For most new businesses, purchasing new, expensive sedans and stretch limos is unrealistic. The down payment and monthly payment is too high for a new company. They may choose to purchase slightly used vehicles that are lower in cost, yet still serve the same function.
However, for many, purchasing a used vehicle is a daunting task. For an entrepreneur new to the transportation industry, they may be unsure of current prices for used vehicles. They may also be unsure of how to spot a vehicle that was not well maintained and will eventually lead to costly repairs.
If you are considering purchasing a used vehicle for your limousine company, consider these 5 key rules:
You should attempt to locate a vehicle that still has at least one year or more of the factory warranty remaining. This will prevent costly repairs should a system malfunction on the vehicle.
When looking at a used vehicle, consider the current style. Most chauffeured vehicles tend to be black or white and follow a sleek body shape. You do not want to purchase a sedan that is ten years old and is out of date/style. It will not be marketable to most clients.
A Carfax report will inform you of the vehicle’s history. It will include:
- Title problems such as a severe accident, water damage, or odometer issues.
- Ownership history such as the amount and type of owners.
- Service history such as insurance claims, service records, and accident reports.
Paying a small amount for a Carfax report that details every aspect of the vehicle’s history will prevent you from purchasing a lemon that may need costly repairs.
Purchase only from a established dealer with a quality reputation. Purchasing from a dealer that has been in business 30 years will be better than the car lot down the street. They will have more experience appraising the vehicle and can offer accurate pricing. Find a company that is known for standing behind their vehicles. There is nothing worse than purchasing a used vehicle that malfunctions only to find that your dealer never answers their phones.
Research and educate yourself on the average selling price for a limousine in your geographical area. Note that prices will vary depending on your location’s supply and demand. If you find a vehicle that fits your requirements, don’t be afraid to offer the dealer a lower price. By entering the dealership knowledgeable and prepared to negotiate, you may just find the perfect used sedan for a reasonable price.
When searching for a used vehicle, always keep your targeted audience in mind. Knowing who this vehicle will serve will help you make a purchase that will equate profit to your business.
If you currently own a limousine company, you may want to consider expanding your vehicle fleet by purchasing an existing company.
The Tenney Group has been facilitating transactions of transportation businesses for over thirty-five years, specializing in business sales, mergers, acquisitions, and post-transaction services. We have experience dealing with a wide variety of companies in the ground transportation industry, including trucking, freight hauling, ambulance, school bus, and limousine businesses. Contact Spencer Tenney at the Tenney Group for expert assistance when buying or selling a transportation company.