How do you find cars abroad that you can sell at home for a higher margin?

Key findings

• A higher margin can come from the difference in how customers abroad and at home value a particular configuration. The same car need not be worth the same to them.
• In the model example, each of the two purchases costs €17,400 including transport and preparation. But a domestic customer pays €800 more for the well-chosen car from abroad.
• With the same time to sale, the €800 advantage remains even after paying the costs of holding the car in stock. Ten such purchases instead of ten ordinary ones bring in an extra €8,000 a month in the model.
• When choosing a car, the domestic sale price matters more than the discount in a foreign listing. A cheap base version may not be a genuine substitute for a domestic buyer.
• Omnetic Sourcing combines European supply with the domestic price and the expected margin, so a better margin can be sought at the point of purchase.

For the same money, a used car dealer can buy two different cars and earn very different amounts on them. It also depends on where it buys and to whom it then sells. A combination of engine, gearbox and equipment that customers in one country aren't willing to pay much extra for may be in demand at home and hard to find. That is what used car sourcing is about: finding cars on the European market that you can sell at home for a higher margin. Using a model example, we show how to calculate such a purchase once transport, preparation and the cost of holding the car are taken into account.

What one customer overlooks, another will pay extra for

A family looking for an estate car comes to the dealership. They are clear on a few things: they want an automatic, all-wheel drive and comfortable seats for longer journeys. They haven't chosen a make yet. They look at two cheaper cars on the forecourt, but neither meets their requirements. A good price alone isn't enough.

The salesperson knows customers like these. People ask about similar cars, but right now they are hard to get from domestic suppliers. When a suitable car does turn up, it tends to be expensive to buy – and the margin left after the sale reflects that.

Yet a dealer in another country may have several similar estates that its customers aren't particularly keen on. The local supply is wider, or buyers prefer a different engine, drivetrain or equipment. There, it is not so easy to get a premium for the combination our family is looking for.

In this model story, the car has a different price in the two markets for an understandable reason. The foreign dealer is trying to sell it to its own customers, while the domestic dealership can offer it to people for whom it is more attractive. The difference in demand creates room to earn on the deal even after paying for transport.

Omnetic Sourcing brings these two sides of the deal together. The stock buyer sees foreign listings alongside an estimate of the domestic price and information on local supply and demand. They can discover a car they would never have found by browsing a few usual sources, and judge whether it is worth buying at the expected domestic price.

Same budget, €800 higher sale price

The dealership in our story has €17,400 for its next purchase and vehicle preparation. From a familiar domestic supplier, it can buy a car for €16,800. After servicing and preparation costing €600, it plans to sell it for €18,600.

In Omnetic Sourcing, however, the stock buyer finds a foreign estate with an automatic gearbox, all-wheel drive and the comfort equipment its customers want. It costs €16,000, and transport and preparation come to another €1,400. In total, the dealership spends the same €17,400 as on the domestic purchase, but gets a differently equipped car for it.

The domestic customer values this combination more. For the car from abroad, the example therefore assumes a sale at €19,400, €800 more than the domestic alternative. We compare amounts excluding VAT; financing and holding costs are added separately.

The advantage therefore doesn't lie in a lower purchase price abroad – that difference was used up by more expensive transport and preparation. The dealership earns more because, for the same total outlay, it acquired a car that a domestic customer will pay more for.

These are exactly the opportunities Sourcing helps to find. To the purchase price, it adds a margin estimate based on the domestic market and the dealership's own costs. Two listings may look similarly expensive, but the stock buyer can see that one car is worth considerably more to their customers.

A good purchase then also shows in the salesperson's work. They have a car on the forecourt that meets specific requirements and don't have to persuade the customer to take a manual instead of an automatic, or offset the missing all-wheel drive with a further discount. The price is backed by what the buyer really wants from the car.

The domestic price matters more for buying than a foreign discount

A cheap listing can look tempting until it becomes clear why it is so cheap. Base equipment, a weaker engine or a different gearbox can make a car hard to sell even after importing it. The difference from the average price of the same model alone doesn't decide what you earn.

Our estate is the opposite case. The car has the features local customers are looking for. The stock buyer is therefore interested in how it compares with domestic cars with the same drivetrain, gearbox, mileage and similar equipment. A cheaper base version is not a genuine substitute for their buyers.

Sourcing makes it possible to create a virtual listing and compare the foreign car with local supply before buying. The car is still with the original seller, but the stock buyer can already see how it would hold up at home. They get to the key commercial question in time – before sending any money.

Price Report adds a comparison based on the specific specification and equipment, as well as an estimated time to sale. It helps explain why a domestic customer should pay more for the chosen car than for another car of the same model. The difference may come down to equipment, lower mileage or a combination of features missing from domestic supply.

It also helps the stock buyer in negotiations. The foreign seller may emphasise the discount on its original price, but the domestic dealership is buying for a different reason: the expected profit when selling at home. Sourcing gives the stock buyer the information to make their own judgement, so they don't have to be guided by the size of the discount in someone else's listing.

For a chosen car, the stock buyer can go straight from Sourcing to the original listing, where they will find photos and details from the seller. The purchase itself and transport can be handled for them by the Carvago BUY™ service, to which they send the chosen car directly from Sourcing. After the purchase, they can then track the car's journey from collection to arrival at the dealership.

Missed margin doesn't show up in the accounts

An experienced stock buyer has trusted suppliers and knows what to expect from them. When they need to replenish stock, they go back to familiar places. Such a purchase can be quick, reliable and profitable – and still not be the best of all the options available.

The dealership thus repeatedly buys a car that leaves it €1,200 and fails to notice another on which it would have earned €2,000 under similar conditions. The business doesn't report a loss, and nobody feels a mistake has been made. The money it could have earned on a different car simply never appears in its results.

This is where a wider choice has economic value. Omnetic Sourcing brings together offers from connected European sources and also allows selection by estimated margin. The stock buyer doesn't have to limit themselves to cars they managed to find and compare by hand during an ordinary working day.

What matters is combining breadth of supply with domestic valuation. A long list of foreign cars on its own would just add work. A comparison with the target market, on the other hand, helps identify the cars worth a closer look. These may include a configuration the dealership doesn't usually buy, even though its customers ask for it.

The owner of a small used car dealership thus gains a wider view without spending whole days on several portals. In a larger team, the stock buyer has a clear reason for recommending a particular car: not because it is cheap, but because it works out better when sold on the domestic market.

A better purchase can earn more even after a longer wait

From the €1,200 and €2,000, the dealership still has to pay for financing and running costs. In our example, it finances both purchases with a loan at 6% a year and also pays for insurance and paid listings. In the model, we therefore calculate holding costs at a flat €5 a day: roughly €3 in interest on €17,400 and €2 for insurance and listings.

If both cars sell within 60 days of payment, these costs come to €300 per car. The domestic purchase leaves €900; the one from abroad, €1,700. The €800 advantage is preserved because both deals tied up the same amount for the same length of time.

However, a better-equipped car sometimes takes a little longer to find a buyer. In another scenario, the foreign estate sells only after 90 days, still for the planned €19,400. The extra month reduces the profit, but the result is still better than with the domestic purchase.

We count the time from payment to sale, including the days before the car arrives and is ready for customers.

So even an extra month doesn't wipe out the advantage of a good purchase: even after the longer wait, the estate from abroad leaves €650 more than the domestic purchase.

Besides prices, Sourcing also provides data on local supply and demand, and Price Report adds an estimated time to sale. The two views complement each other: selling at a higher price only pays off for the dealership if it doesn't have to wait disproportionately long for it. For the opportunity in our story, the main advantage is the extra €800 on the same purchasing budget.

Thirty purchases a month, the same forecourt and higher earnings

The owner doesn't have to look for the benefit in expanding the premises. If the dealership buys 30 cars a month, it can use the wider European supply to acquire some of them on better terms. The number of deals stays the same.

Consider ten purchases that can be replaced with opportunities like the one in our example. With the same time to sale, each brings in €800 more – an extra €8,000 a month in total, after paying the costs listed.

The dealership didn't buy ten cars above its usual plan to achieve this. It still bought 30; it just chose ten of them differently. With the same acquisition costs and equally fast sales, it needs neither more money nor more space on the forecourt. The higher earnings come from better selection.

That is why it pays to see purchasing decisions as one of the sources of a used car dealer's profitability. A better purchase reduces the pressure on the salesperson to rescue the margin later with an unusually high price. At the same sale price, the business can earn more – or offer a more sought-after car and naturally justify a higher price.

In our story, it is the second option. The family pays more for the automatic, all-wheel drive and comfort equipment they wanted from the start. The salesperson doesn't have to invent reasons why they should pay extra for a car that doesn't meet their requirements. The stock buyer has brought in a better-suited car.

Omnetic Sourcing looks for margin at the point of purchase

A good purchase from abroad depends on combining European supply with the domestic price and the dealership's own costs. Omnetic keeps this data together, so the stock buyer doesn't have to combine several portals and their own spreadsheets.

• Sourcing combines connected European classifieds portals and auctions in a single search, adds the sale price in the dealer's location for each car and calculates the expected margin from the dealer's own costs. Cars can be sorted by potential margin, country, days listed and seller type, and a chosen car can be tracked all the way to stock intake. Sourcing can also be used as a service, with Omnetic handling the admin and the dealer simply choosing the cars.
• Price Report adds the recommended price, the expected time to sale and a set of comparable vehicles on the domestic market.
• Carvago BUY™ handles the cross-border purchase of the chosen car: the dealer sends the car from Sourcing and chooses for each one what the service should cover – an availability check, a CarAudit technical inspection, the purchasing service and transport to the dealership.

Book an Omnetic demo and see how European supply can bring higher margins to your dealership.

Related articles

• Study: When does it pay to cut a used car's price instead of waiting longer?
• Why aren't car listings bringing in buyers, and what does it cost a used car dealer?
• Used car reconditioning: in-house or outsourced?

FAQ

Why is it worth buying some cars abroad and selling them at home?

Buyers in different countries may value the same combination of engine, drivetrain and equipment differently. A car for which a foreign dealer can hardly get a premium may be in demand at home. Sourcing helps compare the foreign price with the prospects for selling at home.

How does Omnetic Sourcing help find higher margins?

It brings together offers from connected European sources and adds a domestic price comparison, supply and demand data and a margin estimate based on the dealership's costs. The stock buyer can then choose cars according to how much they expect to earn on them at home.

Can the domestic price be assessed before buying the car?

Yes. A virtual listing in Sourcing makes it possible to compare the foreign car with local offers. Price Report adds a valuation based on the specific specification, equipment and mileage. The stock buyer has the information on the domestic sale before committing to the purchase.

Doesn't transport cancel out the advantage of buying abroad?

In our example, transport is already included. The foreign car costs €16,000 and, with transport and preparation, comes to the same €17,400 as the domestic alternative. The €800 advantage comes from the higher domestic sale price of a better-chosen configuration.

Can a used car dealer earn more without a larger stock?

Yes, if it replaces some of its ordinary purchases with better ones. Ten cars with the model advantage of €800 bring in an extra €8,000 a month with the same number of cars. With the same time to sale and the same acquisition costs, the budget required doesn't change either.

Is Sourcing useful for an experienced stock buyer too?

It increases the number of offers they can compare and adds a domestic valuation and expected margin to them. Their knowledge of cars and suppliers can thus be applied more widely. Alongside trusted contacts, they may also find opportunities they wouldn't see in a normal search.