On average, WeBuyCars (WBC) pays approximately R119,854 per vehicle it purchases and it turns around and sells that vehicle for R141,170.
These figures were determined by looking at the used-car giant’s latest financial results for the year ended 30 September 2024, the second report published by WBC since it was listed on the Johannesburg Stock Exchange in April 2024.
It was a bumper year for the company, seeing an overall revenue jump of 16.5% to a whopping R23.3 billion. It also increased the number of vehicles it bought by 17.8% to 165,185 and the number it sold by 16.4% to 167,741.
WBC attributes the growth to “higher volumes, higher average selling prices, operational efficiencies, higher inventory turns, and cost efficiencies driven by economies of scale.”
It also managed to maintain gross profit margins at similar levels to those recorded in the prior year, despite difficult trading conditions underscored by “low GDP growth, pressure on consumer affordability, high interest rates, and low levels of consumer confidence.”
From seller to showroom
The latest numbers show that WBC earned a total revenue of R23,319,200,000 between September 2023 and 2024.
During the 12 months, it let go of 165,185 vehicles in its inventory, indicating that the average selling price per unit amounted to R141,170.
We can also calculate more or less what WBC spent, on average, to procure a single car as well as what it took to get that car showroom ready.
WBC reported that the purchase of goods over the 12-month period worked out to R19,798,143,000.
Divide this once again by the number of vehicles it sold, and we arrive at an average purchase price of R119,854.
However, the company spends quite a lot on logistics, licence and registration fees, roadworthy inspections, and, especially, vehicle reconditioning before the car is rolled out onto the showroom ready to be picked up by its new owner.
These expenses were as follows:
| Expense | Cost |
|---|---|
| Inventory adjustments | R9,034,000 |
| Roadworthy and vehicle inspection reports | R88,348,000 |
| Dealerstocking, licence, and registration | R107,480,000 |
| Logistic costs | R150,806,000 |
| Vehicle reconditioning | R274,074,000 |
| Total | R692,742,000 |
Therefore, the total cost of inventories sold for WBC equated to R20,427,885,000.
This shows that it spent roughly R123,667 to purchase one vehicle as well as get it presentable enough to be sold for a good price.
Subtracting the average selling price of R141,170 from the average cost of getting a car showroom ready reveals that WBC makes about R17,503 on every vehicle it sells, however, this can’t be counted as pure profit.
The company reported a core operating profit of R1,221,500,000, which translates to a profit of R7,395 per transaction.
The remaining R10,109 went to payments such as salaries and wages, property taxes, water and electricity, and other everyday expenses it must accrue to keep the ship afloat.
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