What's up with cars sold at auction houses?

[bradleyheathhay]

So what IS up with these vehicles? How do they get there? Are they rejects somehow from other lots?

I have a friend who can let me buy one through a local auction plus $100 so not a bad deal considering I'd be getting thousands off.

Are these vehicles worth looking into or should just I stay away altogether?

[chrishatcher]

Usually they were trade ins... sometimes you can get a really good deal on something that needs little to no work... lots buy them fix a few things and clean em up before marking them up a few grand and selling them

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[IDTag]

Depends on the auction too. Lots of rental cars end up at auctions when the companies upgrade. Trade-ins can be hit and miss. Some had too many problems for the dealer to screw around with or could be a decent car that sat on the lot too long.

Most of the public auctions around here aren't worth the time. People pay way too much for a car with unknown history that they can't drive before buying.

[Jaws]

There are several reasons. Yes, they can be trade ins that didn't fit in with a dealership's lot, so they send them to the auction if the profit margins are too low. They can also end up there as used rental cars as stated above.

Wholesalers come to the auctions to get cars for their dealerships, or sell cars as well.. There are some auctions that will allow people to test drive them and pay for a purchase inspection as if it were a dealership. So you can try your luck at it, but make sure you can drive it or check it out. If you can't, I wouldn't. Cars can hide their dark pasts really well in the right hands.

(I have worked in the luxury/exotic car industry for over 6 years, been to many auctions)

[spyderg0d]

Uhhh. Depends what your time is worth. Some guys spend a lot of time to make some money on these. But as a counter piont, junkyards make money off of them in potential scrap. Lol. Ya got to have experience and knowledge of what your bidding on otherwise it's just a financial disaster waiting to happen.

[Bear Grylls]

-Lease
-Rental
-Dealer Consignment

Familiarize yourself with Manheim Market Report so you will know the average a car is bringing at auction prior to purchase. Also remember you will have a buy fee as well that can have a wide range. I hate buying at ADESA for this reason, paying a damn $400 buy fee on a $10k car. Stupid

[JDStrickland]

So what IS up with these vehicles? How do they get there? Are they rejects somehow from other lots?

I have a friend who can let me buy one through a local auction plus $100 so not a bad deal considering I'd be getting thousands off.

Are these vehicles worth looking into or should just I stay away altogether?

Let's say you have an E36 M3 that you have decided to let go in favor of a new model. You go in and sit in the new M4 and fall hopelessly in love so you decide to drive it home that day. Kinda like when you were a kid and insisted on wearing your new sneakers out of the store... Anyway, the dealership only carries inventory on the Used Car lot that is less than 5 years old, or something like that. Whatever. Your old M3 is far more than the 5 years that they keep on the lot, so they haul it down to the auction and hope to get what they gave you for the car. (This is actually pretty easy because they give you a low ball trade in.) So, you drive in one day for a new framis valve to fix the sidget, and come home with an entirely new car. Your old car with the defective widget that is fixed with the framis valve goes to auction. They gave you $2500 on the trade in against a $40,000 car that they sell for $60,000. They can take $2,000 at auction and still come out ahead on the deal.

The Mom & Pop used car dealers hang out at the auction looking for cars that have high curb appeal, and sometimes they figure out that the widget needs a new framis valve, and sometimes they don't. The seller (in my state) is supposed to provide the smog certificate so that the title can transfer, but that's the only thing they have to do. All cars are sold AS IS without any kind of warranty. This means that fixing the widget with a new framis valve is something that's on you. If you are up to the challenge of putting in a framis valve, then the auction car can be a great deal.

[Bear Grylls]

Let's say you have an E36 M3 that you have decided to let go in favor of a new model. You go in and sit in the new M4 and fall hopelessly in love so you decide to drive it home that day. Kinda like when you were a kid and insisted on wearing your new sneakers out of the store... Anyway, the dealership only carries inventory on the Used Car lot that is less than 5 years old, or something like that. Whatever. Your old M3 is far more than the 5 years that they keep on the lot, so they haul it down to the auction and hope to get what they gave you for the car. (This is actually pretty easy because they give you a low ball trade in.) So, you drive in one day for a new framis valve to fix the sidget, and come home with an entirely new car. Your old car with the defective widget that is fixed with the framis valve goes to auction. They gave you $2500 on the trade in against a $40,000 car that they sell for $60,000. They can take $2,000 at auction and still come out ahead on the deal.

The Mom & Pop used car dealers hang out at the auction looking for cars that have high curb appeal, and sometimes they figure out that the widget needs a new framis valve, and sometimes they don't. The seller (in my state) is supposed to provide the smog certificate so that the title can transfer, but that's the only thing they have to do. All cars are sold AS IS without any kind of warranty. This means that fixing the widget with a new framis valve is something that's on you. If you are up to the challenge of putting in a framis valve, then the auction car can be a great deal.

Depending on year/miles of vehicle they will come with a base certification if being sold from manufacturer or like wise you can purchase a PSI as 'oh shit' insurance if something really is jacked after your purchase it.

Three major ways cars are sold at auction
-Ride and Drive (Green light)
-Limited Arbitration (Yellow light)
-As is (Red light)

[JDStrickland]

Cars are sold at auction AS IS. The auction house makes no warranty, express or implied. Can you get a service agreement from a third party? Sure. But that does not change the position of the auction house. Your purchase is, AS IS.

None of the other stuff matters. You can drive the car out, put it on a trailer, or haul it off on a flatbed. That is not something the auction house cares about.

My state, California, demands that any car that is registered for use on the highway pass a smog test. It requires the seller to provide that smog certificate so that the buyer is not saddled with huge repair bills for something that the state requires. I'm not certain how that chain is built when the auction house is involved, but I'm certain that the chain exists. The auction house is not in the business of fixing anything, so I assume that the dealer has to run the car through the smog test and provide the auction house with the certificate that the auction house then passes along to the buyer. The auction house never takes title to a car, it simply passes title. Your state may be different.

[Bear Grylls]

Cars are sold at auction AS IS. The auction house makes no warranty, express or implied. Can you get a service agreement from a third party? Sure. But that does not change the position of the auction house. Your purchase is, AS IS.

None of the other stuff matters. You can drive the car out, put it on a trailer, or haul it off on a flatbed. That is not something the auction house cares about.

My state, California, demands that any car that is registered for use on the highway pass a smog test. It requires the seller to provide that smog certificate so that the buyer is not saddled with huge repair bills for something that the state requires. I'm not certain how that chain is built when the auction house is involved, but I'm certain that the chain exists. The auction house is not in the business of fixing anything, so I assume that the dealer has to run the car through the smog test and provide the auction house with the certificate that the auction house then passes along to the buyer. The auction house never takes title to a car, it simply passes title. Your state may be different.

I buy cars at auction everyday....

I don't think you are getting what I am saying.

Auction's hold the title to the vehicle unless it is running under an exemption for the title for any reason given.

Edit- Manheim nor Adesa offer Smog Certs, up to buyer to confirm if cert is current and no additional registration fees apply