A very modern indoor used car lot

Understanding the Different Types of Used Car Lots

There are several types of used car dealerships, but the differences aren’t clear to the everyday customer. After all, you see a lot full of cars, and you figure that will satisfy your need for a ride. However, when you consider what you will be seeking in a car, you may want to take the time to understand how the different dealerships are unique. In the long run, you may be saving yourself some bills.

Before you go out shopping at used car lots, get a better understanding of what you’re getting into. Knowing how to distinguish these different types of dealerships can not only help you financially, but you may find better selection or better-working vehicles…

New-Car Dealership

aa row of brand new cars on an outdoor lot

Wait, what? It’s true. Dealerships that primarily sell new cars are actually a great option when someone is seeking a used vehicle. There’s no need for any trust issues, as the businesses often have to answer to the carmaker. These dealerships also usually have service departments, and there is a good chance you can take advantage of that even if you buy a used car.

You sometimes may be limited to certified pre-owned vehicles, which means the manufacturer has signed off on the used car. These are often accompanied by a warranty, and it’s the logical way to go if you’re just seeking a dependable ride. However, since they are being approved by the carmaker, you should expect a higher initial price. After all, you are being sold a dependable vehicle, which is a lot more than you can ask for from some used dealerships.

Independent Used-Car Lot

an independent used car lot as seen from between the backs of the vehicles

You’ll often find the best deals at independent dealerships, since they’ll gladly sell the cars that the new-car dealerships won’t waste space on. There’s a lot more flexibility at these lots, as you can either stretch your budget for a particular model, or you can buy a cheaper vehicle from a trusted source. Often times, these dealerships will cater to the area they’re serving, so you may find more rugged and durable vehicles up in the north, as opposed to the open-top cars in the south.

For example, dealership owner Steve Monroe told Philip Reed of Edmunds.com that his customers typically seek cars in the $6,000 to $9,000 range, so those are the vehicles he typically targets. Monroe did acknowledge that he also sells higher-price vehicles.

“Trucks sell real nice here,” he said. “But I also try to keep something that will attract a guy who needs a second car, maybe for his teenager.”

Of course, there are several things to watch for when buying from independent used car lots. There are obviously many long-lasting, trustworthy businesses, but there are also those who aren’t as hands on. They’re looking to sell their product and move on to the next deal. If you’re expecting some sort of professional relationship with your dealer, you may want to look elsewhere.

Furthermore, you have to consider the objectives of these types of dealerships compared to those affiliated with a particular brand. The independent businesses aren’t looking to satisfy any kind of quota, so they’ll be willing to actually walk away from a deal. If you’re looking for a car at your price, there’s a good chance you’re going to have to do a good amount of haggling to get your way. Reed suggests researching a particular vehicle’s “trade-in and dealer retail prices,” allowing you to better gauge the price range.

You’ll also want to consider that the cars on these lots often have higher mileage and shorter warranties. That’s why it’s important to know what to look for when you’re shopping for a used car, and several obvious warning signs should pop out. It’s also a good idea to get a vehicle report on a particular vehicle, as this will alert you of any previous issues.

Used-car superstores

a large arial shot of a huge used car super store

For those who dread the car buying process, this could be the route for you. There is no haggling, no hidden fees, no frustration. Of course, you may not necessarily get the best price.

These lots sell a boatload of cars, and there are many of them in big cities. As Reed points out, CarMax is a major superstore, and they offer “no haggling pricing” with longer warranties. We can’t say that your options are endless, but you certainly have a lot more choices than your typical used car lot.

As we mentioned, you might not find the best deal on these kinds of lots. If you’re looking for a hidden treasure, you’ll likely find a more favorable price elsewhere. If you’re looking to go out and purchase a car before lunch, a superstore is the choice for you.

Specialty Used-Car Lots

an indoor used car lot from below

The name kind of says it all. These used car lots focus on one specific brand (or occasionally a specific type of car, whether it be “pickups” or “vintage”). As Reed writes, the lot may cater to a community’s needs (selling what’s popular and logical for the area), or their inventory may force them down this road. For example, German dealerships are often considered specialty lots (since they mostly sell BMWs, Audis and Mercedes).

As the writer notes, these lots may not necessarily offer the best price, but they will offer the best selection. Their ability to cater means they likely have different variations of particular models in stock. While it may cater more to a niche market (like those consumers seeking vintage), it’s a reasonable option for anybody.

“Buy Here, Pay Here”

A hot buy here pay here lot in cincinnati ohio

These dealerships will help finance a buyer’s purchase, so these lots are popular choices among those who have bad credit. There are several annoyances that accompany these businesses (like having to deliver monthly payments in person), and there are also a handful of crippling consequences for those who don’t pay on time. These dealerships try to capitalize on those who won’t be able to make their payments, as the hefty fees (there are often interest rates that are triple those of a typical auto loan) often cause buyers to default on the loan.

However, if you are able to afford the vehicle, this could be the best choice. You won’t find the best selection, but you’ll certainly find some reasonable deals. If you’re able to make your payment all at once, there’s no reason why the dealership would turn you away just because you’re not in need of financing.


There’s certainly a lot to keep in mind, and even with all this information, we suggest you don’t go into the car buying process blind. It is best to determine which kind of vehicle you’re targeting ahead of time, and it may even be in your best interest to limit your selection to a particular brand. This will not only prevent you from getting overwhelmed, but you can also get a better understanding of how much money you may be required to spend.

Either way, we’re confident you’ll ultimately make the correct decision. Make sure to refer to a number of online reviews regarding particular used dealerships, as this will give you a better idea of the business’s legitimacy. Once you’ve narrowed in on a particular vehicle and your targeted car lots, it’s time to go shopping!

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