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How Much Do Cars Sell for at Auctions?

Posted by David Newton at

Find out how much cars sell for at used car auctions on FenderSplendor's blog.

There’s plenty of money to make buying cars at the auction if you know what you are doing. Don’t expect to make a huge profit the first few times; just take it as a learning experience. In no time, you’ll be buying and selling like a pro.

Purchasing a vehicle at an auto auction can save a lot of money and leave room to make a profit. With that said, many people question how cheap the cars are at dealer auctions. If you’ve been wondering if this avenue is right for you, let’s take a closer look at the best ways to make money on auction cars.

How Much Cheaper are Cars at Dealer Auctions?

It depends on the type of auction you attend. If you purchase a car at an informal auction, you will find many vehicles with starting prices as low as $300. Typically, nothing sells for much more than $3,500. These cars are sold by individual owners instead of manufacturers. They tend to be more than five years old and have been purchased to resell.

Many of these cars are repaired or repainted. As an experienced dealer, it’s easy to find a deal at these auctions, if you know what you are looking for. If you aren’t careful, you can end up paying too much for a car that’s not worth the money.

If you attend a formal auction, the cars move fast and prices start higher. You won’t find much selling for less than $3,000 here and the cars are entered by manufacturers, lease hire companies and dealers. Most professional dealers will choose this avenue to purchase vehicles because of their quality.

What to Look for When Buying a Car at Auction

We’ve got five tips for buying a used car at auction. Following these principles will help you score the best deal at private car auctions.

Tip #1 – Inspect the vehicle

Most of the time, you are purchasing the car based on a physical inspection only. Make sure you carefully investigate every part of the car before bidding. Watch for some significant signs of repair such as paint overspray, scored brake discs or an uneven stance. Make sure you also use all of your senses to determine if the car was involved in a flood.

If you aren’t sure what you are looking at, take a qualified mechanic with you. There’s nothing worse than paying for a car that’s a junker. Don’t forget to bring your FenderSplendor Paint Meter with you to quickly assess the car’s paint. You will have a tool with you that gives you the upper hand over other dealers.

Tip #2 – Run the VIN

Write down the VIN found on the dashboard before you bid on the car. Then, compare that number to the trunk lid and door stickers. If these numbers don’t match, parts have been swapped during a major rebuild. It’s wise to move on.

You can also use your mobile device to run the VIN through a title check. This will help you determine what you’re dealing with before you get in too deep.

Tip #3 – Research the car value

Utilize online resources to get a general estimate on what the car is worth. You’ll want to use prominent sites such as Edmunds and KBB, but don’t be afraid to check Craigslist as well to value the car locally.

Tip #4 – Watch the other bidders

Before you start bidding, it helps to observe some auctions first. If you pay attention, you’ll notice some people take an unusual interest in a few cars up for sale. This might mean they are simply trying to bump up the prices on these cars. After a few visits, you’ll get to understand what’s happening in the background and you’ll be better prepared to invest.

Tip #5 – Don’t get carried away

Once bidding begins at the auto auction, it’s easy to find yourself caught up in the moment. Don’t get so immersed in beating someone else that you end up paying more for a car than it’s worth. If you want to make a profit flipping cars, then you have to know when to stop bidding.

How to Bid at a Car Auction

If you aren’t accustomed to bidding at the auto auction, it’s simple to get started. Make sure you sign up for the auction and register yourself to bid. Then, browse through the vehicles as early as possible. Some auctions post the list of vehicles online.

Once you’ve gone through the list, make a note of the ones you are interested in. Do your research on the pricing and write down your bottom line. Pay attention to the auction as it is happening. You don’t want to accidentally bid too much because you aren’t familiar with what’s going on. Once the auction reaches higher than you were willing to go, bow out. Don’t overspend just to win.

Making Money from Car Auctions

Don’t be afraid to take some risks at the auto auction. This is the best way to turn a profit. In fact, some of the best cars to flip aren’t the ones you would consider at first. Make sure you look at every dirty vehicle because it will be the one most dealers are going to avoid. The cars with dirt and grime on them tend to sell for less even if there is nothing wrong with it.

As long as you perform your due diligence with a car and find no fault, you shouldn’t worry too much about having to clean the exterior and/or interior of a car. After all, doing a little detail work to resell a car is better than major mechanical repairs.

Do I Need a Dealer’s License to Flip Cars?

This is a common question that gets asked at all of the best auto auctions. In most states, there is a limit to how many cars you can buy and sell in a year. Typically, the maximum is three cars a year, but you want to check your local restrictions.

Some people work around this restriction by having family put the car in their name, but this isn’t the professional way to make a living selling cars. It doesn’t cost much to start an LLC, get a dealer’s license and do things legitimately. In fact, this also gives you access to a dealer plate and insurance to cover yourself in case of theft or an accident.

Car Buying at Auto Auctions

There’s plenty of money to make buying cars at the auction if you know what you are doing. Don’t expect to make a huge profit the first few times; just take it as a learning experience. In no time, you’ll be buying and selling like a pro.

 


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