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How to Buy Cars at Auctions
Want to successfully buy and sell vehicles at dealer-only and public auctions? This course will teach you everything you need to know.
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Intro to Buying Cars at Auctions
Dealer-only auctions offer much better inspections, disclosures, and guarantees. They limit access is pre-registered and pre-approved licensed dealers, banks, manufacturers, and other commercial buyers.
1. Public vs Dealer-only Car Auctions
Public auctions provide little access to the vehicle’s condition until after you purchase the vehicle. Dealer-only auctions offer much better prices, inspections, disclosures, and after-sale guarantees. And Dealer-only auction prices are much lower than public auctions.
2. Types of Vehicles at Dealer Auctions
Auction vehicles include Repossessions, End-of-Lease Returns, Off Rentals, Fleet Vehicles, Dealer Trade-ins, and Salvage Vehicles. We’ll show you where these auctions are located and how to find the right vehicles, for you.
3. Registering for the first time
Dealer auctions require you to be approved before you can make purchases. National auction chains (including Adesa, Copart, Manheim, and National Powersports) allow you to purchase at any of their locations after registering. We’ll explain how to get registered at the leading auctions, quickly.
4. Checking-In to Buy on Sale Day
Dealers need to check-in on auction sale day and receive their bidder badge to get through the on-site security. Your bidder badge also confirms your identity to the auctioneer. When an on-site auction sale occurs, only your bidder number will be announced.
5. Auction Slang and Definitions
Auctions use a lot of slang and technical terms such as TMU, BOS, Legal Docs, MSO, Subject To, and others. We’ll explain each of the auction terms and even help you to understand what the auctioneer is saying when the bidding goes starts.
Auction Guarantees & Policies
Dealer-only auctions provide great buyer protection guarantees to encourage dealers to buy again and feel confident when bidding.
1. Seller Guarantees
Sellers must disclose any issue affecting the vehicle they are selling. These disclosures cover a wide range of issues including mechanical problems, frame damage, engine issues, odometer discrepancies, etc. We’ll explain these guarantees and what to do.
Reduce your risk when buying vehicles by selecting those eligible for return if you discover an undisclosed issue. We’ll explain those guarantees and where to find auctions that accept returns for any reason, up to 21-days after the sale.
2. Title Guarantees
The auction and seller guarantee that you will receive the title for any vehicle you purchase. And, they guarantee that vehicle’s title will match the announced status of Clear, Salvage, Lemon Law, or other branded type. Learn about the different title types and what they mean to you, as a buyer or seller.
3. Arbitration & Dispute Resolution
If you’re not satisfied with your purchase, the auction will provide an “arbitration” service to help you resolve any buyer/seller dispute. Learn how the arbitration process works and how it can benefit you if you have a problem with your purchase or sale at an auction.
Auction Tools to Predict Values
Auctions provide dealers with some excellent “tools” that help you understand what particular vehicles have been selling for -and- their future estimate auction values.
1. Predict Auction Prices
Never pay too much for a vehicle at an auction. We’ll show you how to predict the selling price of vehicles that you’re interested in.
2. Predict Retail Prices
It’s best to determine a vehicle’s selling price before you start bidding to make your purchases. Learn the best methods to determine a vehicle’s retail selling price. Estimated Retail – Wholesale Cost = Your Profit
Inspections & Condition Reports
Dealer auctions provide excellent condition reports with several photos, at no charge.
1. Condition of Auction Vehicles
The condition, age, and mileage of auction vehicles vary greatly. You will see “like new” still under warranty, high mileage cars in need of repair, and collision damaged vehicles in need of repairs before they can be sold to the public. Learn how to find and purchase “Green Light Guaranteed” vehicles.
2. Your Own Pre-Sale Inspections
Although a vehicle appears to be in good condition, a few minutes spent on your inspection could uncover significant issues and save you money in post-sale repairs. Learn how to perform your own, “walk-around” inspection to identify damage from previous accidents or needed mechanical repairs.
3. Pre-Sale & Post-Sale Condition Reports
Most auctions provide a “Pre-Sale Condition Report” that lists mechanical issues and potential damage, down to the smallest scratch. We’ll show you how to read those reports and understand what is covered in those reports (and what isn’t).
After the sale, you can order an optional, “Post-Sale Condition Report” looking for missed or undisclosed damage. In most cases, the Condition Report also provides you with the ability to return the vehicle for a full refund if you are unhappy with your purchase.
Vehicle Titles & Documents
1. Salvage & Other Branded Titles
We’ll explain the various “branded” types of titles and how they may affect you when you sell these vehicles to your buyers. We’ll explain Salvage, Clear, Junk, Non_USA, and, others from across the USA.
2. Grey Market Vehicles
Learn when you can (and cannot) import vehicles from outside the USA for sale in your state. Avoid buying any vehicle that cannot be registered after your purchase or sale to a buyer.
Selling at Auctions
Many Dealers sell most of their inventory vehicles at Dealer-only auctions. It’s a great opportunity for profit.
1. Consigning Vehicles
Dealers can take their excess or unwanted inventory vehicles and sell them to other dealers at “Consignment” auction sales. We’ll show how dealers earn a profit selling their vehicles there, without ever selling to the public.
2. Seller Responsibilities
Sellers have to work within the “rules” for each auction facility. We’ll show what you need to disclose, and what your responsibilities are as a seller.
Buying at Auctions
Here’s the exciting part – bidding on (and winning) the vehicles you want.
1. Auctioneer Tips & Slang
Most Auctioneers are honest and play by the rules. We’ll help you to understand what they are saying, how to bid for the lowest possible value, and the common mistakes that inexperienced buyers make.
2. Green, Yellow & Red Lights
Auctions use “traffic light” styled indicators to announce potential issues during the bidding process. For example, a red light could indicate a salvage title and a yellow light could mean DMV fees are due and the dealer will have to pay them. We’ll explain how these lights work and how they affect auction prices.
3. Bidding Strategies
Bidding involves more than just waving your hand at the auctioneer. We’ll show you the smart way to make an opening bid, bid against other dealers, and when to stop. Working remotely? We’ll explain how to make “Proxy” bids that allow you to make auction purchases without attending the auctions.
Paying & Transporting
Congratulations! – you purchased your first auction vehicle
1. Paying for your items
After the bidding ends, it’s time to make a payment. We’ll explain how to make a payment for your purchase using cash, check, or online ACH payment methods. Don’t have the money in hand? We’ll explain dealer financing and “flooring” that allows you to pick up your vehicle and pay after you sell it to your buyer.
2. Retrieving Your Purchases
You have a number of options to retrieve your purchased vehicle after the auction, starting with your “Gate Pass”. Auctions provide several options including their own shippers. We’ll cover those and explain how you can use your own transportation company or simply drive your purchased vehicles away.