2012-06-07 10:25 am
For a used car dealer the car auction remains to be the best means of acquiring automobiles at a price where a decent profit can be made. The prices car sell at auction for are usually much less than the market value, which is what brings the dealers in but these low prices have also attracted members of the public who are looking for a vehicle at a bargain price. These consumers see the auctions as a way of getting the automobile they want without having to go through a dealer and pay any mark-up fees. This has made business difficult for dealers as they are seeing their profit margins diminish as more and more members of the public take part in the bidding process. Dealers have to rely on their vast knowledge of the car market to outsmart the competition and find profit making options at auctions.
I got an opportunity to witness this dealer intuition being put to use at a recent auction visit with my neighbour, Phil who owns and operates a forecourt that sells second-hand sedans and estates. At the auction Phil showed me many tricks of the trade in terms of buying a used car at auction. He showed me how to tell if a car has just had a bit of surface cleaning to get it sold at auction, leaving the new owner with hefty repair bills. By far the best tip of the night that I received was to be aware of manufacturers and their sister companies as they often offer the same Automobile models with different names. Phil was able to purchase an Opel estate that was deemed as a non-runner for £750. This estate was one we had looked at whilst making our notes and Phil liked it because it was listed as a ‘2004 Opel Estate’, there was no model designation and the fact that it was a non-runner practically sealed the deal as it never went through the auction hall which discouraged many prospective buyers. Phil also knew that the car would need little work to get it on the road again and he also knew he was guaranteed to make a nice profit as Vauxhall versions of the car are currently selling for ten times the auction price.