Understanding wholesale and retail options at second hand car dealers

Buying a second hand car is not always as cheap as you think. A consumer who decided to look at second hand cars at the company We Buy Cars, discovered that there are two price options to choose from.

He was told that there is a wholesale option and a retail option.

With the wholesale option, you pay the price advertised, but you then have to go on to do and pay for all the checks of the car yourself.

The retail option did the checks, but you had to pay for their warranty that increased the price by several thousand rand.

READ: Commission to charge dodgy CT car salesman after failing to reimburse customer

Consumer journalist Wendy Knowler investigated this further and discovered, through one of her past cases, that if you buy wholesale, the Consumer Protection Act (CPA) doesn't apply. This is because you are technically buying with the intention of reselling.

She adds that when she approached We Buy Cars on their sales models, she was given a long explanation of how they operate.

In short, there are indeed two types of deals, one retail and one wholesale. The wholesale deal was only for dealers and businesses with an annual turnover of R2 million. The retail deal, that's the one where you pay extra for the CPA, warranty and all the other things - that's for ordinary consumers or dealerships with an annual turnover of less than R2 million.

Wendy Knowler, Consumer Journalist

Knowler adds that the CPA included small businesses so they too get all the protections of consumers.

Knowlers says that int the case of the consumer who was offered a wholesales deal, We Buy Cars said that there are steps to determine if a potential client is a dealer or not. But it can get quite tricky, particularly if individuals try they luck to get a cheaper price.

Listen to the full conversation:

Email: consumer@knowler.co.za, put Cape Talk in the subject line, followed by the issue e.g. cellphone contract dispute.


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