Imagine this scene…
A salesman in a plaid suit wearing a giant cowboy hat and smile he stole from a shark, stands before his many toys; all of them have one careful owner, not scratch or ding on them…at least not on the outside. A client approaches to look over the stock and suddenly from nowhere, orders two thousand of them.
Welcome to world of buying cars in bulk. Okay, it doesn’t happen like that. An independent used car-slinger doesn’t deal in bulk, as far as we know of. Although many new car lots have a fleet representative that takes over if a buyer wants between two and 20 cars, fleet buying and bulk-buying-are nor the same thing.
But the military, taxi cab firms, other car hire firms, the police and so on have to deal with the idea of buying more of the same car at once.
It goes back longer than you might think. Oshkosh Corporation for instance delivers specialty vehicles, mostly trucks, for access, fire, emergency or military and has been in business for a hundred years.
One recent purchase was for 6,107 light tactical vehicles for the US army – mobile command centers-for which the bill came to a cool 1.69 billion. For that price the vehicles need to be fully operational and well serviced, though having said that army vehicles do have a reputation of breaking down, maybe it’s due to attempting to squeeze the price?
When you’re talking about emergency vehicles you also need something extremely reliable. Increasingly, these deals go to an electric motor vehicle rather than gas or diesel. Although it is a bulk buy as such there needs to be a customized design to start from.
They may look the same to an outsider, but something as straight forward as a fire truck varies greatly from one state to another, based on their needs.
When it comes to purchasing taxis what do you go for? Ride-share vehicles are privately owned so each one is unique, but when trying to maintain a fleet of corporately owned taxi s it’s best to have all the same car. Uniformity of vehicle profile helps reinforce the brand just like the paint jobs does, but as an added bonus your mechanic can order parts in bulk as well. Every car is purchased outright, except for special circumstances when cars are leased. The contracts on leased taxis are detailed because of the wear and tear inflicted, and the high mileage added. It’s hard to imagine not going to be out of pocket leasing.
Another person who might buy cars in bulk is that salesman referred to above. Sure cars come in on trade, and many are purchase at auction, but when an independent car dealer finds another dealership liquidating inventory they may buy sever dozen at a time, sight unseen.
Dealerships who offer new vehicles do so by negotiating a bulk rate even though the cars arrive in batches across the year.
This can really help the salesman because if a customer is looking for one specific type of your brand of car they can order one through you and you still make a commission.
These dealers are also less likely to get stuck with hundreds of cars they cannot get rid of…however, they need to be pretty savvy to avoid low or high inventory. Too few cars on hand and you don’t close as many deals. Too many cars on hand and you run into a host of problems including tax issues.
What considerations do you need in order to make a purchase (or should I say several purchases?) this way? In some ways buying a car wholesale is similar to buying cars retail. You want the full service history. You want the papers to be in order. So you can put the car on your lot, and ideally, sell it. It’s that simple.