This car auction tips article is focused on automotive auctions. It draws on my experience with the industry over the last 30 years. I believe the knowledge and techniques will be helpful for anyone who participates in a live event regardless of the products being bought or sold.
First a quick rundown of my experience and some insight into why I know a little about the automobile auction process. In 2004 I moved to Florida and took a job with one of the largest auction networks in the U.S. as a reconditioning manager. On sale day I worked with security.
Back in the early 90s I worked for an upscale used-car lot that purchased their entire inventory from local sales like Manheim in Bordentown NJ. I would go with the owner to inspect the vehicles and provide an evaluation so he knew how much to bid on the vehicle he was interested in.
I wrote a few articles about his used car businesses that you may find interesting. This guy was very sharp and he taught me a lot of things about life as well as how to run a great used car lot that was unique and profitable.
Some of the most valuable lessons learned was when he would sell a car at auction. Yes, he was there to buy cars, but if a vehicle sat on his lot for two months without moving he would take it back to the sale and try to turn it for a small profit or at least break even. He was a big believer in turning inventory to make the stock look fresh.
A valuable auction tip I can pass on to you is, know the current value of the item that you're purchasing. When we went to the local car only auctions we purchased a certified NADA price guide on the day of the sale.
These pricing guides would state a standard value range for the vehicles we were going to purchase. Mileage, and condition guidelines where placed in a table with three columns going across that provided, wholesale, trade-in and full retail value.
My boss would refuse to pay above the wholesale price. This gave him the room he needed to turn a profit as he would sell the vehicle at full retail and in some cases above that. Another tip that works in conjunction with knowing the value is to know the true condition of the target item.
There is usually an inspection period before the actual sale starts. Another universal auction tip is to arrive as early as possible and perform complete inspections and gauge interest on the items you wish to bid on. In the instance of a car auction there are a lot of things to check. The place we went to in New Jersey had a test track so we could drive the vehicle and perform a full evaluation before the biding started.
There are a lot of techniques that both buyers and sellers use to try
to obtain the item they want to purchase or sell at the best price. Two
things that I noticed to be common at the place that we frequented was
the presence of snipers and shills.
A sniper is someone who is interested in a vehicle and waits until the final countdown to start bidding on that car. The sniper sits back to see who is interested in that particular vehicle. Sometimes the sniper approaches that person to work out a deal so they stop driving the price up. With an auction shill this is the opposite situation when the seller of the vehicle brings someone along with him that will bid on that specific automobile to move the price up.
Of course the seller of the vehicle is not allowed to bid on his own entry. It's against house rules to bring a shill along with you also, but we are talking about an auction filled with used car dealers and it is not uncommon for them to use tactics that bend the rules.
As far as my boss he would try to set up deals with other used-car dealers that they would bid on each others vehicles to drive up prices. Again do not try this at home, I'm just telling you the whole story.
If my boss got stuck with a car from one of these deals he would be able to return it for a full refund after the sale was over. I hope you found these auction tips helpful and remember to study the rules so you do not break any. Estate auctions and used car sales usually have different ones.
Regardless, look out for the snipers and shills and try to
avoid getting into a bidding war when the deck is stacked against you.
Some of the people at these sales are professionals that make a living
out of buying low and selling high. Also remember that the auction house
and seller would both like to see you pay the highest number possible.
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I have more stories about automotive auctions that I have been involved with. They are located on this next link that shares details about how the process works as well as a few more insider auction tips.
This next link will take you to the homepage where you can review what other kinds of information is available here.