Annually there are numerous cars disposed of at car auctions. These auctions go by different names based on their backgrounds, i.e., salvage car auctions, police auto auctions, seized car auctions, damaged cars, car dealer auctions, etc. Mostly though, these auctions are only offered to automobile dealerships and the public can not attend. The current exception to this is the introduction of web-accessed auctions like Car Auction Inc where these vehicles are available to the public via the internet.
The selling price of cars sold at the auction is always less than what the dealer would advertise on its lot, because the specific seller’s need to clear their inventories quickly and hassle-free. There are several of groups these unwanted cars originate from: expired leases, old rental car fleets, aging company cars, repossessed and seized vehicles, and trade-ins.
Leases
Banks and financial institutions with vehicles with expiring leases use closed auctions (private, not open to the public) to sell off the cars. Off-lease vehicles are good specimens for auction participants as they are usually in good repair because of limited mileage, regular maintenance, and penalties for neglect and excessive wear. Also, the banks choose to liquidate them in a timely manner and thus, compromise by accepting lower selling prices..
Rentals
Car rental companies like to swap out their vehicles on a yearly basis to make room for the new ones. This creates a substantially large amount of late-model cars in the marketplace. They rely on auto auctions too for a quick sell-off. These cars are in demand by bidders because they are well maintained and usually less than a year old. Despite that, they frequently have high mileage and rough usage by the wide array of drivers and driving conditions.
Company cars
All sizes of companies often have fleets of cars, trucks, or vans for their employees that they choose to replace every two or more years. This is another example of the need for a car auction. Company vehicles driven by the upper tier are often luxury cars and are usually driven gently. Thus they tend to be in overall good condition. Conversely, trucks and vans usually get more use and abuse. All types get adequate maintenance so this is not an issue.
Repossessed
Finance companies facing unpaid car loans have to repossess, or seize the vehicle. When this happens an auction is their only choice for removing the car from their possession. Buyers can get excellent deals on repossessed cars because the banks only seek to offset their losses from the loan. The car’s condition is another issue here, as there is a higher chance of neglect and possible sabotage by the delinquent owner. Repairs and maintenance could have been ignored, too.
Trade-ins
When a dealership accepts a trade-in for a new car, they don’t often keep these older cars on the lot for resale. Retaining aging vehicles is unfavorable to dealerships because the costs are high and can adversely effect their reputation. If they have many cars of this nature on the lot not being sold, then poor salesmanship could be implied. So it is wise to move these trade-ins out of the inventory. At auction they can usually yield a bit more than what they offered on the trade-in. The condition of these vehicles is all over the place, as some have after-market additions, and some may be older and out of warranty.
Many in this category of cars will be of high quality and late models still under warranty. Federal law states that full disclosure of any major mechanical problem, which may void the warranties. Cars with a troubled history are classified as salvage, and are put up for auction mostly by the insurance companies that had underwritten them. So in addition to these car dealer auctions there are salvage car auctions, and police auto auctions that may include government cars as well.
Before car auctions on line were commonplace, most of the auctions were closed to the public and reserved only for auto dealerships. Now, with internet services like Car Auction Inc, that does not stand. With access to the World Wide Web, the general public can join the party and share in the great deals offered by car auctions that only an exclusive few formerly enjoyed.