How car repurchases work: inside and out about the essence of this business

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The sales field is very popular among both experienced entrepreneurs and novice businessmen. By buying something cheaper and selling it at a certain markup, you will be able to make a good profit with minimal time investment. There are many areas for work in sales and everyone is free to choose what they like. Today our resource would like to highlight the issue of vehicle resale. Read on to learn more about how car resellers work and how difficult it is to become one of them.

Content

• How outbids work
• What schemes are used to resell cars?
• Where to find a cheap car
• What are the pros and cons of working as a reseller?

You can earn up to 300 thousand rubles a month by reselling cars. And this is not the limit. But money won’t just fly into your pocket—you’ll have to work hard, because the income of the outbid dealer depends only on himself.

In this material we will tell you how to become a reseller, how car resellers work and what to expect from this profession. Timur Zelensky, a car reseller from Tyumen, helped us in preparing the material.

Timur is an auto mechanic by training. He is well versed in cars, and this greatly helped him master a new profession:

— It all started with the purchase of the first car. I bought an inexpensive Focus II and brought it to mind .
Soon a neighbor noticed my car in the yard and asked me to sell it to him. I agreed, but quoted a price that was 50 thousand more than what I paid for. The price suited me - I sold the car. After the deal, I realized that I had earned a month’s salary in just a week. Naturally, I went into a frenzy and became interested in how to become a car dealer and where to start .

Start

We started working on the project more than a year ago, and registered the company in February 2013. We rented space in one of the Moscow coworking spaces. We started searching for clients with cold calls through the website auto.ru.

Team

Alexander Petrov, co-founder

Graduated from the Financial University under the Government of the Russian Federation. Worked in the Moscow office of PWC. Earns an Executive MBA in

business school INSEAD.

Ruslan Stukalov, co-founder

Graduated from MIET, worked in the Moscow office of PWC, received an MBA for executives from INSEAD business school.

Sergey Petrov, co-founder, executive director

Chemist-technologist by education. Worked in an international certification company. He was engaged in internal audit in a petrochemical holding.

When we called our first clients, we didn’t have a website yet. The first version appeared a month and a half after the start of active work on the project, but that site, admittedly, was completely useless - our lack of relevant experience affected it, so over time we changed everything on it.

We tried to come where it was convenient for the client, offered our services without prepayment, photographed the car on the spot, looking for a suitable site for this in each district, and attracted technical experts and criminologists to understand their capabilities and the techniques used. The key goal at that time was to understand the needs of car enthusiasts and acquire expertise. We tried to get into the heads of car owners, find out their problems and expectations, and also went through in practice all the stages of the future process.

In November 2013, we entered into an agreement with a car wash, which also had the platform we needed for photographing cars. There we set up a place for inspecting cars.

We continued to experiment with our own cars: we bought one car, as it seemed to us at the time, at a very low price and intended to continue the practice of traditional purchase and sale, in this way to gain experience and, in fact, enter this business. But we got burned pretty quickly, because for a long time we could not sell the car even at the purchase price.

We also put our cars up for sale and visited showrooms and dealers to understand in practice how competitors work. For example, we have found that the advertising claims of some market participants are not true. But the most important conclusion for us was that the traditional purchase and sale of cars is a risky activity and requires significant capital. Therefore, we radically changed the business model.

We realized that the niche was empty, since there were very few honest sellers. We were afraid that the client would experience negative emotions because he had to come to us several times to sell his car. But then we learned that more than half of car sales are made after the first show. Therefore, this point will not be a brake on our business. In addition, we received a lot of confident feedback from the market: if you bring the service to mind, it will work successfully.

In the fall of 2013, we signed an agreement with the international expert company DEKRA, which carries out technical diagnostics of cars passing through our company.

How outbids work

The main task of outsourcing is to find and buy a car at the lowest price, put it in order and sell it at the average market price or at an inflated price. The very scheme of how car resellers work looks like this:

• they find a car for the available amount;
• inspect the car;
• bargain with the seller;
• draw up documents.

Beginners, as a rule, start with budget cars costing 200-400 thousand rubles. They take all models that are liquid on the secondary market - from Focus to Corolla and Octavia. Timur settled on Toyota Corolla X:

— I immediately decided that there was no point in taking the “Logan-Nexia” park. It takes a lot of time to select a car, there is a lot of broken auto junk, and the profit from resale is small. Based on the advertisements, I found a car without a front bumper after a minor accident and remembered that at our car service center a client recently replaced the front bumper on a Corolla. The “native” one was already old, with small cracks, and the client allowed the part to be thrown away as unnecessary. I realized, what if I take a car without a front bumper and put on it the one that was left after the repair?

Because of the haste, the seller made all sorts of concessions: he gave a discount, gave a radar detector, and even left some worn-out winter tires. So Timur, who did not know before becoming a car reseller, received his first discount. There was only one question left: how to register the car for resale.

Also read: Selling online: how to sell a car online

Search for buyers

When everything is ready for work, the first car has been purchased, you need to start searching for potential buyers. There are no specific tips on where exactly it is best to look for them. The right thing to do here is to use all the resources available to you. Gradually, when you become a more experienced and sought-after specialist, it will be much easier to find clients. For a beginner, it is recommended to start:

• from specialized sites;
• ad sites;
• automobile forums;
• local print media;
• car markets, etc.

Once you find a potential buyer, you need to take him into circulation. And here it is important to be extremely careful and careful. The reseller’s task is to interest him in his offer, and not to impose. You have practically done your job if, after a telephone conversation, the client decides to look at the car. This is where the pre-sale preparation procedure begins. You shouldn’t polish your car excessively, as this will raise suspicions. It’s much better when the car is clean and well-groomed, but a little covered in dust. This creates the effect as if you regularly use the car, and do not keep it under three locks and do not polish it every day, just to give and maintain its presentation. Be sure to offer to test the car, get behind the wheel, look under the hood, and try out all the systems. That is, show that you have nothing to hide, the car is in good condition, and you should take it.

What schemes are used to resell cars?

There are two car resale schemes:

• Outbids do not include themselves in the PTS. They fill out a contract, transfer the money to the seller and immediately put the car up for sale. During the transaction, the buyer enters into a new contract and buys the car as if from the old owner. This is one of the most common and dangerous schemes from a legal point of view. It is illegal and fails in cases where the buyer does not check the data in the vehicle title and the owner’s passport. If questions arise, the outbidr admits that he is outbid, but already at the stage of discussing the contract, so that the client does not “jump” from the deal. This scheme is beneficial for resellers because they do not have to pay a state fee for changing documents.
• Repurchasers register cars in their own name. This scheme is popular among those who work with several machines at the same time. While registered cars are waiting for resale, unregistered cars are “spinning” according to the first scheme.

Timur sold the Corolla on his own behalf.

— In the first two meetings, I honestly admitted that I took the car, brought it to mind and put it up for sale. This raised doubts among buyers; they asked why I was getting rid of the car so quickly, and whether I had bought it. And then it dawned on me that if I didn’t make up a story about how I went to the south on vacation in a Corolla, I wouldn’t sell the car. For some reason, people begin to cringe when they hear the word “outbid.” They believe that if you haven't driven a car for at least a year, you don't know anything about it. But they don’t understand that after purchasing it, I inspected it inside and out and performed the necessary, albeit minimal, maintenance.

Also read: How to sell a car at a high price

Transaction process

Completing a transaction to buy a car from a reseller is no different in principle from the usual procedure. The transfer of ownership rights is carried out on the basis of a purchase and sale agreement, which fixes the cost and complete information about the car.

Then, within 10 days, the new owner must undergo state registration with the traffic police. When registering the car, it undergoes license plate verification and technical inspection. If everything is in order with the car, then the procedure will not cause problems. It's another matter when the outbid turns out to be a scammer. Defective vehicles, those on the wanted list or under arrest, or illegally imported vehicles will not receive registration.

Important! During the transaction, the former owner is at serious risk. The reseller, using various schemes, does not register the car in his name, which means that all fines for traffic violations will be sent to the old address. It's even worse if a crime is committed using a car.

Where to find a cheap car

There are special ad aggregator sites that help track a new car on the market as soon as the seller puts it up for sale. In the database of such sites, you can even see those ads that did not pass moderation on the portal on which the seller tried to place them. It is worth considering that these services are paid. Access to them costs from 1,000 to 8,000 rubles per month.

Some resellers establish profitable relationships with dealership employees. Thus, resellers can receive cars without a markup, at the price at which the dealer accepts this car through the Trade-In system.

Also read: Selling a car via trade-in: advantages and disadvantages

The main stages of buying and selling used cars

After studying materials, watching videos on YouTube channels, studying the used car market in your region, you should prepare a garage, tools, and money.

The purchase will consist of 4 stages:

1. Choice.
2. Purchase.
3. Elimination of defects, minor repairs.
4. Sale.

Selection of used cars

For a successful transaction, you need to choose a used car whose restoration costs will not be high. The main contribution is made to improving appearance. Buyers are primarily interested in the condition of the body, interior, then the internal combustion engine, transmission, chassis, etc.

Purchase

If the body is rotten, then such cars should not be taken. Rotten body parts will have to be replaced if you want to sell them for the highest possible price. When purchasing, defects help the buyer reduce the price.

Elimination of defects, minor repairs

The main work to increase the value of a used car is work on the body, namely:

• straightening;
• putty;
• primer;
• painting;
• grinding.

Externally, the car needs to be improved to the maximum. Install fog lights, moldings, caps or moldings, mirrors. Airbrushing is not worth it, everyone has different tastes, perhaps the 3D drawing depicted on the hood will not please the buyer. If the tires are very worn, it is better to replace them too. By the way, do you know how to store tires in summer and winter? It has its own rules. For example, some cannot be stored in a vertical position, some in a horizontal position.

Do a complete overhaul of the car, change covers, mats; if the instrument panel is cracked from the heat, then it is advisable to change it too.

As for the suspension, it also needs to be diagnosed and brought to the best condition, and worn parts replaced. Tighten the bolted connections and lubricate them.

Regarding the engine, you need to change the oil and filter, if the color shows that it’s time to change. Check belts, replace worn ones. Compression should be checked when purchasing to know what condition the engine is in, whether it pulls at all or not.

Sale

There are several rules of sales. Don’t rush and don’t immediately drop the price. If no one takes it at the stated price and turns around after the price is announced, it means it is greatly overpriced. As a rule, cars leave the car market from 1 to 4 weeks.

To be honest! If there is a defect, such as a cracked beam under the engine or other problems, they should be mentioned. Whether he takes it or not, it’s up to him, but he will know that he will need to repair it. Hiding defects can cause a new buyer to get into an accident.