The first rule is that everybody at the auction is your friend. This doesn’t mean you back slap or kiss ass (though many do this quite well). But I like to say that the three currencies in the auto auction business are conversation, collusion and company. Simply put, you converse and collude with those you hang out with in the hope that when it’s your time of need, they leave you the hell alone.
The major auto auctions have thousands of vehicles. Consequently they usually last several hours long, and between enduring 130 decibels of auctioneer gibberish and a pollution level that would make Ralph Nader willingly drive a Corvair, you really need to make the most of your time. Inspecting and appraising vehicles, talking about the events du jour, and generally passing the time between cars of interest is as much a part of the auction game as discussing things of interest between pitches at a baseball game.
Related to this, you REALLY need to pick your battles IF you’re going to get the deals. A manipulated market such as an auction is a force to be reckoned with. Consequently, you and your friends may like many of the very same cars. That doesn’t mean you need to go to war. But it also doesn’t mean that there will always be peace amongst the brethren. Most intelligent buyers at the sales will realize when their friends are on a car and, if it’s not worth fighting over, will give little more than a cursory glance and walk away. It’s buyer’s courtesy, king’s rule, and really just smart unless capitalism and greed say otherwise.
In this case you either wait for your friend to stop bidding or, if you have already anticipated the war, you have someone else bid for you. Afterward, saying something such as “Did you get it?” or “You got a good deal on that” is all a friend needs to know that you looked out for them. If they’re smart, they remember the favor.
I found that deals can be had at Manheim when bidding against dealers.
Dealers will frequently walk away from a car if the price does not allow them to make (enough) money on the sale of the car.
Many of the dealers I’ve spoken with won’t buy a car at auction unless they can make a minimum of $3000 when they sell it. Some dealers will walk away from a car even sooner.
The bottom line is that these guys need to buy the cars right or they don’t make money. I usually bid late hoping the dealer sharks will walk away from a slightly less profitable car.
-ted
I haven’t been to a car auction, but I’ve been to plenty of antique auctions and they work the same way. We furnished our house (over a period of several years) with very nice pieces for a fraction of what they cost “retail” at antique dealers.
I also learned that you have to know what you’re doing and have a good understanding of the item on the block. If you don’t, you’re toast. Understanding how antique auctions work is what has kept me away from car auctions; I know how the auction works, but I don’t know enough about which are the good cars.
It’s an interesting point Mr. Lang. I like your incites into the world of auto dealers.
I always viewed car auctions as more of a poker game, where you are trying to get the others to back down. You make them think that you will pay whatever it takes to get the car even when you are about to give up.
I’m having an odd trouble with this.
Steve seems like a decent honorable nice guy running an honest used car business. He gets to know his customers, turns them away if too risky or they feel wrong. Finances himself.
Now he reveals a reasonable camaraderie among used car dealers at his auction.
I am not doubting anything he writes. Just surprised at what seems like an alternative universe in his neck of the woods. (I’m still recovering from being raised on Long Island, NY)
Full of admiration.
Does anyone have Diogene’s cellphone number?
There is a good amount of body language, eye contact that goes on at auctions. Especially that actual conversations near the block are not easy (the auctioneers are loud).
The “friends” communicate what they need, to get a fair chance at owning “what they need”.
The auctioneer desperately wants 2 bidders on one vehicle, the smart bidders leave the auctioneer dry and stop bidding.
State car auctions are the only ones I go to. Everyone there is a stranger to me. I doubt that there is much one friend looking out for another going on. Perhaps among the dealers who are easy to spot since they buy more than one vehicle.
The cars are all pretty much the same: fleet type cars and trucks. To me the most important thing is to carefully look over the vehicles before the auction. Only bid on cars that you have inspected. Don’t bid on the first vehicles. And bid late. The last bid is the one that counts.
Bidding often stops at or near a round number like 2500 or 3000 since they are the mental stops put in by other bidders, especially non dealers who don’t look up trade in values. If you really want a certain vehicle a good strategy is bid fast up to where you think they will drop out. If the price is still okay and you guessed the other bidder’s stop out price, you get the car.
Since most of the buyers are not dealers at state auctions, the crowd thins out as some get a car or tire of the noise, pollution and heat/cold. Observe what the dealers are bidding on. They know the market and what is going cheap enough for them to make a gain.
Be wary of bidding more than what a dealer is willing to pay. That means you may not get a car at some sales. On the other hand, dealers may turn down hard to sell colors like green which can give you an opportunity if you can live with green.
I have bought 3 green vehicles at state auctions. Two Rangers and a Crown Vic. Don’t like green much, but the deals were okay.
Don’t miss the noise, exhaust fumes and the peripheral distractions. Not to mention the crack of dawn road trips and rush hour returns. I enjoy bidding from the comfort of my desk. Fully armed with books, data and internet access.
johhny ro
You’re much closer than you think.
A “used car salesman” is still a “used car salesman”
I might tell you I only have a “forced accumulation of disposable assets” but that doesn’t change the fact that my toilet is stopped up with sh!t.
I see these articles written about the blissful nirvana of getting these sooper-dooper, highway miles-only, low milage creampuffs, but then see the CL ads in Atlanta by unnamed “used car saleman” for the 150,000 mile, very tired but very shiny whatevers. In my opinion, for anything domestic, and that included the transmission sucking-Caravans, brake-eating Freestars, GM yuk, the value of said vehicle at 150,000 miles is ZERO. Or something very close. Unless you enjoy death by a thousand cuts. Or 4 block commutes.
A good well-cared for domestic is better than an abused import. At the end of the day, you have to know what to look for.
“The bottom line is that these guys need to buy the cars right or they don’t make money. I usually bid late hoping the dealer sharks will walk away from a slightly less profitable car.”
You can do well with this strategy. Although you should be aware that during the first quarter of the year we have ‘tax season’ which usually increases the prices of all cheap vehicles considerably. The reason is that most folks come back with their tax refund checks and use it towards either buying the car outright, or putting a down payment.
findude: Your advice is well heeded. It took me several months as an auctioneer and ringman before I bought my first car at auction. when I taught at Emory my advice had always been to keep your arms folded and simply watch at a car auction because the uncertainty is high, and the games played are far more sophisticated than most people realize. When you stand back and watch it’s easier to put the pieces together.
MBella: Good point. You should only bid up to what you’re comfortable. I always tell folks who are visiting auctions for the first time to write their price down on a piece of paper. That way, if the price goes over that mark, they don’t end up with buyer’s remorse.
Robert Cialdini referred to this as the influence of ‘commitment and consistency’. Once you commit to a certain course of action, either in writing or verbally, you’re less likely to change your mind.
johnny ro: Many of the largest buyers at the auctions are not ‘dealers’ in the sense that you know them. Wholesalers, dealers who exclusively sell to other dealers, are usually among the strongest buyers at most sales. Also, most of the larger dealers will employ someone to do their buying and selling instead of the dealer doing it themselves.
The traditional dealer who buys and sells his own inventory is actually a minority at most auctions. At least as it applies to the vehicles actually purchased and sold. Many of them will either buy from wholesalers or seek a variety of alternatives that are available in the marketplace.
AGR: You’re right. When I’m an auctioneer, I try to bump the vehicles up to a sellable range in the hopes that I get that one bid which will get me a sold vehicle. During the less busy times of year, the near majority of dealer consignment vehicles will be sold this way.
97Escort: Nothing sells worse at the auctions than ugly. It’s also the hardest to sell, which is why most dealers will stay away from cars that seem unappealing.
Bridge2far: I think the online method will actually take over in the factory and fleet lease markets. The largest salvage auction company already does everything online, and most of the major players in this game will offer online bidding to their customers.
That’s one of the many reasons why I branched into the dealer side of the business.
Countryboy: “In my opinion, for anything domestic, and that included the transmission sucking-Caravans, brake-eating Freestars, GM yuk, the value of said vehicle at 150,000 miles is ZERO.”
I’ve never met a real country boy who believes that. Domestics are actually predominant among the rural dealers that I know. Auctioneers also buy domestics with full-sized cars and trucks being the predominant vehicles. The going wisdom in our business is to buy them with between 50,000 to 80,000 miles and sell them once they hit between 200,000 and 250,000 miles. By the way, it says a lot about a man when he considers his ‘sh!t’ to be an asset.
@johnny ro :
There is definatly an understood honor among thieves for the repeat players.
Used car Joe that is a onesy twosy player, is a a light player bc he has not mastered the game yet.
In some cases, used car joe can buy the car cheaper by telling kingpin wholesale johnny what he wants to pay. IE I’ll give 20k for this, through your reputation and intimidation and having this lane wired you can prob buy it for less. So you buy it for me, and I’ll buy your auction ticket for 500 profit.
Seriuosly, many cases used car joe can get unit for 18500, bc kingpin johnny isn’t manupulating the lane and driving joe upto the end money.
Like I said, there is honor among theives, and there is DEF politics in the auction lanes, unspoken, but well known for the literate.
I go with my American car loving friends and then bid on the foreign cars. We work together, “Did you see that nice Chevelle?” I ask, or they ask “What the hell are you bidding on?” Most of the time we go for fun and are too poor to actually make a deal.