Vehicle trade – tips for beginner

The trade in used cars is already an additional mainstay for some workshops - with manageable effort and great advantages. Answering a few questions will help beginners to go in a working direction right from the start. If you are unsure what suits you, you can initially purchase different vehicles with limited risk. One of the most efficient forms of acquisition are large live auctions.

Interview with Markus Utke, Head of Remarketing at Buchbinder

From a workshop point of view, what can speak for the entry into the used car trade?
M. Utke: There are many reasons for expanding your own business to include trading in used cars. In addition to the pure profit margins, the sale also offers potential for the future. Among other things, existing customers can be tied even more closely to the workshop if they also buy their new used car here.

In the sales pitch, the workshop often benefits from the trust it has with the customer. At the same time, there is a good chance of winning new customers among the car buyers who became aware of the vehicle through advertisements.

So it's a customer retention measure...?
M. Utke: Yes, exactly. Because for many buyers it is simply obvious that they have repairs carried out where they bought the car. Here the workshop can be recommended as a good partner in the long term.

What requirements does a company have to meet?
M. Utke: The conditions for trading in used cars are very good for most workshops. It starts with the storage space that many companies have anyway. Since they know the technical side of many vehicles, business owners can also calculate possible risks associated with different makes when purchasing. In addition, vehicles with damage can also be of interest to them. The technical equipment required for a repair is available, and the hourly rates for repair work can be calculated quite differently than, for example, at car dealerships. Accordingly, even with such vehicles, a good to very good margin can often be achieved.

Does specialization make sense?
M. Utke: A specialization can make sense. In any case, workshops that want to get into the car trade should first ask themselves a few questions: Which target groups do I want to address with which vehicles? Do I prefer simple or fully equipped vehicles, cheap or expensive vehicles? The preliminary considerations also play a role in what effort the workshop is willing to put into it, what prices can be achieved in the region and what margin the workshop would like to achieve. Sometimes it makes sense, for example, to keep the profit margin low in order to keep existing workshop customers or win new ones.

How do you keep the financial risk low?
M. Utke: Owners who are unsure about these points can initially set themselves a financial limit when buying used cars and thus experience with manageable risk how well the trade of which vehicles is going. With increasing experience, the market and opportunities can be better assessed, the workshop can make better decisions and increase the financial framework for acquisitions.

Where are the best sources of acquisition?
M. Utke: Large on-site auctions with a large selection of vehicles are a good source for acquisitions, especially for beginners. Such live auctions offer the opportunity to take a close look at and also to purchase several vehicles at once and thus very efficiently. Many professionals also appreciate the opportunity at such events to exchange ideas with other workshop owners and dealers from other regions and to benefit from their experiences. Those who are involved for a longer period of time can then also rely on online auctions. However, you should be sure that the respective provider is really trustworthy.

How do you recognize reliable sources?
M. Utke: When looking for an auction, it is important that workshop owners can obtain comprehensive information about the vehicles online in advance. At the Buchbinder Auction, for example, photos and detailed condition reports are stored for all the cars on offer. At the same time, several hundred to over a thousand vehicles are offered here at the three-day live auctions and the regular online auctions, which are currently also replacing the live auctions due to the Corona crisis. This not only increases the chance that professionals will find a whole range of vehicles that match their ideas, but also the chance that they will be able to purchase a number of them.

Info box Buchbinder
Buchbinder Auction is part of the Buchbinder group and thus part of the Europcar Mobility Group. The Buchbinder Group, founded in 1957, is headquartered in Regensburg, with other locations in Duisburg and Neunburg vorm Wald. The group has 165 rental stations in Germany, Austria, Northern Italy, Hungary and Slovakia. Since 2015 Buchbinder Auktion has been auctioning selected returns from the rental fleet live on site and online. The range of vehicles includes cars, commercial vehicles and accident vehicles. Over the past few years, the vehicle auction has developed into an international event for dealers and traders in the used car industry. Further information: www.buchbinder-sale.de