Increased Auto Auction Activity

by Don Elliott on April 10, 2012

I went to an auto auction today. For me, a trip to the auto auction provides insight into the economy, at least the local economy. When car dealers are shopping for inventory, it means that they have customers ready to buy cars. When new car dealers have trade-ins selling at an auto auction, it means that people are buying new cars and trading in their old cars.

For the past three years, used car dealers have struggled with a shortage of inventory and escalating used car prices. Uncertainty over the flexibility of their retail customers and their inability to find financing prevented them from stocking up on cars.

Today at the auto auction, I saw an excited bunch of car guys and gals. Over 500 buyers showed up for 600 cars and trucks offered for sale. The attendance was up 27% compared to the auction attendance at this location in 2011. There were also 20% more cars compared to the available selection last year. More importantly, the majority of the cars offered at today’s auto auction were new car trade-ins. As a guy who appreciates good car inventory, I was like a kid in a candy store.

Most auto auctions are for wholesale licensed car dealers only. At today’s auto auction, private individuals are permitted to buy bank repossessions and government vehicles. Of the 600 cars offered, 91 were eligible for private party bidders. There were about a dozen private buyers at the sale. For the most part, they had done their homework. Each had a list of the cars that fit their needs and their best bid price was noted on that list. Two of the buyers were listening to the auctioneer to understand his cadence before their cars came up to the block. This is a good idea for people who do not regularly attend auto auctions.

One of the buyers asked me if I knew anything about the cars being offered. Good move on her part. Asking questions at the auto auction can provide a wealth of information and this buyer asked the right ones. “Do you know anything about the seller? Where can I get a good deal on a windshield if I bought that car? Is there an auto locksmith on site at the auction who can provide a replacement key?”

Most importantly, these private buyers shared the enthusiasm of the wholesale buyers. They all needed cars and they were ready to buy. Active bidding promised a fair price and new homes for hundreds of cars, all wrapped up in just under four hours.

Some people live for a big sporting event or a sale at the shoe store. I love a good auto auction. I even bought a car today! I didn’t intend to buy a car and don’t need one, but thought I saw a good used car value. And now I have a car for sale! Just doing my part to improve the local economy, I guess.

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