I was searching a car in good condition to buy which could support my first car. One of my colleagues suggested me to go for the auctions where I could get new vehicles at cheaper price. I found some information in Internet, which could be helpful to anyone who is planning to buy a second car.
A Car dealer auction is a specialized form of auction. Millions of vehicles are sold at dealer auto auctions every year. These auctions are restricted for the general public and only licensed dealers can participate. Prices of vehicles sold at dealer auctions tend to be lower than those advertised on any dealer’s lot. Sellers forgo a potentially higher sticker price to take their inventory to a dealer auction where it will be auctioned off for thousands less than retail for a number of reasons.
Maintaining aging inventory costs dealers both money and reputation. However, old or otherwise unattractive inventory accounts for a minuscule portion of the cars sold at dealer auctions. Most vehicles sold are off-lease returns, replaced rental fleets, company cars, repossessed vehicles and trade-ins. Types of auctions are
- Off-lease: vehicles returned to the financial institution at the end of a lease term.
- Off rental: rental companies normally replace their fleets once a year, releasing a flood of late-model cars to the secondary market.
- Company/fleet cars: companies of varying sizes own or lease cars, trucks or vans that they typically keep for two or more years, although it is not uncommon to see current year models sold at the auctions.
- Repossessed: financial institutions for delinquency or another reason for recall can voluntarily or involuntarily repossess vehicles.
- Trade-in: dealer inventory that is aging or does not meet their profile (e.g., an old Toyota Avalon that was traded in for a new CLK350 Cabriolet at a Mercedes-Benz franchised dealership). Traded-in cars may have useful extras and sometimes even after market modifications.
There are special auctions for these types of vehicles (salvage, rebuilt or junk vehicles), sold mostly by insurance companies. Other types of auctions specialize in the sale of police or government cars; some of those actually allow public access.
