Car Auctions

For dealers, the car auction is a marketplace of opportunities and an integral part of running their business. A car auction is a meeting point and an industry nexus where socializing and large-scale transactions coincide.

There is a variety of different reasons why a car could end up at a car auction. One is the aging of a car dealership's inventory. Many dealers offer leases and other types of "rental" systems on cars. When returned, these "off-lease" cars will end up at a car auction because it is easier and more convenient for the dealership to use the car auction system instead of putting a price tag on the vehicle and letting it stay in their lot-especially if the vehicle is well used. Many times the clients of such dealers trade in their cars every few years for a new model, causing the back-catalogue of car models to end up in a car auction. A company car will also often be traded in by the company after a limited amount of years-a car auction is then the best place to get rid of (or purchase) these cars. Many buy them at a car auction to refurbish them and sell them at a higher price to customers. Sometimes a car will be repossessed by a financial institution or a car dealership. This will invariably increase the amount of cars ending up at a car auction because of their used state and vast quantity.

When at a car auction, several aspects of each vehicle are examined by potential buyers. The vehicle's condition and price are the two favored criteria. Many of the cars at a car auction won't even be inspected mechanically until after they are bought. In fact, it is a myth that cars are sold for pocket change and then resold to the customer for a vast profit. Many times the margin of profit is small for the dealer-the car auction is a way to invigorate the car trade and sale market.

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