U.S. Used-Car Sourcing Guide: Spotting Defects, Returns & Auction Traps Before You Buy

Sharing My First-Hand Experiences of Starting a Business in the United States!

Hello, I’m Suzuki, founder of Eco Drive.

Drawing on ten years of running a company in the U.S., I’d like to share what I’ve learned firsthand.

This time, following the previous installment on bank financing, we’ll dive into how to gauge quality.

How I Funded a Used-Car Startup in the U.S.: 10-Year Journey

Launching a venture meant overcoming countless hurdles.

I hope you’ll find some of these insights helpful—and enjoy the read!

Sourcing Products & Assessing Quality

After launching my company, one of the first hurdles I faced was figuring out how to judge quality.

If you’re in the business of selling physical goods, purchasing inventory is unavoidable.

The United States can spring surprises—both good and bad—that you’d never imagine encountering in Japan.

In the sections that follow, I’ll share lessons from my own experience that will help you not only when sourcing inventory but also whenever you’re buying anything in day-to-day American life.

The Highly Tricky Job of Sourcing Used Cars

In the United States, sourcing inventory can be an extremely tricky task.

That’s because if you can’t properly judge quality, you can get taken advantage of in no time.

One of the products we deal in is used cars, and the vehicle we purchased can sometimes turn out to be completely different from what was advertised—or in shockingly poor condition.

In Japan, you can usually place a fair amount of trust in the seller when sourcing goods, so this is a point that requires extra caution in the U.S.

You Also Need a Keen Eye When Sourcing New Products

Besides selling used cars, we also handle a variety of services such as vehicle maintenance.

For instance, when we order brand-new dash cams, it’s quite common to find units that arrive scratched or even broken straight out of the box.

And remember, this caution applies not only to used items—brand-new products demand just as much vigilance.

Why do issues like this arise?

There are several possible reasons.

Why Brand-New Shipments Often Contain Defective Items

There are three likely reasons.

First, lax quality control during manufacturing allows faulty units to be shipped out as-is.

Second, the products are handled carelessly in transit and arrive damaged.

Third, items that customers bought elsewhere and then returned get mixed into the batches you receive.

That last scenario may sound unbelievable to those of us from Japan, but in the U.S. it’s an everyday occurrence.

America’s Return Culture

For example, during the Super Bowl—the biggest sporting event in the U.S.—large-screen TVs sell in huge numbers.

But once the Super Bowl ends, many of those TVs are promptly returned.

These sets are, of course, far from unused.

They’re unboxed, enjoyed by the whole family for the big game, then re-packed and taken back to the store.

Such practices are perfectly commonplace in the United States.

What’s more, retailers rarely bother to check for scratches or test functionality before putting these returns back on the shelf.

Because returns are so easy in the U.S., you need to scrutinize even supposedly “brand-new” inventory with great care.

Used-Car Auctions: Where Assessing Quality Gets Even Tougher

Even though sourcing brand-new items already involves plenty of pitfalls, buying used cars—our main product line—requires even greater vigilance.

While we sometimes purchase vehicles directly from private owners, most of our inventory comes from venues called auctions—wholesale marketplaces much like a fish market.

At used-car auctions, it’s common to see vehicles that are already faulty cleverly disguised and sold as if nothing were wrong.

These cars do undergo pre-auction inspections, but the checks are so superficial that the reports are virtually useless.

If one of these vehicles ultimately reaches an end customer, issues surface during use and we end up facing complaints.

Not only does this inconvenience the customer, it also damages our reputation—nobody wins.

The Single Most Crucial Step in Sourcing Used Cars: Post-Purchase Inspection

To avoid worst-case scenarios like these, a thorough inspection right after purchase is absolutely essential.

Carefully examine every vehicle for hidden issues; if you discover problems that weren’t disclosed, contact the seller immediately and return the car.

Returned vehicles often end up on another dealer’s lot touted as “like new”—that’s the reality of the industry.

For those of us running a used-car business in the U.S., accurate quality assessment is mission-critical.

Our Vehicle Procurement Is Handled by a Pro with 20+ Years of Experience

In our case, vehicle sourcing is overseen by a seasoned professional with more than 20 years in the industry.

Thanks to that depth of experience and knowledge, we can prevent many issues before they ever arise.

After each purchase, our in-house mechanic Okuda performs a thorough inspection.

He honed master-level skills while working at Toyota in Japan, then moved to the U.S., where he earned top-tier certifications—truly a pro among pros.

As a company, we invest in securing such specialized talent and expertise to maintain the highest levels of quality and reliability.

In Closing

In the United States, if you can’t accurately judge quality, you can be blindsided and incur major losses in no time.

I hope this story proves helpful—even in a small way—to those planning to launch a business in the U.S. and to anyone else who may find it useful.

Doing business in America is a parade of challenges, but with the right preparation and strategy, I believe you can overcome them.

See you next time!