One auction. One auctioneer. 121 vehicles. 86 buyers.
When you have 85 sets of eyes competing against your automotive tastes and your wallet, the chances of finding a good deal at an auction goes into a deep decline.
Such was the way of last Monday. But there were some surprises.
For starters, the inop vehicles were fairly marketable. Just in highly different ways. The first one that was sold at the side of the building was a 2003 Lincoln Town Car with a bad transmission and a fairly worn interior. A few scuffs and dents. 122k. I had a close friend of mine all over it. So I held off and watched it go to $2600 before selling.
The price was still too rich for my blood given about $1500 in additional repair and recon costs. Old V8 cars also tend to sit a bit longer on lots these days unless they sell for a cheap price or a low down payment.
Full sized new cars now have the longest average days in inventory at 90 days. Used full sized cars also reflect that like of buyer interest. So if it’s late model and big, I watch.
A 2003 model, like the one my friend bought, will likely have a bit over $4000 in it once everything is said and done. It may sell fast, or not. However even a $1000 down payment is higher than the current national average of $950. Try to get $75 a week as the weekly payment for this car and it will likely take nearly 9 months to make your money back.
A lot of deals these days have far longer breakeven points, as I’m about to show below.
The popular car with all the options may be an easy sell on paper. But you better sell that paper to a ready and willing finance company real quick because your breakeven could be as long as two years.
Consider a 2004 Honda Accord EX with over 160k miles, but all the features of the time.
Would it go for $5000 at this auction? $5500?
Try $7500 once the auction fee is included at the wholesale price.
The good news for a car dealer, is that finance prices for Camcords are about as high as helium. An Accord that has say, $8000 in it after recon and detail costs, may yield nearly twice that amount under a 48 to 60 month financing term.
The bad news is the risk and the marketability of that paper. It’s not easy to find a finance company that would be willing to buy paper on a car with over 150,000 miles. Even fewer will give you a good price for it. Chances are that they may only give you 65 to 70 cents on the dollar, and that includes having the customer pay on time for the first six months and other little hoops.
Auto finance hoops multiply as a car gets older and more used up. Due to the limits, some of the buy here-pay here operations will use their own financial resources to tote the note themselves. Or even access ‘funny money’ from the auto finance securitization markets to make whatever margins they need to meet their quarterly profits.
Those who can access these markets are the big guys in this business. As for me, the local independent, I would rather be buying older Buicks.
The only car I got that day was a 2001 Buick Century with a few scuffs and paint transfers to iron out from the senior citizen who owned it. Mileage was only 93k. One owner. No accidents. Nothing special… but the price. $1915 if you included the auction fee.
It’s a one owner with 11 maintenance trips to the dealership and a well kept interior. The perfect type of car if you’re looking to finance a vehicle that has been conservatively driven and well maintained. To be frank, I consider a vehicle’s condition to be ten times more important than the type.
You can always make good money, and build good relationships, if you sell a good car.
I can always find a buyer at a $500 to $700 down payment. The market is easy these days in terms of demand. What I need is something that will last them. Because if something breaks down on their car, I don’t get paid.
I estimate the breakeven for the Buick will be right around six months. Or if I sell it outright for cash, I may get a nice four figure return. That profit level used to be the norm for me on cash deals, even at this price range, back in the housing bubble days.
I miss those times. But then again, I think our society functions far better if we are ‘keepers’ of our cars instead of traders and debtors. For those looking for a keeper, a 90,000 mile unpopular Buick will cost far less in today’s market than a fashionable 160,000 mile Accord.
Steven, there must have been times this year you were tempted to buy the bottom of the barrel, cheap, rolling wrecks just to run them through the auction and make a quick buck.
I read somewhere once that millionaires tend to favor Buicks over all other makes of cars. Probably 90,000 mile, $2000 Buicks. :-) Nice Price.
Were all the cars on sale that day white?
Mike, I read somewhere once that for the majority of senior millionaires it wasn’t how much they earned over their lifetime, but how much they spent that made them millionaires.
Yes, alot of them drive Buicks……..and tend to maintain them well and keep them a long time. I always have an eye out for older, one-owner Buicks.
Not all white… some were beige! (jk!)
My buddy with the ’02 V6 Accord of many transmissions is about to put it on Craigslist. He was thinking 3K, I told him to list it for $5500 to start with. Be interesting to see what he gets for it.
3K would be a steal.
1) Buy it from him for $3K
2) Relist for $5K
3) …
4) Profit!
Might work out well, as a fool and his money are soon parted.
$5K can get you alot more than a car with a glass transmission.
I almost bought a 1997 Landcruiser with a bad tranny for only $500.
The auctioneer thought I was motioning to hold him… when all I was really doing was scratching my neck.
I told him I wasn’t on it. He ended up reopening the bid and selling it for a bit more money.
I usually avoid the ‘rerun through another auction’ route. If my head had been screwed up straight at the time, and I had time to look at it, I would have put the Land Cruiser on Ebay with the current condition stated in the description. It may have cleared $1000 even with the bad seats and the wore out transmission given that it had a few choice aftermarket add-on’s.
I could have also parted it out or sold it to a friend of mine’s junkyard. The former process is far harder than it sounds. You meet some folks who want to lowball you and wear you out. The later can work out a bit better, and you avoid the hassle of moving and storing the vehicle.
’97 Land Cruiser is worth at least $2k for the axles alone.
Probably close to 5k total part-out and scrap value if you’re willing to hang onto the hulk until all the meat’s picked from the bones.
Yep, even if it didn’t have the factory lockers I could make the 500 bucks back on Ebay in a day at that price. If it had the lockers then figure 2 grand for the axles alone.
While I generally agree with you that condition trumps brand, there are certain brands that are kryptonite and just shouldn’t be purchased by anyone except fanatics that are willing to eat the expense of inevitable breakdowns. Most German metal and older Korean cars come to mind. Buying a used Buick isn’t much of a gamble as they have had pretty good quality, but a used VW Passat or a BWM…pass.
Nice! I hear Buick is the new black ;-)
In the UK you do not need to be a dealer to attend these auctions so it is a great place to pick up a car you intend to flog to death commuting, as a dog carrier or generaly abuse. Most have failed their UK government MOT (roadworthiness) test and some are fairly easy to fix up. High mileage Beemers and Mercs sold for good money, sold to the posers, not to the wise. Your bland sedan with fairly good reliability and good maintenance records was always the true bargain.
The most fun you could have was buying a car for the demolition derby, Did not take much work to change and strip it to qualify and you had the most fun you could driving a car. Miss those days
Even adults have peer pressure to be ‘cool’. People will buy the high mile Honda, just so they will “not be made fun of” or “called old”.
OTOH, a few times in the past month, I saw a 20-something driving an older Buick, they don’t follow outdated stereotypes. A 45 year old still has 15 year old notions about brands.
My landlady got $500 for her 37,000 mile Buick as a trade on a Kia in 2009 and it seemed like pure charity. The heater core blew on the way to dropping it off. Sometimes free is far too much. There are a million reasons why an Accord costs as much as it does.
I agree. You get what you pay for sometimes. I despise Buicks, especially with a cloth interior.
Yes, that 166K Accord is a better car, for sure. But is it a better value, at least in Steven’s case? Not at all. Even if the Buick dies at 166K, and the Accord dies at 200k, the Buick owner will have spent a lot less cash. Might not be much fun, but the numbers are the numbers. And when you are talking cars at this point in their lives, its all about the numbers. In most cases, the Camcord is not the good deal when you are looking for the best value in old used cars. New or newer may be a different case, but not in the 10 year old category…and yes, Maladorian, the cloth in Centurys is pretty lame….
Condition Condition Condition. When a car gets to these mileage levels I believe the brand matters less than the upkeep. All things equal, the Accord should be the better car but over the course of 160k miles it is doubtful all things are equal. If the buick looks to be well maintained while the Honda looks like I could probably stand a putty knife up in the sludge in the oil pan, I’ll take the Buick. Also, any 160k car is still a 160k car. The era of Detroit Iron exploding at the 100k mark is gone and over 50-60k miles the Buick owner is likely to have a lower cost of ownership than the Honda owner in this example especially whenn the purchase prices are factored in.
What are the ones you go to? Down here we’ve got Manheim and Pickles. Those are open to anyone. I went twice to manheim to check their “clearance line” stock. There’s some good and very nasty stuff to be had.
There are others that are dealer specific.
I prefer the independents. Lower prices and less competition. Although Manheim and Adesa can be very good sources for new car trades.
I have had good luck with used Buicks. (Not for resale, but personal use.) Generally, their owners change the oil and don’t abuse them. And I like cloth seats.
$8000 wholesale on an Accord with 160K miles? I belief the phrase “get out of town” applies here. Give me the Century, I hate the way it drives, but I will happily pocket the difference and do something better with it.
Can’t imagine financing or paying nearly ten thousand dollars for a common family sedan with that mileage.
Hey! That Town Car needs a new transmission at 122K? Explain, Panther fans!
Actually I’m curious about the Townie too, is there some kind of transmission fault common on those years?
I wonder if some dealers buy Camcords and somehow export them for profit to get around a tarriff on new cars or something in the third world? That’s about the only think that makes sense to me on an ’04 Accord with high miles and probably on its third transmission… I believe the glass tranny was still used on 2004s.
That $7500 at auction for a 2004 Accord EX is crazy…I’m hoping that was at least the V6 for that kind of money.
Seeing these insane prices on old Camcords is really tempting me to go sell mine, I’ve seen people sell older and higher mileage Camrys than mine for crazy money but the problem is that my car’s been rear ended an unfortunate number of times so I’m not sure if the value will hold up if I sell it. *sigh*
I owned a 2003 Accord coupe V6 automatic and the one at auction appears to have the same (unique V6) wheels I had on mine. I sold my ’03 with 70k miles in good condition, with new tires, for $10,700 private party 4-1/2 years ago. At the time I figured I could’ve gotten another $1k if I was willing to wait a while.
There’s a Century very similar to the one you just bought a few blocks from my house. The owner is an elderly man who hasn’t been able to drive for 6-7 years now. When he stop driving, I offered him $3,500 for the car…very clean with about 40K miles. He refused. He recently asked me if I wanted the car…..he’s asking $1,500 now. The car has not moved in 6 years. I passed.
Take it!
This car has not been started or moved in 6 years. It’s been sitting on the driveway under a car cover that entire time. At the very minimum, it will need new tires, rotors and probably calipers. It will need all new belts, hoses and the fluids changed. The A/C has probably discharged by now. It’s got 6 year old gas in the tank. The tank is probably heavily corroded. Might be a good project for a high school kid, but I’m not going to put that kind of time into it. Pass. BTW, the car in New Jersey, 10 miles outside of NYC.
If Jersey weren’t so darn far I would, used car market not going to be that sensible anytime soon.
Steven, this is a very well written piece! I have spent thirteen years on the retail side of this business, working on both coasts, and for multiple dealerships. My great-uncle, may he rest in piece, owned a wholesale business and car lot for more than forty years. I have been a salesman, service writer, internet sales manager… (among other things!), and as you have mentioned, your reputation is everything in the car business. Although certain vehicles like the Century are not the most interesting or exciting, they offer customers a safe, reliable, form of transportation. They also offer you an opportunity to turn a fair profit, in a relatively short period of time, without creating a lot of additional headaches. Choosing inventory is always a gamble. Knowing your target audience is crucial.
How come we never get these kind of deals here in Colorado? Love to have that one owner Buick!