Make the right deals and auto auction sales could be your ride to success
There are a lot of variables in the world of auto dealerships – especially if your business runs on used cars. Vehicle quality is always a concern, as is the credit history of your customers, and even the weather. But no matter how skilled your sales team is, they can’t do much without the right cars.
Even with trade-ins, you still need to fill your lot with the cars people want to buy. Where do you get them? Rather than wait for the “right” trade-in to hit the lot, you go to the auto auction sales.
Like anything, auto auction sales have their tips and tricks. A few poor bids and you can lose money quickly. Move too slowly, and you’re left empty-handed.
Auto auction sales aren’t for the weak at heart. There’s a lot on the line, and it takes an ability to decide quickly whether to keep bidding or walk away. But there’s more to it than just making a quick decision.
7 Tips to help you master auto auction sales
1. Go early
If you can, go to the auctions early. Walk around, look at the cars, and talk to people. In fact, talking to people is crucial. The more friends you have, the better chance you have of getting what you want. Even if that doesn’t happen at one auction, they could tip you off to a good car next time – or steer you away from a clunker.
2. Go with someone
Used car auctions are overwhelming. Don’t go by yourself expecting to walk away with a few good deals. You have to learn the ropes, and there’s no better way to do that than to go with an experienced buyer.
3. Know your vehicles
The more general knowledge you have about vehicles, the better off you are in deciding what to bid on. For instance, a Honda Civic with 130,000 miles on it still has a long life ahead of it in most cases. A Saturn Ion with the same mileage? You might have a hard time selling that one.
4. Know what you can and can’t fix
Minor dents and dings, a burned out headlight, or a broken mirror are easy, relatively inexpensive repairs. A leaking head gasket or bad clutch, on the other hand, is a major repair. Unless you feel confident in your ability to turn a profit on a car with major mechanical flaws, it’s best to walk away.
5. Know what you can sell
There’s an easy way to do this; track your data with a CRM. What cars move? Which ones sit on your lot? Is there a common feature? Maybe it’s heated seats in cooler climates, or maybe your customer base is active and prefers hatchback models. The surest way to a profit is to stock the cars your buyers want.
6. Don’t get caught up in the excitement
One of the reasons auctions are so good for sellers is that the excitement of the competition encourages buyers to bid to win. The problem is that once you add in transportation expenses, any repairs, and other associated expenses with getting the car to your lot and ready to sell, your profit margin is fairly slim.
7. Know the rules
Each auction is different. It’s your job to know the rules. This applies to both buying and selling at an auction.
Selling your inventory at auto auction sales
No matter how good your sales team is, there are always cars that you just can’t sell. You lower the price, you add an extended warranty, but “that” car just won’t leave your lot.
You can still turn a profit by selling it at an auction. There are local auctions or big online auctions. Some auction houses, like Manheim, will even handle the post-sale details for you.
Similar to selling a car on your lot, there is a lot you can do to improve your profits.
Clean the vehicle inside and out. Make it sparkle. A clean looking car gives an impression that the car has been taken care of.
Inspect the vehicle. Make sure the lights all work, the tires are in good shape, and the brakes are in good condition. If they aren’t, consider whether it is worth the potential profit you may get by fixing those problems.
Have a clean title. For obvious reasons, a car without a title ( or a title with a lien) will be much harder to sell.
Be upfront about any known problems. Remember, you’re not just selling a car, you’re building a relationship with your industry peers.
Don’t forget to use a CRM like Autoraptor to keep tabs on all those cars that are moving around on your lot. It will make your life – and your trips to auto auction sales – so much easier.
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