Car Buyer Labs

Car Buying Advice, Tips, and Reviews

Used Car Shopping at Car Dealer Auctions

Ever wonder where your used car came from? No, I’m not talking about Craigslist or the used car dealership. I’m talking about before that, but after it rolled off the manufacturer’s assembly line. There’s this in-between, gray area that a used car lives in before it hits another lot. This form of purgatory is known as a used car dealer auction. Most used car dealers don’t get their inventories from trade-ins; instead, they get them from one of these junkyards. Some of these auctions are open to the public, while others are only for the eyes of used car dealership owners.

There are two types of used car dealer auctions, and a whole lot more to know.

Two Types of Used Car Dealer Auctions

There are a couple of different types of used car dealer auctions out there. The first one is like a flea market. You have all sorts of unwanted vehicles up for sale. They’re marked with prices and major issues that any vehicles might have, such as oil leaks, transmission problems, etc.

Alternatively, you could end up at a red light auction where there are no issues marked, and it’s more of a free for all situation. In other words, what you see is what you get. Think of it as buying a used car in “as is” condition from a dealership. You could be getting a Honda Civic that was pieced together with other car parts, or you could be getting a vehicle that would net a dealership a huge profit. You just never know. On top of that, you’re also allowed to test drive vehicles at red light auctions, which isn’t something you’re able to do at the flea market variety.

Even so, things move fast at either type of these auctions. Therefore, you might not be able to test drive something for that long. Dealers looking to make a purchase need to be quick on their feet, or else they might lose out to another prospective buyer.

At either one, you have a chance of scoring big or scoring little, no matter what you know about the vehicles’ histories.

How Do the Cars Get There?

Since a lot of used cars end up at auction, you’re probably wondering how they got there in the first place. Well, this is a place where any cars that were traded-in, leased, repossessed, or totaled end up. Therefore, there’s a very big hit or miss concept when it comes to these auctions. Does that mean they’re all unstable? No, a vehicle can be repossessed for any number of reasons, and still be in perfectly good condition. Additionally, trade-in or off-lease vehicles can still be in good condition as well.

There are also car auctions open to the public, but these vehicles don’t end up on dealership lots. Unless you end up directly buying the car from one of these public auctions yourself — or get a dealer license to see a dealer only auction — you’ll be stuck buying from your used car dealer.