I wanted to shift gears today and talk about used cars. I’ve worked at dealer auctions. I’ve talked about that process in the past. It’s a little different than buying a used car from a lot or from a private party. What I do that makes it a little different is that it is a true auction. I’m competing against other dealers trying to put cars on their lots.
So, I have to work backwards. I’ll give you the total maximum cost and in most cases it’s less than that cost. But in reality it’s a true auction and sometimes you lose in an auction. If someone really wants that car they may pay more for it. The ideal situation is if there is more than one at a certain auction that’s sufficient you’ll usually get your price if that’s the situation.
In most cases the wholesale Kelly Blue Book price is where you’ll end up buying a car at auction. There’s quite a bit of late model cars with low miles there. There is some older stuff there. You can find anything that rolls there pretty much. So what I do is streamline that process and look at only the things that I would certify.
When I buy a car at auction I take it over to Val, she gives it the once over . We check brakes, lights, everything. So, it’s a certified car when you buy it. That’s the same thing the dealer does and anything that needs to get taken care of we take care of. If you buy something with under 50,000 miles very little brakes, tires, that’s about it.
We can find whatever you want. If you want a green Volkswagen, I will find a green Volkswagen. We you get the car I’ve driven it Val’s had it in her shop. I will make sure everything is working and you’ll know that you’re going to buy a car that is solid. If you need to finance, credit unions are your best money for a used car sale bar none.
Last time you spoke you said that used cars were a premium. Do you think it has leveled out at all?
It’s in transition. The Japanese were out of business for a year. They were trying to shift purchases to other places after the tsunami. So now, we’re starting to see a lot of product on the market. There is actually quite a few of Hondas at auction which is rare.
The good ones are still a little bit on the premium side, but still you are seeing a lot of cars with a lot of miles and I tend to shy away from those. With Honda you are almost better off to buy new. The German cars especially, BMW, Mercedes, there is still a lot of product out there and you can get some great deals.
How or why does a car end up at an auction?
A number of reasons. One, it’s either a lease return and the banks have to sell them at auction or dealers that take them in on trade and want to turn cash. They need to make a payment and they’ll go to auction and they turn them quick and they’ll get paid. Rental car companies also clear them out. There are a number of sources. But, you have me to do the due diligence and the Carfax to make sure you get a quality product.
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