Monday, June 10, 2024

How Do Car Auctions Work

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What Are The Different Types Of Carauctions

How a Dealer Car Auction works (Inside Access)

Theres a type of auction thats so incredibly popular these days they even get onto the TV, and thats the high-end classic car auctions such as Barrett-Jackson, Mecum and Sothebys. These auctions have restored and unrestored classics, barn-finds, resto-mods and all sorts of fabulous vehicles gear heads cant get enough of. This kind of auction is a fairly safe bet to buy from, but youre going to need deep pockets and theyre not the type of auction were really concerned with here.

Another big auction type is the closed auction thats onlyopen to trade buyers. These are where lease companies and rental companies sellthe cars theyre replacing, so the cars are pretty new and competition isfierce because this is where dealers go to get good quality stock for theirinventories. If you can find one thats open to the public you can get a goodquality used vehicle for a decent price, but youre probably better paying alittle extra to get one from a dealer with a warranty.

Public auctions are where the bargains are to be had because theyre where we find the ordinary, the everyday, and the mundane. Youre not going to come across an unmolested 1969 Ford Mustang going for a song, but youll be spoiled for choice if you want an old Crown Vic or a Toyota Corolla.

These public auctions have become increasingly popular in recent years, and they fall into two different categories government auctions and regular public auctions.

Do You Need A License To Buy A Car From An Auction

As previously mentioned, there are auctions that do require dealer licenses for participation. If the auction is classified as a dealer auction, or if youre looking to place bids in a section of a public auction designated for dealers, then you will need a dealer license. If you dont have such a license, you can apply to your state to receive one. This is a lengthy process which includes providing proof that you are, in fact, an employee or owner of a licensed car dealership and that you meet all the necessary requirements such as insurance for your business and a clean background check.4

I Bought A Real Lemon What Can I Do

Unless youâre particularly handy with a spanner itâs probably best to resell a car that has significant faults at auction. Unlike traditional dealers, auction houses are not covered by significant portions of the Sale of Goods Act. The Act makes provision for goods being of âsatisfactory qualityâ and says they must âmatch any description givenâ. Due to the limited amount of information available on cars sold at auction, youâre unlikely to get a refund or be entitled to repairs if a car has problems. Check the auction houseâs terms and conditions if youâre at all unsure.

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How Can I Avoid Making An Expensive Mistake

If you donât know a great deal about cars, bring someone with you who does. Youâll want an experienced pair of eyes to look over the lots, even if this is just a quick inspection. Donât go over your budget and donât forget to take into account the auction houseâs fees and other costs. None of these should be hugely expensive, but they can quickly add up.

Find The Right Dance Partner

How Do Car Auctions Work?

The first step is to pick the right auction company and the right venue. For example, if you are selling an Alfa Romeo 8C 2300, I wouldnt consign it to a small muscle car auction in North Carolina. Id talk to the auctions that have sales in Monterey or Monaco.

Once youve determined the best fit for your car, then you should contact the auction houses to see if they will accept it and under what terms. Some may not want it at all if they dont think it is a good fit, and others may only want it as a no-reserve lot based on its value or other factors. After all, the auctions know what sells, and they only have a limited number of run positions. It is their job to stock the pond with as many cars that will sell as possible.

The auction game is all about results. They dont make money on entry fees and no-sales it is all about earning commissions and maintaining sale percentages, which is crucial to gaining more consignments in the future.

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What Are Your Consumer Rights

Most of the time you will have few if any, consumer rightswhen you buy at auction. Most of the time the cars are sold on anas-is basis, so what you see is what you get. If a vehicle turnsout to be stolen you might have some come back on the auction house, but thisis unlikely to happen because the seller will have had to provide clear titlefor the vehicle to be accepted into the auction.

If you want to be able to complain and get some sort of recompenseif things go wrong with the car youve just bought for a knock-down price atauction, you shouldnt be looking to buy from an auction in the first place.You know the sayings you get what you pay for and ifsomething seems too good to be true it probably is? Well, theyre veryapt when it comes to car auctions.

How Repossessed Car Auctions Work

Dive into the world of vehicle auctions where the vehicles have been repossessed by the finance houses and are sold off to recover costs. This can be a gold mine if you know how they work and what to look for. We explain the ins and outs of this potentially lucrative side of car sales.

Car auctions have a mystery about them that can be addictive. There is always a rush when a car is being offered up for auction to the highest bidder, and when there are a couple of bidders involved in a war, there is plenty of adrenalin flowing.

Of course, underlying this excitement is the real knowledge that auctions can offer up real bargains in the used-car field. And, as long as you register with the auction house as a bidder, and can prove that you have sufficient finance at your disposal to bid on a car or many cars, you as a private buyer can bid against all the traders that normally make up an auction audience.

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Continued Investment In Technology

Recognizing the needs of a digital society, IAA is constantly assessing and developing technology to remain a leader in cutting-edge client offerings. IAAs mobile-friendly website with enhanced online vehicle search options offers new ways for buyers to find and bid on vehicles. The company introduced its first mobile app in 2010, allowing buyers to bid, buy, and pay for vehicles with their mobile phones. IAA also offers CSAToday?, an online resource providing comprehensive salvage analysis and information for the claims professional. According to John Kett, president of IAA, insurance providers can reap significant benefits from salvage auto auction companies technology investments especially for claims management and the disposition of salvage vehicles.

The company has also developed a series of mobile technologies to make it easier for buyers to search, bid on, and purchase vehicles from their cell phones or other mobile devices. By tapping into the GPS technology in smartphones, IAAs mobile site informs buyers which of IAAs more than 160 branch locations are closest to them. IAA launched new applications for iPhone and Android phones in the past year, giving users all the functionality of the mobile site, as well as a customized dashboard of user activity and alerts and the ability to participate in eight auctions simultaneously.

Will The Industry Change To Online Car Auctions Entirely

How a car auction works (USA, Canada)

Many would-be buyers want to see vehicles up-close before they decide to place a bid.

For example, G3 is a new 14-acre site in Leeds, dedicated to auctioning used cars the old-fashioned way – with people coming in and being able to inspect vehicles before bidding. Naturally, this is backed up with 3D imaging and online listings, so people can browse cars online before deciding to visit the auction house.

G3’s owner, Matt Dale, spoke to Car Dealer Magazine on the subject.

“We’re very much a physical-first in terms of what we’re trying to do…speaking to the buyers, the buyers still want to be able to come and touch and feel the vehicles. So we think its a wise investment… to invite those physical buyers as well as the online buyers.”

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What Things Should You Look For During Your In

Mismatching bodywork panels

This suggests there has been some serious work done to the vehicle – and it may have been in a collision.

Look for paintwork mismatches and shoddy shut lines.

Low quality repaints

This is probably just an aesthetic issue, although some paint touch-ups are done to disguise rust.

You’ll have a hard time getting your new vehicle back on a flat tyre.

Sign Up To Get Great Deals For Cars

Scoring a deal on a used car feels great. Not only do you drive away in the vehicle of your choice, but you save money in the process.

With today’s vehicles exhibiting excellent build quality and standing the test of time like never before, a well-maintained used car presents a good option compared to buying a new car.

When you factor in depreciation, you could save thousands of dollars on a used car yet still drive something that feels like new.

But when you buy a used vehicle from a car dealer, where does it come from? Have you ever wondered how car auctions work?

Let’s look at the details of dealer auctions and how wholesale pricing differs from what you pay.

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Ten Things You Should Know When Buying Cars At Auction

  • Be careful. This is where unsalable cars go to die. As Edmunds puts it, “If a vehicle has been traded in, leased, repossessed or totaled, it will find itself among the nearly 9 million vehicles that are purchased each year in an auto auction.” That doesn’t mean every car on the auction lot is junk. It just means lemons are out there, so be suitably suspicious and thorough in your inspection.
  • You will need cash or an approved loan, if your bid wins. If you plan to pay with a loan you have already secured from your bank, be prepared to cover a deposit once your bid wins. Find out in advance which credit cards are acceptable for this purpose. There will also be taxes, title and registration fees. If you’re financing the purchase of your car, you’ll likely be required to carry collision and/or comprehensive insurance by the lending agency. So, it’s probably also a good idea to talk to an independent Trusted Choice® agent to help you find car insurance quotes before you buy. Independent agents work with several insurers, and can comparison shop for you, for free.
  • Everything shines. Cars are often touched up, buffed and polished to a sheen for auction. This does not guarantee a solid car. Always check the car history, and see if VINs match between the dash, door and other points of identification.
  • What’s The Future Of Car Auctions

    How Do Auto Auctions Work?

    Mike Brewer was asked by Car Dealer Magazine about the future of car auctions.

    Mike said, “The future for car auctions is both. The need for a physical auction is always going to be there. Obviously online auctions are playing a massive part in the way the car world works – especially in my world – the classic car world: classic car auctions online are doing phenomenally well.

    “But there is still this need for people to get out there and touch the metal.”

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    How Am I Protected If There’s A Problem With An Auction

    This is the most important question related to any online auction or purchase process. Even with hundreds of photos, a video, a CarFax history report and a community of enthusiasts involved, a buyer in New York is still placing a lot of faith when buying from a seller 3,000 miles away in San Francisco. What provisions do Bring a Trailer and Cars and Bids have in place to protect someone spending tens or hundreds of thousands dollars on a used car theyve never physically inspected?

    As mentioned, both sites require a credit card to register to bid and a phone number to sell, and both charge the winning bidders card as soon as the auction ends. That discourages buyers from not following through on the purchasebut it still happens. Randy Nonnenberg told us Bring a Trailer has a 97.7 percent success rate on completed auctions, which means only 2.3 percent have something go amiss after a winning bid is declared. If its a buyer that refuses to follow through they are still charged the buyers fee and they are banned from the site.

    Conversely, what if the buyer follows through in good conscience only to receive a vehicle thats nothing like what was described in the auction? Again, this is a relatively rare occurrence because of the in-depth photography and vehicle history report presented for most cars. But it does happen and, like the chargeback situation above, theres not much a buyer can do after the purchase has been finalized and the money has changed hands.

    So Why Are Cars Auctioned

    There is a variety of reasons why cars end up at auction houses. Some of them are:

    • Some cars have stayed too long at the dealers lot, so they are auctioned off as an alternative option to recoup some of the money invested.
    • The original owners cannot meet up with their payments, so theyre repossessed and auctioned off by financial institutions to recover their money.
    • Some cars get to the auction house because they are being traded for a new one. In this case, private car owners exchange their old cars to get another car in return.
    • Some cars have suffered damage from weather conditions or accidents. After paying off the owners, the insurance companies want to recoup some of what they paid out. Due to the damage history, these cars can only be sold at specialized auctions. The damages could include scratches, dents, or malfunctions as a result of thickened car fluids caused by winter.

    To be able to fully benefit from and leverage car auctions, you need to know as much as you can about the different kinds of auctions out there.

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    A Growing Global Base

    IAA has built a robust footprint of more than 160 physical facilities across the United States and Canada. In addition, IAA continues to develop and cultivate a mature global base in more than 110 countries. To support the needs of its growing international presence, IAA provides buyers access to six languages through the companys website, including English, Mandarin Chinese, Spanish, French, Polish, and Russian. The IAA Buyer Services group is also fluent in ten languages to assist global buyers.

    Auction Day Inspect The Vehicles

    How a Dealer Car Auction works * Inside Acess *

    Arrive at the auto auction well in time, allowing at least 1.5 hours before the actual auction begins to take a good look around at the stock either being prepared or auctioned. Before you leave home, make sure you have the correct address and a good map, as many of the auctions are held in industrial/semi-industrial areas, which can be somwehat difficult to find. If you arrive late and feel stressed, it is not a good start to what could easily be a day of joy and fulfillment.

    On auction days it is likely you will be greeted by the auction consultants, but if they are all busy with other customers, ask the doorman for a copy of the “Guide to Bidding” leaflet or similar, which will identify the auction consultants and the layout of the premises. There may also be signs pointing towards the “registration office”, then follow the signs and follow given instructions for registration. If you have any queries do not hesitate to find and ask one of the consultants. They are there to help you and make you feel at ease with the auction process. If you have any general questions, contact the auction prior to auction day to have them answered.

    Your first surprise will probably be the size of the auction room it can often be as long as a football field and it will be full of vehicles. Enjoy the moment and dont be overwhelmed about all your options. A consultant will help you locate the type of vehicle you are looking for.

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    How Does The Auction Process Work

    Auction houses access used cars from a variety of sources, such as ex-police or government cars, cars repossessed by finance companies and former rental cars that are due for replacement. You can find auctions that only deal with specific types of vehicles like classic cars, as well as more general auctions.

    Here are the steps you can expect to go through when buying a car at auction:

    1. Research car auctions near you

    Search online for auctions in your area. After you find one youre interested in, check to see if theres a catalog available of the vehicles that will be auctioned. This typically provides information on each cars model, ownership history and potential costs for maintenance and repairs.

    You also might want to consider visiting a few auctions in advance to get a better understanding of how they work.

    2. Register in advance

    Youll likely need to register for the auction and provide identification in advance. You may also be required to prove you have enough money to pay for a car at auction, so have a bank statement, credit card statement or loan preapproval offer on hand just in case. When you get to the auction, the auctioneer will give you an identifying marker like a numbered car or paddle which you can then use to make bids.

    3. Compare the different cars available

    4. Inspect the vehicle

    5. Start bidding

    6. Negotiate with the owner if the car doesnt sell

    7. Pay for the car and transfer the title

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