You’ve mastered the art of traditional auto auctions, but what about online vehicle auctions? Here’s how to navigate these digital car-buying opportunities.
There’s nothing quite like an auto auction, don’t you think? Once you’ve learned the in’s and out’s and get more confident in placing winning bids, navigating around the events can be fun. You know the red flags to look for, how to get in good with the auctioneers, and you’ve perfected your poker face over the years.
But have you tried online vehicle auctions yet? And if not, what are you waiting for?
The pros and cons of online vehicle auctions
Online auctions don’t have to replace traditional vehicle auctions—you can use them to complement your buying strategy. Here are a four ways online vehicle auctions can be helpful:
- You’re looking for a few very specific makes and models that you haven’t been able to find during in-person auto auctions.
- You get access to a larger inventory of available used vehicles.
- No traveling, involved—you can bid on vehicles right from your office.
- The game-playing is minimal. You don’t need a poker face because no one can see it.
Of course, along with the convenience of online auctions come a few cons as well:
- You can’t see the vehicles in person to get up close and personal and look for potential defects.
- Online vehicle auctions are open to dealers across the country as opposed to those located in one particular area. This can result in more competition for certain vehicles.
- If you aren’t buying cars at a local auction, you have to figure out the logistics of transporting your purchases to your dealership.
Online vehicle auctions may not be practical for all of your dealership purchasing needs, but it’s important to keep them in your back pocket when you’re looking for something very specific or don’t have a lot of time to devote to a live event.
Tips for online vehicle auctions
Just like with traditional auctions, online auto auctions come in different shapes and sizes. However, as you’re starting out and getting a feel for how these auctions run, sign in to one of the bigger online auction websites like Adesa.com or SmartAuction. These are large, reputable auction sites that you can trust. Once you get a feel for online auctions, you can start looking into other websites that may require a little more strategy or savvy.
Before you sign on to check out pre-auction inventory, it’s smart to have a list of the requirements you’re looking for in a vehicle. For example, a BHPH dealer may add search criteria like “vehicle is six to 10 years old” or “mileage is between 120,000 and 140,000,” while a traditional used car dealership may be looking for vehicles three years old or under, and an odometer under 60,000 miles. Consult your CRM and look for the makes and models that seem to move the quickest on your lot—then buy more of those.
Another major reason for writing a wish list ahead of time? It can be easier to make impulse purchases during online auto auctions—very similar to online shopping. The auction site has your credit card, so there’s no exchanging of physical money; sometimes it feels a little too easy to bid on multiple vehicles and worry about the financial repercussions later. Stay focused on finding the vehicles you logged in to buy and fight the urge to ignore your budget.
Once you’ve made your winning bids, you’ll move on to the next phase: figuring out how to get those vehicles onto your lot. Some auction sites may help you organize transportation, but there’s also a good chance you’re going to have to plan that out yourself. There are some services—like Central Dispatch, for example—that will give you access to car transporters and allow you to search average prices and negotiate with drivers. Just make sure to have a plan for transportation before you start bidding so you can get those cars to your dealership and start selling them as quickly as possible.
Who’s in charge of purchasing your inventory? Whether it’s you or someone else, be sure that individual is properly trained and knows how to navigate both traditional and online vehicle auctions. With an auction-savvy employee in charge of buying, you’re much more likely to see a stronger profit margin and meet the needs of every customer that walks into your showroom.