By: Cat Tobin
The Common Misconception: Auto auctions are only open to car dealers.
The Surprising Truth: Anyone with the right resources can participate in the same auctions as the dealers!
Think about it. How much could you save if you bypassed the dealers and purchased directly from their sources? 30%, 50%, maybe even 75%.
As unbelievable as this sounds, it is possible with a little patience and research.
As you probably already know from past experience, car dealers will do ANYTHING to get you into the car of your dreams. Whether you can afford it or not!
I can recall a former coworker who got into a new luxury vehicle with a little "creative financing." The manager divided his mortgage payment in two. His justification: As a married man his wife was responsible for the other half of the mortgage....even though she was a stay at home mom! Luckily for them, they found a way to pay their huge car payment and avoid repossession.
Unfortunately, others aren't quite as lucky. Thousands of people default on their loans everyday simply because they couldn't really afford it in the first place.
This can work to your advantage. The banks and financial institutions that serviced the loans want to recoup their loss as quicly as possible. Add to that the exhorbitant cost of storing these vehicles, and you can easily see why the banks want to dispose of them in a timely manner.
After all, the longer financial institutions have to store these vehicles, the less money they're going to get back.
Auto auctions are the quickest way for banks to rid themselves of repossessed vehicles.
Car dealers know this, and they go to great lenghts to protect this knowledge from the general public. After all, auto auctions are a huge source of revenue. Dealers can purchase vehicles at a fraction of their value, and then resell them at a huge mark-up.
But what if you could avoid the dealer's mark-up and instead pay what they pay? What impact would that have on your wallet?
Amazingly enough, auto auctions are not solely restricted to car dealers. Up until a few years ago, I too shared this common misconception.
It was only by sheer luck that I stumbled upon a website that allowed me to search local auctions by zip code and vehicle make that I learned the surprising truth. I was paying dealers thosands of dollars in unnecessary mark-ups.
I tried the website's search feature out, and to my surprise the cars listed were exactly what I wanted. Only a few years old with very low miles. Many of them were still under the manufacturer's original warranty! This made sense of course, since most of them were repossessions.
The auction house was even willing to throw in a vehicle history report at no extra cost and a 3 month warranty.
Sure I wouldn't get the complimentary car washes and oil changes the dealer throws in, but that surely wasn't worth thousands of dollars in premiums.
After a little hesitation I joined the auto auction membership site. They helped me locate auto auctions in my area, and gain admission to them through their exclusive access rights. I learned what questions to ask, and how to handle the bidding process.
It was a lot simpler then I ever imagined it could be.
The day of the auction, I showed up a few hours early to inspect the vehicle I was interested in and get a feel for the place.
It must have been a slow day, because when my car came up for auction only a few dealers were bidding against me. Since I wasn't buying the vehicle for resale, I succeeded in outbidding the dealers!
It was a truely empowering experience. I got the vehicle of my dreams, and I only paid a little over half its book value!
What did this experience teach me? Auto Auctions can save you thousands in unnecessary dealer mark-ups.
Author Cat Tobin
