I’ve been a car dealer for the past twenty years. Living in a small town and moving my business three different times, I can’t say that I have a large clientele. A lot of dealers will attend weekly auto auctions and bid on a few cars and come home with one or two great deals. I used to attend the weekly auctions, but for me, I do best with online auctions.
But before discussing online auctions, I have to say that I learned a lot by attending the weekly auctions. Most of these auctions were held in a city a couple of hours away. I learned that you really have to pay attention to what’s going on. There were a few city dealers who really tried to get rid of cars, just like in the game Hot Potato. The dealers knew the cars had numerous problems, but only alluded to the more obvious ones, such as any engine or transmission problems. I would walk around and hear other dealers warn either other to not bid from certain dealers.
I also lost money at an auto auction. Because I was an unknown dealer, even though I was very honest about the cars I was selling, the cars went super cheap. I realized that dealers will seriously bid on cars from other dealers who have a good reputation and are well known, but if you’re an unknown country boy like me, they don’t trust you. It really taught me that you need to know whom you’re buying from and that I most likely won’t do well selling cars via auto auctions.
My favorite online auto auction deals mainly with vehicles that banks need to sell. Most of these cars are ones that have been repossessed and really don’t have anything wrong with them. I’m able to study photos of the cars online, read thorough descriptions, and then I look up the values of the cars that I’m interested in. As stated earlier, I don’t have a clientele, but I do know what types of cars people in my area are looking for and I seem to have a knack for bidding on cars that I’m able to quickly turn around and sell within a month. It also helps that the auction firm sends out the previous auction’s final bid amount for each vehicle that was sold. This has helped me know what type of cars sell well and whether or not I should bid a tad bit higher on any particular cars.
It takes discipline bidding online. I typically look for the loan value of a car, which actually is one of the lower values, and set my highest bid $100 beyond that value. It’s an adrenaline rush to place a bid! Your name automatically comes up as you bid and in the back of your mind you realize that this is for real! For anyone not familiar with auto auctions, you have to show proof that you are a dealer and you must have good bank ratings. Once you place a bid, you’re legally bound if you’re the winner.
I always look for vehicles that have a green light which indicates that the car is in good shape and everything is working as it should be. I avoid anything with a yellow light, which means there are some issues with the vehicle. I’m not a mechanic and I’m not going to pay someone to fix a car. Recently I was bidding on a 2010 Dodge Journey. I put in $9,500 which was my top bid and the bidding began at $4,000. For the first few minutes no one else was bidding! I knew that I would never get the car that cheap, but for a few minutes I could dream. Then the bidding got going. Next was Tom at $4,500, followed by Troy at $5,000, and then back to me. At some point Troy dropped out and Tom and I were going neck to neck. Finally, the bidding stopped at $8,750 and I won! My wife laughs at me because I always do a little happy dance when I win. The next day a friend and I drove to pick up the car. I had it inspected and sold it for $12,095 two weeks later.
If you’re a car dealer I highly recommend checking out auto auctions. You might want to go and just be an observer for a few times. Be sure to do your homework and know the current values of the cars you’re interested in. Also, bid on cars from reputable dealers.