Where Do Used Car Dealers Get Their Cars From?

If you find yourself with a used car to sell, then you are probably already aware that the biggest source of inventory for used car dealerships is the simple trade in. It is a successful business model: you provide the car, and the dealership provides the resources and market reach to get it sold. In cases where a car is perhaps not the most appealing on the market, then a dealership can also do much to fix up the car and get it ready for sale. Far in advance of anything a private individual could build up, a dealership typically has an unparalleled market access and reach – usually involving connections to a nationwide network of car outlets – which means that for whatever car is traded in (and in whatever condition) a dealership will have a buyer ready to snap it up. 

This is the reason dealerships, like Cash for Cars in San Diego for example, acquire so much of their inventory from trade-ins. If you are looking to sell a used car in San Diego or elsewhere in California, you can be sure of the best price, whatever its age or condition. With a market database covering outlets across the country, a buyer for your car can be found. 

Restoration and Servicing 

Of course, anyone can restore an old car, but not anyone can restore a car like a dealership can. The reason for this is that a dealership will be in a constant process of car restoration and will accordingly have the facilities and the resources (bought in bulk) with which to make the process more than worth the investment. Narrow the scope of operations to a single individual restoring an old junker for the private sale market, and the costs involved very rarely make it worth the effort.

This ability to restore then is what means dealerships acquire so many of their cars through trade-ins; they can literally take anything. But what are the other less obvious sources of their inventories? 


Probably the second biggest source of a used dealership inventory is the auto-auction. Auctions are car sales typically put on by organizations or institutions that use many vehicles and typically get rid of many at a time. For example, the federal and state governments typically employ all sorts of vehicles and will sell on whole fleets at a time when these become redundant. You might here think of police cars and how they have changed over the years. Each time an older model of car is disposed of it is all sold on at an auction.

Closed auctions are another source of dealership inventory. These are auctions to which only reputable auto traders are invited and where trade credentials must be presented in order to attend. It is at these auctions that better condition, newer and lower mileage vehicles are typically sold in bulk. 

Rental Companies

Ex-rental cars make up a very large part of any used car dealership’s inventory. Rental companies – wishing to provide the best vehicles for their customers – will typically upgrade their entire fleet once every few years. This means that a large number of good condition, well-looked after cars regularly find their way into dealerships. 


To finish with a less well-known (although much smaller) source of a dealership’s inventory, ex-demonstrator cars might be worth a mention. Ex-demonstrators are cars that have been used by a dealership as test vehicles or staff cars and which have been moved to the on-sale inventory. Having been already purchased by the company, this is one source of inventory that costs the dealership nothing.

Post Author: Sophie Toby Hall

A former car magazine editor, Sophie’s blog offers in-depth car reviews, industry trends, and maintenance tips. Her breadth of knowledge makes her posts invaluable for both car enthusiasts and everyday drivers.