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The used car market is big business. And although many consumers believe used vehicles come from dealer trades and private sales, most used cars bought by dealers are from auctions. In fact, most dealerships you see selling relatively new cars at good prices are most probably getting them from the best auctions in the country that specialize in connecting dealers to these vehicles.
Working with Online Auctions
If you’re a dealer that’s just scraping local inventory from private sales to support vehicles sales on your lot, you’re missing out on an excellent opportunity to bid online and get great deals on all kinds of vehicles. Many of them are very new with very few miles.
There are several tricks at dealers used to get the best deals. Most of the time these vehicles are traded in, leased, repossessed, or totaled vehicles. So there’s a lot to choose from. Most dealers will want to stay away form totaled (salvage title) vehicles.
The prime inventory that is of the highest quality will usually be new vehicle inventory that is being sold at auction because it did not sell on the lot. This can happen at any dealership, and some deals are found there that can be great for your bottom line as a dealer.
Bank repossessed vehicles are the next tier of quality auction cars. Banks want to auction these cars off to get what they can for them to recover at least some of the financial loss. These can be in great shape, just the owner couldn’t afford to keep the vehicle. Some have minor damage.
Rental sale vehicles are also pretty ideal. They are very well maintained, and rental companies usually let them go after just 20-30,000 miles. This is great opportunity because bidding at the right time for the right vehicle can make for an excellent buy. This applies if you are a dealer or not. Some auction sites specialize in rental cars.
The next tier can be be highly profitable but risky. These are salvage title vehicles. To many, salvage title means structural or damage the compromises the vehicle so badly that it can’t safely be repaired. This isn’t true necessarily. In many cases, salvage vehicles are vehicles that an insurance company deemed a total loss because the cost to repair exceeded what they could reasonably expect to shell out if they just let it go to auction and paid off what is owed to the bank or the owner if it was free and clear. The problem is you can’t “unsalvage” a vehicle by making it like new again. That designation will remain with the vehicle for its whole existence. This lowers resale value significantly. This is a major consideration for both the dealer and the buyer later on.
Regardless of the vehicle condition you want to make sure that even if the vehicle does have a salvage title, that the damage doesn’t reach any expensive mechanical parts. It can be hard to gauge through images, but if you see significant front end damage, fluids, or heavy wheel damage, you may want to keep those costs in mind when bidding. If you are new dealer, these deals can be tempting. But know that experience is key.
Best Online Car Auctions for Dealers
The name says it all. Focused mostly (but not exclusively) on insurance auctions, IAAI is a great stop to land your dealer license and bid on some premium vehicles.They handle total-loss, recovered-theft, fleet lease, dealer trade-in, and damaged rental vehicles since 1982.
Copart is the heavy hitter on this list, having over 200 locations and thousands upon thousands of vehicles on hand. They are the self proclaimed leader in online vehicle auctions and they very well may be. They over 135,000 vehicles sitting on over 8,000 acres of land. They turned 35 in 2017.
Manheim is the more refined of the bunch, providing shrives for dealers are looking for, such as selling off undesired trade-ins, powersport vehicles, recreational vehicles, boats, and more. They are a one-stop-shop for a range of services including reconditioning vehicles for resale. This includes detailing to light mechanical repairs. Many big corporate dealers use Manheim, but smaller ones find deals there as well.
Like Manheim, Adesa boasts a full range of services and caters themselves to dealers needing a full range of services. They cater to Manufacturers, Banks, rental companies, fleet companies, insurance companies. They have great inventory and expansive reach. They also do well with marketing aged and high mileage vehicles.
Best Online Car Auctions for the Public
This one is definitely for the public. They access all the auctions and combine their listings on this website. They then transmit your bid to various auctions like IAAI and Copart, buying the car on your behalf using their dealer license for a flat fee of $299. Wish we thought of that one first!
This one really needs no introduction.eBay is the ultimate vehicle site for the consumer. This is however full retail since it’s open to anyone. It’s gotten harder and harder to get a great deal on eBay because of their immense reach and everyone knows them.
This is another auction site open to the public. This is a safe consumer auction. They take inventory that is in great shape, and pick vehicles that are in prestine shape. Try them
Remember to factor shipping costs!
There are many times we’ve had customers that bid at an auction that’s far from home, only to find out the shipping slashed their profits. Be sure to get an instant quote before bidding. Use our site as much as you like, free.