Selling your car can be a real pain. Let’s face it, even when we know the basic steps we have to take, it feels like nothing but a chore to sell a car the old fashioned way. You have to leave it on your drive or on the street with a “For Sale” sign in the window hoping that passers-by will be interested, and you can widen that net by posting ads for the car online via Craigslist and similar platforms. Even when these steps are done without charge, there’s one commodity that you simply can’t avoid in this process, and that’s time.
In this age of commercial impatience, people are finding themselves less and less willing to take the time to sell a car privately. For those sellers, new options have become available in the form of the “We Buy Any Car” business model that has transformed the way people can sell off their old and used cars.
In today’s blog, we’ll be looking at one example in particular, namely We Buy Cars ( www.webuycars.com ). We’ll introduce how their system works, where they operate, their particular advantages and what options their customers get.
What is “We Buy Cars”?
The We Buy Cars platform is an example of a growing sector of businesses that are involved in actively purchasing used cars for either the purpose of resale or that of recycling. They make use of the “we buy any car” model where customers are invited to inquire about a car they have and want to sell, regardless of its age or current condition. The company then makes a quote --- almost a “bid” --- on the vehicle, which the customer can then accept or decline.
Should they accept, the company comes to collect the vehicle and transports it to their own facility, usually completing the various paperwork that is required, too. Some wonder why a business like this would buy so many old and used cars. There are three main avenues that these companies pursue after acquiring cars from customers:
- The cars are scrapped and turned into recycled metal, which is then sold on
- The cars are resold either directly to consumers or to dealerships
- Key components are salvaged from the car for reconditioning and resale to car part suppliers
In the case of We Buy Cars, they don’t make it clear from their website what they do with the cars, but if they’re anything like their many competitors, they probably do a combination of all three of the above things. Unlike some large competitors like Carmax and Carvana, We Buy Cars doesn’t promote the sale of cars on its main platform. Their focus instead is on encouraging customers to inquire, get quotes and sell their cars to them.
How Does It Work?
How Would a Customer Use the Service?
Let’s imagine a simple and likely scenario in which someone might find themselves calling the number and getting in touch with them. The COVID-19 pandemic has given many people recourse to make use of services like this as they find themselves cash-strapped, working from home and thus in much less need of cars than they used to be. Imagine then a family that has 2 cars, but because of the pandemic both parents are now working from home and so no vehicle is needed for commuting. Income has been cut, however, as both are now only receiving 75% of their regular salary since business is slow.
The couple have 2 children who take the bus to and from school, so that’s not a problem, but important stores and amenities are still far enough to warrant driving, so they decide to keep one car and sell the other. The car they’re selling off is a Toyota Camry sedan. It’s only 4 years old and the family just finished paying off the finance. Despite that, the expense of insuring and fueling 2 cars is something they can’t justify. They take steps:
Step 1: Inquiry
They make the call --- (800) 231-2347 --- and get an agent from We Buy Cars on the phone. They tell them about the car, a 4-year-old Toyota Camry with below-average mileage since it was mostly just used for commuting. It was worth about $26,000 new, and after 4 years has retained 62 percent of its value, so its residual value is estimated to be $16,120 by the owner. He understands that he more than likely won’t get this value, but right now they just need to get rid of the car as quickly as possible.
Step 2: Quote and Confirm
After hearing about the car, the agent at We Buy Cars offers a quote of $12,500 for the vehicle. They explain that the pricing is done according to their own “proprietary database” (more on that below). The customer is under no obligation at this point. They hear the offer and decide to think about it overnight. The next day, despite the price being lower than they expected, they believe that the convenience factor is worth it.
Step 3: Collection and Inspection
The company operates offices and centers across the US and will make arrangements to visit customers and collect their cars as part of the deal. When the collection agent arrives at the given address, they will first check over the car to ensure that the condition matches what the customer described to the sales agent over the phone. These checks don’t take long, normally no longer than 15 minutes.
Step 4: Payment and Paperwork
Suppose the Camry passed muster and the collection agent found everything to be in order. They immediately hand the couple a check for $12,500, which they can deposit right in the bank and start using as they need. They handle any paperwork that is needed regarding titles, smog certificates and other DMV documents. At this point, the couple starts to see that the convenience factor was about more than just speed, but also not having to deal with any bureaucracy at the same time.
And that’s how the system works, in a nutshell.
Will They Buy Any Car?
They don’t list any limiting criteria such as a minimum model year or minimum standard condition to give its customers a quote. Some similar platforms might stipulate that the cars have to be from 2000 onward, or have to be at least in working order, etc. With this company, your car could be a heap of ruin that doesn’t start, and they’d still make an offer just to take the scrap metal off your hands. Their website makes it clear that they accept cars of all makes, years and conditions, including classic models.
They also make no secret of the fact that they ideally prefer newer and low-mileage cars, which strongly suggests that they sell them on to others after acquiring them.
How Much Do They Pay?
The website doesn’t give you any firm indication of price, since every car might be a little bit different according to its exact circumstances. Their website reveals only that they make use of a “proprietary database” to do valuations. These are similar to commercial Black Book valuations which are not openly available to regular consumers the same way that Kelley Blue Book valuations are. They are valuations set for retailers and industry professionals so that they can maximize their margins at the retail level.
The general rules of thumb are as follows:
For scrap/junk cars, expect no more than $300-400 . This is about as good as it gets when dealing with pure junk that doesn’t start, is rusting and is only good for salvaging the metal for recycling. It’s quite rare for any car to be valued at anything above that, so don’t plan to get more.
Expect the price to be lower than if you sell privately. The only that you could get the Kelley Blue Book value or anything close to that is if you were to sell it directly to a buyer yourself using Craigslist or similar advertising. Selling via these online platforms comes with a premium that covers the convenience, collection, paperwork and speed of the overall transaction. You might close the deal within just 24 hours or so of making that initial inquiry, so that comes at a cost.
There is no negotiation. Finally, when it comes to these platforms, there’s no playing hardball or negotiating. They generally operate on a model of offering the absolute best price they can according to that aforementioned proprietary database. Their offer will be final, and so there’s no point trying to push them higher.
Conclusion: Should You Use We Buy Cars?
These types of companies have their fans and they also have their detractors. All it really says to you is that a platform like We Buy Cars is not designed to work for absolutely everyone. There are some circumstances in which a private sale is more appropriate, IE when you want to maximize the price, have plenty of time to make the sale, and are familiar with the procedures and don’t mind undertaking them. In other situations, IE the opposite of what we just described, then they present a tempting alternative.
At the end of the day, it has to come down to the individual buyer to decide what will work best for them.