Well, let's first look at the two broad categories of dealers:
- Those that facilitate a sale by making the buyer and seller meet, and charge a fee (usually 1-2% from either party) for the deal. What you might call online classifieds, I would prefer to call Category 1 online dealers; they charge a small fee from the seller (but not the buyer), and their volumes make up for the small price asked for the service.
- Those that buy the car outright from the seller, refurbish it in some cases, and then sell on their own. Here, there may be those fly-by-night operators, or big corporate houses like First Choice or True Value.
So what value do they bring? Let's look at category 1 first, which is the type of dealer JLN went to.
These people set a market price for the car, especially for those not too savvy with checking second-hand car prices on the net (Team-BHP, Carwale etc.). Both the seller and buyer gets an indicator of what price he ought to expect, and the dealer often mediates between the two to arrive at an amicable solution (a lot of men hate the person-to-person direct haggling, and are far too testosterone-charged to let their wives do that job! -
My wife had to buy/sell the car... WHAT THE ...? ). So that's value addition #1. That service is not provided by the online dealers though.
Value addition #2 that a dealer does is to find the car you want. Let's say I'm looking for a blue Fiat Uno. Now such a thing doesn't really meet the eye too often. So the dealer gets into action. Not only does he scout around in the neighbourhood, he gets onto his local dealer-to-dealer network to find the required car. Once such a car is found, he lets you know. The commission that the buyer and seller pay is shared equally between the two dealers. Please note, all dealers in your city are friendly with all the other dealers, when it comes to buying and selling cars.
The paperwork and trips to the RTO to transfer the car to your name is not for someone who's confined to his office from 8AM to 8PM. For a small additional fee, the dealer does this for you too. That's value addition #3.
Apart from the above, the Category 2 dealer spruces up the car. Now, here lies the catch. It could be value addition if done by an honest dealer, or one of the corporate houses. A clean car is made cleaner (and shinier), and the buyer gets that feel-good factor when choosing his car. OTOH, a small dealer can well buy a crashed car for peanuts, do a half-baked restoration, and sell you a lemon for a high price. However, the extra price that, say, First Choice, asks for a spruced up car (above the market rate that a Category 1 dealer or the websites indicate), may not be worth it for those that know their cars. For a first-time buyer, that extra money is fully worth it, to avoid being saddled with a lemon. That's value addition #4.
Anything else (such as warranty or a couple of free services) that the dealer might offer, is just rubbish. For the
seller, it is always wise to hold on to the vehicle delivery receipt for ever, in the faint hope that some day cops will turn up at your door (the PB police once did at mine at DL), accusing you of having killed someone on the road and run away - and you'd better be in a position to prove instantly that the car stopped belonging to you from the date and time written on the
delivery receipt by the buyer - along with an
attested copy of documentation to prove the buyer's ID.