How to Buy Cars From Your Local Dealer

Photo via iStockPhoto.com/WendellandCarolyn
Photo via iStockPhoto.com/WendellandCarolyn

If you’re a car rental company of any size, you source the majority of your rental fleet through your factory sales rep and a grounding dealer of that franchise. If you’re small, you scramble to buy from many sources. Whatever the case, your local car dealer could be a good source of rental inventory, especially for spot or “opportunity” buys.

How do you start a relationship with a new dealer? Pick up the phone! Ask for the fleet sales department. If that doesn’t work, ask for the sales manager or general manager.

Your first goal is to find out if the dealership has any desire to sell to a car rental company. Some franchised dealers, especially the luxury marques, have no interest in rental sales — especially at a discount.

Yet many do, and they may look to move as many as 20 cars at a time.

Foster the Relationship

Foster your relationship with the dealers before you need cars. For better price leverage, ask them to call you when they need to move product.

Many dealers, especially the import sellers, like to move volume around month’s end to maximize manufacturers’ stair-step incentives, which the dealers receive for achieving a sales threshold. You’re also in a good position at certain times of the year when retail sales are slow, such as December, January or mid-summer.

The units they’re looking to move will be sold with retail rebates and often of a specific model. Therefore, you’ll be able to shop a better deal if you’re flexible on model types.

Contact dealers in the middle of the month, when they’ll know if they need to supplement their retail sales to hit their targets. They may say that they need more time to see what price they can offer you, but then still come back with a very good deal. They might even sell at a loss — no dealer wants to miss a stair-step incentive by just a few cars.

Negotiating the Deal

In terms of price, fleet dealers will usually work from factory invoice minus rebates. Depending on how many units need to be sold, the dealer may discount you some or all of the holdback, which is a percentage (usually 2%-3%) of the invoice amount. Some import manufacturers don’t offer their dealers holdback, but they still offer them other incentives such as stair steps.

Talk to the dealer about opportunities after the sale. An impetus for them to work with you may be to get a piece of your parts and warranty business. They may also be interested in buying your retired rental units. Agreeing to work with the dealer on either could help solidify a sale.

Additionally, ask if the dealers might need your car rental services for clients. They may have a provider, but you can be their “back-pocket” rental company if the need arises.

CONTINUED:  How to Buy Cars From Your Local Dealer
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