Typically you can expect the average car to be about $1,000 to $2,000 dollars cheaper than retail if you were to buy directly from the dealer auctions.
However:
You will be surprised just how many cars sell for close to retail prices at these supposedly “Wholesale Auctions.” Why? Because we live in an era where high volume car sales are becoming the norm.
Want To Know Dealer Auction Prices Now?
What the dealers are paying for cars shouldn’t be a secret! Help improve negotiations on your next purchase and know what you deserve on your trade-in! Check out our new service on our Home Page.
Buying Cars At Dealer Auctions In 2020
It used to be that you could go to the dealer auction and expect to get a car at a significantly reduced price. The idea was: Get the car cheaper, clean/fix any issues, and sell retail to the public for a profit. Typically, a dealer could expect to markup a car around one or two thousand dollars (For the average car).
The problem today is that Car Buying Sites are exposing Used Car Prices so well that profit margins have slid, so far, in fact, that in some cases, a dealer might be buying the car at the dealer auction, then selling it to the public for almost the same price.
How Can They Do This?
Third-party products and add On products. Items Such as:
- Financing
- Warranty
- Insurance
- Interior/Exterior Protections
- Service Contracts
These extra products have become so lucrative, thanks to big commissions by third parties, that if a dealer can consistently sell some or all of these products to car buyers, they can afford to sell cars at wholesale prices.
Tell Us Below If You Have Seen Dealers Advertising That They Sell At “Wholesale”
How To Buy Cars At Auto Auctions
The truth is that you have to treat the auction just as you would treat the dealer- Don’t get emotional about a car.
The problem is that it’s actually easier to mess up at the auction because of the exciting environment all of the fast-paced buying and selling creates.
For some quick tips from someone who has been there many times before, try this at the Auto Auction:
- Research which cars will be in the auction ahead of time
- After you have found the car or cars you like, pull the Carfax Report
- Research Used Car Prices prior to arrival and pick a max for each
- If you can get access- Look up prior auction sales to see what other dealers are paying for the cars
- Arrive early to physically inspect the vehicles you have narrowed down and finalize the number you will spend based on your findings.
- While bidding, don’t go over your max!
Conclusion
Cars purchased at the Dealer Auctions are certainly cheaper (On Average) than cars purchased at the dealerships themselves. This is especially considering if you purchase those add-on products!
However, Dealer Auctions are no joke, and there is a reason that this is a business and not a game. Most dealers that buy these cars do recondition them to get them in proper shape for retail sale, an expense most people don’t consider.
Parts and labor are typically very cheap for the average dealer, whereas you might be paying full price to mechanics and detailers. In the end, is cheaper actually going to be cheaper, or even worth it?
