Dealer Auctions info
 

Hey everyone i needed some information on dealer auctions. Everytime I read a carfax, I see auto auction, auto auction, auto auction blah blah, then they land on the used car lots. These cars almost run brand new, and I know they go alot more cheaper than on the lots. is there any scams or anything? I know that only dealers can go, but are these cars good? hows the warranty? I heard from 2 of my friends so far that they have a green light on some that say it is fully covered etc. One scam I heard was if you take a dealer, the dealer might have one of his friends bidding on the same car raising the price, but I dont see how that would affect me because I would have a set limit. anyone have the latest info and scams? Thanks!

My mechanic has a dealers license. I bought 4 cars at auction through him (Acura TL, Volvo 960, Volvo 940T, Honda Accord) . He buys monthly to ship to Russia. They come from another dealer that took them in on trade, or off lease, and didn't want to keep them on their lot. Sometimes for mileage, not a late enough model, overstock, or not the popular model they want. We use a report of selling prices from prevoius auctions to determine what is a good deal. Larger auctions, such as those in Orlando and Tampa, have good deals because of the large volume. You have dealers registered there from several states away, both buying and selling. Haven't noticed anything fishy. The sellers all say they are perfect but they have no idea. You look the cars over before they roll on the bock, listen to the engine, and make a judgement.
Gene

no test drive?

No such luck. Most times you don't even hear it running until it is in que for the auction. Then they let you jump in and check under the hood again. I've never been stung mechanically (knock wood) but everyone that had "Ice Cold AC" written on the window failed within a month.

what about those that supposedly have a "green light" or are certified like the manheim auctions?

There's some definate misinformation here. Something like 70 percent of the used cars on the market at a dealer were either bought wholesale (from a larger dealer) or from a dealer auction. While its true that the vehicles are cheaper most have dealer prep issues that need to be done (i.e. scratches, dent removal, bumper painted etc so in reality they for the most part aren't what they are cracked up to be. If a dealer thinks he can make money auctioning a car from the showroom floor they'll do it! It isn't as crazy as it sounds as the PT Cruiser, Scion (when they were only a west coast thing were shipped and sold new on the east coast), new H2s when they came out, basically anything people want and will pay a premium for to be the first or in most cases something that will make people stop at a lot.

Most autions sell based on a green light red light policy. Green light means the car is mechanically fine and needs nothing that isn't visual. It can be arbitrated within a few days of the sale for things like an engine miss, tranny issue, odo tampering frame damage that wasn't disclosed, misrepresentation, etc. Red light means buyer beware or in most cases the dealer or leasing company just needs it gone on their books and don't want to take a chance that it could get arbed and not sold. These tend to be higher mileage cars, wrecked cars etc but can be perfectly fine too.

While its true you don't get to drive the car before purchasing in most cases places like the real Manheim Auto Auction in Manheim PA (where I once worked) keep the keys in the cars. With 10,000 or so cars run a day they kinda have to;) . Anybody is pretty much free to walk the lots and look at and start what ever they want once its parked (usually the day before the sale).

As for price. Sure they're cheaper but they also need things done. Lets take my SVX that was bought at auction by the place I got it from for example.

Sales price at auction $6990.
Auction fees $250
Transportation to the dealership $100
Oil and Tranny fluid change $50 (VERY IMPORTANT AS CARS RUN FOR HOURS ESP IN THE WINTER TIME SO THEY'RE WARM for the two days past death drivers these places use).
Now the price is up to about $7400 without anything really being done.
Add in dealer costs such as advertising, lot rent, warranties, staff salaries, etc and bingo a sales asking price of $9495.

Of course some lots that sell auction cars do no prep work at all which is why auction cars get a bad rap. Think about it. Are you likely to change the oil or do your last $300 service before turning in a lease car? Most people are lucky if they change the oil every 10k on a leased car! These dealers sell slightly cheaper than the more rep. dealers but in reality make more than most of the rep. dealers since they don't have the overhead. Personally, I'd prefer to buy from a dealer and ask for the receipts of what was done (trust me they have them) since they got the car. A dealer is like anybody else... entitled to make a living. Sure some will mark the car up $5k if they get a great deal on something but usually the mark up is amazingly low esp. on "average joe" cars where the competition is tight!

Oh yeah, paying $3000 is definately worth it compared to living through the lack of hygene at Manheim on a 100 degree July day in my opinion. Remember, I live in Amish country and smell some very unplesant fertalizers on a reg. basis but that doesn't even compare!:D

wow benebob that was alot of info and it helped alot, so do you think it would be logical to get a car from there? or pay the mark up of the dealer? I can do the oil changes and minor stuff. I heard theres cars in there with such low low miles!

So you can take out dents and paint too? Personally I wouldn't buy there with my experiences and knowledge unless I was buying a TMU car that I knew wasn't TMU total miles unknown. They get tons of title screw ups that still need to be sold regardless of price. Oh and how are you planning to finance it? They'll only take cash and dealer checks on the day or credit if you're dealership has credit?

Currently you have 1 hour to arbitrate a mechanical problem, overheating, slipping trans, IF the problem exceedes $400!
If its a frame damage, flood car, you have 1 week to arbitrate.
So when we bought a 70,000 mile super clean Jeep, and just over one hour away from the auction it overheated smoking the engine, WE were screwed, and had to replace the engine when it got home.:(
And the 96 Mustang GT with the PERFECT CAR FAX REPORT!!!
Discovered frame damage two years later when the bondo over it fell off!:eek: Screwed again!:mad:
This stuff is offset by the dealers who spend hundreds of dollars to make the car right, and then have to take it back to the sale to pay off their floorplan debt on that car:confused:
With our floorplan you have three months to pay off the floorplan, or short term loan to buy the car.
If it does not sell in that time, for whatever reason, it has to be sold, even at a loss.
Its a vicious circle, with more than enough stress.
It is a very hard way to make a living!:(
So boys and girls, stay in school, get a great education, followed by a good job, live long and prosper!:cool:

"So you can take out dents and paint too? Personally I wouldn't buy there with my experiences and knowledge unless I was buying a TMU car that I knew wasn't TMU total miles unknown. They get tons of title screw ups that still need to be sold regardless of price. Oh and how are you planning to finance it? They'll only take cash and dealer checks on the day or credit if you're dealership has credit?"


I can take out simple dents and do simple paint :D, but I was going to take cash.

Ah but you can have it "looked over" by most auctions which will for a fee "guarentee that there aren't any of these issues or the auction will buy it back.

Like I said I wouldn't buy one off the auction floor nor would 95% of Manheim's employees. That should tell ya better. Like SVXfiles shows, even trained dealers get shafted on cars at times. A novice typically can't even hear the auctioneer at a place like Manhole. They here the 15k people there and the background noise of 30 auction lanes running at the same time. It is definately a sight to see.