7 Simple steps to success: buying a used car at a dealer auction
5 min readGood luck is a direct consequence of preparation! Our goal is for your next auction experience to be both profitable and successful. We have published this article to offer you some tips and tricks that will ensure your next experience is a good one. Check out these seven tips to win your next auction!
Your first step when purchasing cars from an auction should be to analyze the market and take into account which cars you already have. This is done in order to know exactly what you are going to the auction for and what you need most. When reviewing your stock of cars, consider which cars you have a lesser or greater number of, and which cars bring you the most profit. It is important to be aware of which cars are selling poorly or making little profit. It is also worth analyzing demand, in terms of the most frequently purchased and most popular cars. Always pay attention to trends, both in the market and among your customers.
Once you link all this data, you will have a clear idea of your goals and what you should be attending the auction for.
Know the rules of the game
Each dealer auction is held in its own way.
«Before starting an auction, be sure to know the rules.»
Find out what the payment rules are for this particular auction, and how to pick up and transport your purchase. Look at what the auction policy is for damage detection, paintwork and other crucial details. Most important of all, find out how bids work at the auction you will be attending.
We recommend registering for the auction at least one or two days prior to its start, even if you are going to participate online. Please note that sometimes your auction privileges will be higher with early registration. Take this chance!
Target your purchases
For the highest rate of success and the most reasonable purchase prices, it is important to decide in advance what you will buy. Almost every auction can provide you with a presale list of vehicles. This way, you know exactly what to look for.
Having received such a list, plan and go directly to the cars you are interested in (without forgetting the first point).
«Having a clear understanding of what you need will ensure you don’t miss an opportunity.»
The sooner the better!
Now that you’ve put in all this time and research, we recommend arriving at the auction in advance—as in the afternoon before it begins. What are the benefits of such an early appearance?
«It will be easier for you to inspect the cars before the auction than during it.»
Arriving early will give you the chance to inspect each car and make notes of suitable options, which will later help you to better determine their value. Take care to check the quality of all the cars you are interested in, looking for defects or shortcomings. Look at accessories, small parts and take a total assessment of each one. Going a day ahead means you can even pull the car out of line to get a closer look at it.
Know how much can you pay
Doing an early assessment will give you time to formulate your strategy, allowing you to focus on the vehicles that will bring the most value to your business. Remember, the best cars tend to be highly sought after at an auction. One common problem at auctions is when a buyer finds a great car and allows themselves to get too emotional. This leads to them spending more money than they can afford.
Make sure you set a price cap for each vehicle and never go above it. If the wholesale price eats up your profits you are wasting your own money. Make sure to take into account the condition of the vehicle, its mileage, and its history report. Also, consider the costs of possible purchase repairs and advertising.
As you learn more about auctions and fully understand the process of them you will be able to purchase some cars much cheaper than planned. It is very important to know both how much a given car is worth and how much you are willing to pay for it. Remember to always keep in mind how much you can afford to spend, and learn to bow out if a rate has risen too high.
Think about transportation
Most auctions are unlikely to provide you with transportation services; the best they will do is provide you with the contact details of their partner transport companies. If an auction provides you with transportation it may cost you more than contacting such a company yourself. Consider the location of the auction you plan on attending, as by doing so you may save yourself hefty shipping costs. Please make sure you schedule transportation for all vehicles you purchase. Auctions generally want you to remove the cars from the lot the same day, so be prepared to put them on a truck and hit the road. Constantly changing markets can make you rich one day and force you to sell at a loss the next. The faster these cars get to your lot, the faster you start making money.
It is very important to have a good working relationship with a loyal shipping company. Many auctions have kiosks where you can contact representatives of different transport companies. You will find that different companies specialize in delivering to different locations.
Forward to the goal!
At this point you've thoroughly considered all your options and have decided exactly what you are going to buy, right?
Don’t forget to learn the rules of the auction in which you are going to participate, and do not delay your arrival. Decide ahead of time how much you are willing to spend, and on what, always carefully considering both purchase and delivery costs.. We hope that after reading this article, your auction game plan is clearer and more concise. Plan your actions in advance to avoid mistakes and losses. Set a clear goal for yourself and everything will work out!