Private lease returns might be ok but I find that dealers are usually elusive when asked about pre owned vehicles sitting on their lot in terms of history. Car proof is a good start but not always reliable either.

[03ozwhip]

Here's a good way to think about it. My buddy is using as we speak, a loaner jeep compass that when he got it, had 900 kms on it.

Everyone he drives it, it is constantly redlined. I wouldn't touch a loaner car for the life of me.

[Aleks]

Originally posted by 03ozwhip


Everyone he drives it, it is constantly redlined. I wouldn't touch a loaner car for the life of me.

Good for him. That engine will now last much longer and have better fuel econ than other Compasses that were driven gently initially, so he's doing someone a favour :burnout:

[RealJimmyJames]

some people have an irrational phobia of rental vehicles. Keep in mind the vast majority are NOT rented to early 20's males.

Most are rented by families or for business.

I have previously bought used rental vehicles, and I would do it again.

[blownz]

I used to work for a rental place and we sold about 800 vehicles per year directly to dealerships. All of these vehicles would be 6-12 months old and have typically 15-20,000km on them.

We purchased mostly Fords and most obviously went back to Ford dealers, but tons went to Honda/Toyota/GM/Dodge/etc.

Funniest thing was one time I went to a Honda dealer in Edmonton with a friend who was dropping his car off for service. While waiting I noticed a few of our vehicles as this dealership used to buy a lot. Sales guy came up to me and asked if I was interested. I made the comment "you sure have a lot of Fords" and he said "yeah, lots of people buy them for a year and then move up to a Honda product". So I asked if they were all private trade ins and he said yes, they were all one owner trades, just someone looking to "move up" to a Honda. So then I said "so you wouldn't recommend one then" and he said they were actually really good vehicles and a steal at these prices because owners lost so much trading them in. I got tired at this point and told him I knew they were all rentals and what he paid for them. lol Sales guys are always douche bags.

[dtrieu]

I used to work for Enterprise. The fleet size in Alberta was 20,000 at the time that I left 5 years ago. 90% of the cars are purchased straight from the manufacturer and then sold at adesa, or to dealerships all over the province at the end of their rental life. All the vehicles are sold before they reach 60,000km's because of the drop in resale after that point, as most manufacturers base warranty ends after that. (More appeal in buying a car with warranty still, and the cost of holding a car that is out of warranty is an unnecessary liability). Cars are brought to auction all the time, and if a certain model is a hot seller, they'll pull all those ones from fleet and sell those sooner. On the flip side, they'll be cars that historically hold their value better, and will be sold when they hit a certain milage.

The other 10% were called buybacks which were typically fords/lincolns and they were fully loaded, not the base model that all the others were. They are given a time limit/km limit before they were to go back to the dealerships.

[spike98]

Originally posted by RealJimmyJames
some people have an irrational phobia of rental vehicles. Keep in mind the vast majority are NOT rented to early 20's males.

Most are rented by families or for business.

I have previously bought used rental vehicles, and I would do it again.

The problem with buying previously rented vehicles is that the resale value absolutely tanks on them.

The rental industry floods the used market with specific models and the resale goes to shit. You see this a lot with chrysler branded vehicles (with an already crap resale) such as the charger, bases grande cherokee's and the 200.

[88jbody]

At the dealership I work for I'd say about 80% of cars in the 20,000-25,000km range were rentals, 10% would have been service loaners, the other 10% are those rare ones that are actually just not driven alot.

most of our service loaners we run until about 30,000 kms
rental companies keep cars about 2 years mostly.
our demos we dont normally run them past 10,000kms, most are closer to 5000kms.
the car I bought from my dealer was a demo, and only had 500kms on it.

[88jbody]

Originally posted by ExtraSlow
Lots of them bypass Adesa and go straight from rental fleet to dealership without hitting an auction as well.

this is true, our dealer sells many rental fleet cars. as part of the agreement becasue the rental company gets such a deal is we get first pick of a certian amount to buy back before they go to auction.

our profit on selling a fleet car is unfder $100/ unit, but when we sell that same car used 1 or 2 years later we actually make some money off the sale.