Ways to Make Money Through Automobile Auctions
Automobile auctions are one of the most risky, but potentially lucrative, ways to buy used cars. Local governments and police departments use auctions to sell off vehicles they recover through various legal processes including impounding and repossession. When the original owners don't claim or can't afford the vehicles, they become available to anyone who offers a high bid. But not all auction buyers are there to find new personal vehicles; many are out to resell and make money.
Other People Are Reading
-
Stocking a Dealership
-
Small and medium-sized used car dealers often use auctions as a regular source of inventory. By preparing for and attending auctions that most members of the car-buying public don't consider, dealers can buy vehicles at prices far below value. As a dealer you must be willing to put time and money into a vehicle you buy at auction to prepare it for resale, especially if it had hidden damage. But, buying cars with a strong resale market is one way to make money from an auction and keep your dealership in business.
Inspecting Cars for Other Buyers
-
You can make money at a car auction without offering a single bid, Instead, if you have mechanical expertise, you can offer your services as a car inspector for potential bidders. Most auctions publish minimal information about the vehicles that will be available and then give bidders a brief opportunity to view the vehicles up close before the auction commences. As an inspector you'll need to connect with buyers and help them evaluate specific vehicles, estimating the cost of repairs or the likelihood of mechanical problems so they can make informed bidding decisions. If you also work for or operate a repair shop you can offer inspection services or repairs as part of a package that helps buyers reduce the risk of buying at auction.
-
Restoring and Upgrading Vehicles
-
Another way to make money through an automobile auction is to identify and buy cars you can restore or upgrade and sell for profit. From a classic car repossessed from a collector to a late-model sports cars that can serve as the basis for a customization job, auctions offer some unique buying opportunities. If you already plan to add new bodywork or a new engine, existing damage on the vehicle you buy at auction might not matter to you and will only serve to keep the price low. When you sell the vehicle buyers will only care about the craftsmanship that went into the finished product rather than the source of the original vehicle.
Understanding the Process
-
Regardless of how you plan to make money from a vehicle auction, your odds improve dramatically if you understand the process and its potential risks. Because you won't be able to take a test drive or inspect the vehicle carefully before bidding, means there's the risk of hidden problems. Vehicles that are at an auction because of repossession may have been neglected. Auctions can become emotionally charged events, so set a limit for each vehicle before the bidding begins and be willing to walk away if the price goes too high. Auctions include buyers' premiums, which increase the price of a car beyond the amount of your winning bid. Learn what the mark up amount is before placing your bids.
-
References
- Photo Credit car dealership 3 image by Alexey Stiop from Fotolia.com
