How to Win at Car Auction

Car dealers understand that turning over inventory quickly is the key to profitability. Adding cars to your inventory and finding satisfied customers to purchase them means you are doing your job. However, when inventories run low, your sales will suffer, thus quickly replenishing them at auction is a must. Here is how to win at an auction without losing your shirt.


car auction
Winning at car auction takes research, determination, and negotitation.

Arrive Early and Inspect

As a dealer, you may arrive at the auction early to inspect the vehicles before they are offered for sale. Find out the earliest time you may arrive, getting there before the crowds arrive to begin your work.

If there is a parking lot plan available for your review, then obtain one from the front desk. This will save you time and allow you to identify the cars you are most interested in buying.

Head out to the lot, examine the cars that interest you, then determine which ones meet your criteria. Each car should have listed on it the name of the seller, mileage information, the model year, and a registered user number. The condition of the vehicle may be listed as well as the lane assignment when it is auctioned.

Plan Your Bids

With some time to spare, you can decide which cars you will bid on. You can also use the interlude to research prices by means of your smartphone. Visit your favorite price valuation site to key in the required information.

Establish your top price for each vehicle and determine not to go above it. Quite easily you could win at auction, but lose when selling the car to a customer. Only you know your overhead costs and profit margins.

Monitoring the Car Auction

Not all auctions are the same, but what is usually common are the auction monitors. Specifically, these monitors display information about the vehicles, including their sales status.

For example, in some cases, there are “if” bids, which means the bidder will purchase the vehicle only if the seller agrees to the price. Typically, that price is below what the seller wanted, but the seller must either accept or reject an offer within a certain timeframe. You may be allowed to present your own offer on auction sale days and win if your price is accepted.

Sale Light System

Automotive auctions often make use of a light system that works in conjunction with each announcement about the vehicle to be sold. Thus, if you miss hearing the announcement, the color of the light will represent the status of the vehicle.

A green light may signal that the car is being sold free of any known major defects. A yellow light denotes caution and that means listening to the accompanying announcement regarding its condition and arbitration. A red light signals that the vehicle is being sold “as is” and thus is not covered under the auction’s rules for arbitration.

A blue light usually points to a lack of a title. Here, you can bid on the car. If you win, then the seller has a limited time to obtain the title, otherwise, the deal is off. Some auction houses also make use of white lights representing high-mileage cars or those with broken odometers. Keep a watchful eye on the sale light system and you will be an informed bidder.

Raise Your Hand

As any vehicle you want is placed for bid, you must ensure that the auctioneer acknowledges your bid. Move as close to the auctioneer or his ringmen as possible and raise your hand high as you shout your amount.

Just as you are aware of the auctioneer, take note of others who are bidding too. It is important that you remain as detached as possible. The bidding price moves quite fast, therefore keep in mind your limit for each vehicle and quit bidding the moment your price threshold has been passed.

You won’t win every vehicle you are interested in and that’s okay. By staying within your means, you will come away from the auction with a small fleet of cars you can condition, turn around and sell at a profit. Let the inexperienced bidders battle for the overpriced auctions.

After the Purchase

Once the auction is over you have some work to do before you take your winnings with you. First, you will sign invoices for each vehicle you have won. Second, any disputes you have with the seller will be settled under arbitration. Third, if you purchase a “blue light” vehicle, one without a title, the auction house will explain when the title must be delivered, otherwise, the sale is canceled.

The auction house may also provide a post-sale inspection team of mechanics to inspect each vehicle for a fee. This is an optional service.

Winning at Car Auction

Lastly, you need to arrange transportation for the vehicles you won. The car auction house may offer their own delivery service or you can hire an independent transporter or you may use your own equipment to expedite delivery.


See AlsoWhat is a Program Car?


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Matt Keegan
Author: Matthew Keegan
Matt Keegan is a journalist, media professional, and owner of this website. He has an extensive writing background and has covered the automotive sector continuously since 2004. When not driving and evaluating new vehicles, Matt enjoys spending his time outdoors.

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