Would you recommend buying from Auctions? [Archive]

Pete_Coach

Nov 5th, 2009, 09:22 AM

I have purchased from auctions and agree with S203. Unless you know automobiles, can very quickly spot issues, have the ability to repair the car at reasonable cost, you will really be taking a chance.
It may be cheaper but you have no recourse after you buy it. No warranty, no guarantee no money back, no one to complain to.
At these auctions, there is a flurry of activity as each car rolls up and extremely quickly, the bidding stops. Almost all the guys there know exactly what it is worth and how much it will cost to get it roadworthy and sellable. When they stop bidding, you can keep on, but be aware, it will cost you more to drive the car.

look30

Nov 5th, 2009, 09:22 AM

Unless it's something like a project car where you expect to be working on it, I wouldn't buy something from an auction.

You're better off trying to find something from a dealer or buy privately. Good luck.

That is THE worst advice ever!!!!

Dealers are ALL thieves and scam artists, NO Exception.

Try your mechanic or a small dealer and they usually charge $500-$800 +auction costs depending on how long it takes , and how many times you have to go there to see cars.

Get the VIN number of the car you like and do a car proof, this way you will sleep better at night.

Use the money you save to fix and pamper the car you just bought and this way you will have a MUCH better car in the end. First thing after you buy the car do a fluids change ( oil , powersteering and coolant) and pay a mechanic to do an inspection , brake if needed and transmission and timing belt.

If you end up spending some money after you buy it at least they go toward your property not in the pocket of some sleazebag.

Keep in mind that even they tout the affiliation to UCDA is more like having one of those free university diplomas... it doesn't mean anything at all. UCDA will do NOTHING if you get shafted ... UCDA will just ask the dealer nicely to make it right if he wants to .

Silicium01

Nov 5th, 2009, 09:23 AM

Thanks for advice guys,

I've heard that at those dealer auctions they mark cars conditions by Green, Yellow and Red - where green means car has no problems. I think I should be safe to buy one that has Green tag at those actions. I'll test drive the same model at official dealership so I know how the car feels.

If you guys know a dealer I could trust, I'd appreciate the lead and thank you with beers once I by the car :)

S203

Nov 5th, 2009, 09:46 AM

ORLY? Worst advice ever?

- Dealers give warranty while most auctions (if any) don't.
- Auctions sell cars as is, therefore there is no mark-up.
- Obviously dealers charge more but you are paying for the inspection, safety test, e-test, etc.
- Carproof only tells you what the owner actually reported (so they can still have an accident that they didn't tell you about)
- What if the OP is not mechanically inclined and just wants a vehicle to drive on the road? What if the OP doesn't have the time to fix the car?

Think before you post, K THNX.

jed

Nov 5th, 2009, 09:57 AM

Anonymouse

Nov 5th, 2009, 10:00 AM

- Dealers give warranty while most auctions (if any) don't.

This is not true in the case of one large auction house (Mannheim). If the selling dealer claims that the car is accident free, is in "excellent" condition, etc., and the vehicle is not in that condition when it arrives, the selling dealer has to take the car back. If he does this too much, he will lose his abillity to participate in the auction, which is a death sentence for his business. Also, the used car world in Toronto is surprisingly small and he'll find that nobody wants his cars anymore.

The technique I have used is to approach dealers who stock the same type of car I'm interested in. I ask them if they're willing to look for the car I'm interested in, and I'll pay auction price plus a preagreed profit if they come up with one that passes my third party prepurchase inspection. If the vehicle fails my inspection, they can put it on their lot because it's the kind of unit they stock anyway.

Pete_Coach

Nov 5th, 2009, 10:12 AM

That is THE worst advice ever!!!!

Dealers are ALL thieves and scam artists, NO Exception.

Try your mechanic or a small dealer and they usually charge $500-$800 +auction costs depending on how long it takes , and how many times you have to go there to see cars.

Get the VIN number of the car you like and do a car proof, this way you will sleep better at night.

Use the money you save to fix and pamper the car you just bought and this way you will have a MUCH better car in the end. First thing after you buy the car do a fluids change ( oil , powersteering and coolant) and pay a mechanic to do an inspection , brake if needed and transmission and timing belt.

If you end up spending some money after you buy it at least they go toward your property not in the pocket of some sleazebag.

Keep in mind that even they tout the affiliation to UCDA is more like having one of those free university diplomas... it doesn't mean anything at all. UCDA will do NOTHING if you get shafted ... UCDA will just ask the dealer nicely to make it right if he wants to .
Actually, I think this is the worst advice, perhaps not ever but for sure bad.
You are saying to stay away from dealers yet you say to go to a mechanic or small dealer. In my experience, the "small" used car dealers are the ones that are to most unscrupulous.
You say to take this guy and for 500 to 800 dollars + auction costs they will get you a car. Well, again, in my experience, 500 to 800 is way more profit than most used car dealers or even large dealers with used car lots expect. They more often than not work on around 350, with 100 going to the sales person. This is not always the case and for sure they try to get as much as they can bit in reality, used car sales are not the cash cow for dealerships.
Carproof is not instantaneous and at an auction you will never have the opportunity to get one and more often than not, there are no refunds at auctions. All cars are sold as is where is.
If you buy from a dealer or someone else, you will not have to do the repairs you speak of and you get a warrant or guarantee. It will be safetied and e-tested.
Doing this your way, there is no money saved, just commission given to a guy who walked you in the door. I change my mind, yours is the worst advice ever :cheesygri

Anonymouse

Nov 5th, 2009, 10:26 AM

Carproof is not instantaneous and at an auction you will never have the opportunity to get one and more often than not, there are no refunds at auctions. All cars are sold as is where is.

This isn't so. The VINs are prepublished for at least a few days and you are free to run CarProofs on them. Most dealers have a volume discount with CarProof so it doesn't cost them a lot to run these checks.

Also, see my post above; if the car isn't as described it goes back to the selling dealer.

look30

Nov 5th, 2009, 10:42 AM

It looks like I pissed off a lot of dealers with my comments.
The dealer markup is at least 1500 for a clunker and around 2500 or more for a nice car.

What dealer(s) do is usually prep it for sale with little money possible not making sure the car is in top shape condition.
Big dealers are usually very expensive because of the overhead and they might be better because of some reputation defend but unfortunately that is the exception not the rule...

I got shafted by a dealer in Kitchener which is by no means a small operation with few hundred cars in his lot.
The warranty usually goes toward "drive train" and is pretty much useless in a newer car anyways plus has a high deductible. After you do the math for fixing a transmission is about 3k , the warranty you have to pay at the dealers runs to anything between 1300 to 800 depending how desperate the dealer is to sell it and has a 1000-1500 deductible so you don't save much even in the worst case scenario.

If you play your card right you can save 2-3k in an auction so after putting another 300-500 in making sure the car will perform you have a better car and save some money.

If you think this is a bad advice ... take your chance with a dealer and see if I care...

P.S. If you want to be even a more astute buyer ... buy private. Pay a mechanic to come with you or take the car to him and get a great deal.
In my case a almost identical car at dealership was 11.5-14k depending on the bells and whistles and I managed to get it private for 8k. Cost me another 500 to get it how I wanted and I'm a happy puppy.
If I was to buy it from the dealer ..... who know what I would get but for sure I could not afford this car.

look30

Nov 5th, 2009, 10:48 AM

If you buy from a dealer or someone else, you will not have to do the repairs you speak of and you get a warrant or guarantee. It will be safetied and e-tested.
Doing this your way, there is no money saved, just commission given to a guy who walked you in the door. I change my mind, yours is the worst advice ever :cheesygri

Dealer will NOT make big repairs, they use a "friendly mechanic" to get a shady safety cert and emission is only $30... I see your point , why won't I pay somebody >2.5k for this great service :)

BTW, My last dealer bought car had worn out brakes and missing license plate light assembly but somehow passed the safety :) go figure..... Went back to the dealer and he said is not his problem but he will make it right, after 1 month of calling back and forth I fixed it myself and he paid me for the part missing part only not the labour or the brakes.

My previous car I bought from dealer also safetied and so on , had the brake lines painted black so I can't see they where rotten and bursted after 7 months.... another great dealer story for you

AGR-1

Nov 5th, 2009, 10:52 AM

The majority of "lease returns" that are sold at auctions have balance of factory warranty, and a Carproof, in addition with the new law coming into effect Jan 1, 2010 there is more information that is disseminated.

It usually takes 60 seconds to sell a vehicle on the block, you might see it as being worth X, the fellow next to you as X+, and the fellow across the country online as X++ its best to have a few alternatives than just 1 or 2 vehicles.

If its an older vehicle then it could become a slightly more complex situation.

Its in any dealers best interest to move vehicles very quickly in a 30 to 45 days times frame, since pricing changes very quickly at auctions. A short profit, quick sale is the MO these days, a big profit, slow sale can lead to a quick loss. Especially if the same vehicle is selling for less money at the auction a few weeks later.

How much money are you going to save? Especially that after you bought the car and thought that you saw every deficiency, you will usually discover a few more. Since the car you bought was the 5th down the list and you looked at the first 3 closer than the last 2.

The car that really interested you, suddenly has 15 guys looking at it as it makes its way to the block, funny how "hot cars" interest everyone!

If the other dealers see that your dealer has you along as a retail buyer, they might just give you a run for your money on the car you really want, and you will step up by 500 or 1,000 to own it...now how much did you save?

Or the auctioneer sees you coming and drags out the auction by 15 seconds to have some fun, and you have to pay more. Auctioneers love it when they have 2 bidders...just love it.

Pete_Coach

Nov 5th, 2009, 11:04 AM

It looks like I pissed off a lot of dealers with my comments.
The dealer markup is at least 1500 for a clunker and around 2500 or more for a nice car.

blah blah blah...

I got shafted by a dealer in Kitchener
blah blah blah

If you think this is a bad advice ... take your chance with a dealer and see if I care......

.
No, I don't think you P'd anyone off, they just called you out on extreme comments. I am not a dealer, nor ever have been but, I do know the business. 1500 to 2500 profit on a used car? What planet do you live on or dream in? :lol:
So, the thrust of it all You got shafted...twice...? Perhaps you did not heed your own advice?

Dealer will NOT make big repairs, they use a "friendly mechanic" to get a shady safety cert and emission is only $30... I see your point , why won't I pay somebody >2.5k for this great service :)

BTW, My last dealer bought car had worn out brakes and missing license plate light assembly but somehow passed the safety :) go figure..... Went back to the dealer and he said is not his problem but he will make it right, after 1 month of calling back and forth I fixed it myself and he paid me for the part missing part only not the labour.

My previous car I bought from dealer also safetied and so on , had the brake lines painted black so I can't see they where rotten and bursted after 7 months.... another great dealer story for you
You are right, he will not make big repairs. He knows the market and will not invest to lose money. He takes that car to the auction and sells it to you.
Nothing shady on the safety certificate from a dealer. Their livelihood and the mechanics license and dealership ride on these being done properly. Did you take it back to have any of your issues fixed?
How long do you think is reasonable for someone to warrant a used car? Especially an old used car? Stuff happens dude, and who can say how you (or the customer) drive or abuse a vehicle? 7 months is a long time, especially if over a Winter.
Relax, take your own advice on car buying next time, then you will never have to worry about anything cause you will be getting the perfect, lowest price best condition car out there :D

look30

Nov 5th, 2009, 11:12 AM

. He knows the market and will not invest to lose money. He takes that car to the auction and sells it to you.
Nothing shady on the safety certificate from a dealer. :D

You are right , they are all highly trained professionals with your well being in mind when selling the cars... Mother Theresa kind of people in every dealership, hard working and honest... more or less like the other group of great people helpers The Realtors...

UCDA

Nov 5th, 2009, 11:46 AM

You make some fairly broad statements, but do know what you are talking about?

_________________________

That is THE worst advice ever!!!!

Dealers are ALL thieves and scam artists, NO Exception.

Try your mechanic or a small dealer and they usually charge $500-$800 +auction costs depending on how long it takes , and how many times you have to go there to see cars.

Get the VIN number of the car you like and do a car proof, this way you will sleep better at night.

Use the money you save to fix and pamper the car you just bought and this way you will have a MUCH better car in the end. First thing after you buy the car do a fluids change ( oil , powersteering and coolant) and pay a mechanic to do an inspection , brake if needed and transmission and timing belt.

If you end up spending some money after you buy it at least they go toward your property not in the pocket of some sleazebag.

Keep in mind that even they tout the affiliation to UCDA is more like having one of those free university diplomas... it doesn't mean anything at all. UCDA will do NOTHING if you get shafted ... UCDA will just ask the dealer nicely to make it right if he wants to .

Silicium01

Nov 5th, 2009, 11:48 AM

This is an interesting debate, thank you all for contributing and sharing ideas.

My plan is to buy a 2006 - 2007 Honda Accord with less than 100 000 kms on it. I just want the basic 4 cylinder manual trans. I think I should be safe to buy on an auction, after all car is pretty much new, isnt it? Also keeping in mind honda reliability. I will try to find a private deal but it seem they are a bit overpriced on autotrader.ca. I'll speak with a dealer to find ot how much approximately such a car costs on auctions, and if it's significantly less than what I pay at private sale I'll go for auction. I'm paying the dealer for helping so we both win.

Where do you guys look for private sales?

P.S. does anyone know if ratings at auctions are accurate? I have heard they have them marked with 3 colors, green yellow and red, green being excellent, yellow acceptable, red with problems. Any word on this?

fooit

Nov 5th, 2009, 11:58 AM

1. Nothing beats a private sale, that's where I would look first, it takes time but you get the best deal and save lots of money.

2. Auctions I would only do with a guy I know personally, and we agreed on the exact pricing terms and full disclosure, meaning that you get to see the auction invoice and have your say in all other expenses (like tires, brakes, etc) to get the car certified and e-tested. I wouldn't go to auction with a used car dealer that offers me this service for a flat fee of $1000 and I am getting the car AS-IS from auction.

And from a short personal experience it's not that easy process, you got to drive to Milton or to Brampton, the weather can be very really crappy now, the car might not be where it should be, etc... And yes, auction reports are very detailed, I would trust them more then UCDA, CarFax or CarProof reports.
And you don't get to drive the car.

3. From my very naive understanding of used car business if a dealer doesn't make a net profit of $2000 on a car it's waste his time, and he can close his business, send all his employees home and go for unemployment. Depends on the market and vehicle condition, but generally speaking for 3-4 years old lease returns small used car dealers add 3-4k on top of the auction price (that includes all the admin fees they lump on you), so in the end they will end up with average 2k net profit after paying all the expenses to make the car certified and e-tested (tires, brakes, belts, etc). Big dealers like new car dealerships get their cars from the same auctions but jack up the prices 5-6k on top of the auction price.

So bottom line, this is very personal - if you have time and a friend dealer that is willing to work with you, sure, do your homework on prices and if you are lucky you can save several grand getting the car from auction. Otherwise, go the traditional way either private sale or used car lot where you can test drive, have the car inspected, etc...

Pete_Coach

Nov 5th, 2009, 12:44 PM

You are right , they are all highly trained professionals with your well being in mind when selling the cars... Mother Theresa kind of people in every dealership, hard working and honest... more or less like the other group of great people helpers The Realtors...

Being facetious does not help your stance. Become a slight bit more knowledgeable of business and perhaps you will come to understand that not everyone is a villain. Being naive does make you more susceptible to being scammed for sure but being a smart a$$ makes you a target. ;)

Silicium01, look at it this way, if a dealer takes a car in trade and he got a smoking deal why would he send it to an auction to sell if he could turn it around real fast? Know where auction cars come from. Rental agencies, insurance companies, dealer castoffs, repos, lease returns etc. If I was you, I would try to find a private sale first.

Fooit, as to a $2000 profit on cars. That is not true and has never been the case. You can even verify the prices of cars nowadays with things like APA and CCC reports. They give you the prices, you can figure out what profit is fairly accurately.
The costs of lease returns is easy as well, the residual was determined at the time of leasing. Auctions are a tricky business. Auctioneers actually like to see folks that are not in the automotive business, they will generally drive the price up on the car and the higher the price, the more the auctioneer makes.

fooit

Nov 5th, 2009, 01:49 PM

Fooit, as to a $2000 profit on cars. That is not true and has never been the case. You can even verify the prices of cars nowadays with things like APA and CCC reports. They give you the prices, you can figure out what profit is fairly accurately.
The costs of lease returns is easy as well, the residual was determined at the time of leasing. Auctions are a tricky business. Auctioneers actually like to see folks that are not in the automotive business, they will generally drive the price up on the car and the higher the price, the more the auctioneer makes.

Pete,

What are you saying? $2000 is too little or too much? What's the case then?

Now, APA and CCC give you info on new cars, AFAIK, neither offers used car info. For this info You go to Black Book, Red Book, etc.
Black Book, Red Book are both based on wholesale value - meaning how much these specific cars sold for on used car auctions lately in your area.

As for lease returns - the buy back value in your lease agreement has absolutely nothing to do with used car auctions. Market dictates the prices, that's why you have open and close end leases. But in the end of the day when Chrysler Financial takes their returned leases to auction they will only get what used car dealers are willing to pay for these cars and nothing more, no buyback value no black book. And used car dealers are only willing to pay for a car they can sell fast and make their profit. Just for the sake of experiment go to lease busters and check buy back value for any car, then check its current market price.

romsan04

Nov 5th, 2009, 02:07 PM

both of my cars are from auction
my friend got it for me.
90% of the small dealers getting their cars from the auctions and usual markup on 5-6K car is around $1000-$1500
the more expensive car is the more markup you can make, only one problem to sell something which cost $20,000 is harder then $6,000 and takes more time

look30

Nov 5th, 2009, 04:45 PM

Being facetious does not help your stance. Become a slight bit more knowledgeable of business and perhaps you will come to understand that not everyone is a villain. Being naive does make you more susceptible to being scammed for sure but being a smart a$$ makes you a target. ;)

.

So you say that if you are not an expert in Mechanics then you're a fair mark for the dealers to scam you ... ? Makes sens that you're defending your buddy's and presenting them as angels because based on your real or pretend knowledge of the business looks like you're an insider or close enough.

IMHO the dealers are NOT adding any value to the transaction and they charge all kind of fees and making all kind of pretexts to make the sale no matter what.

I gave you my personal experiences dealing with this scum and I don't know what kind of people will paint the rusted break lines in black or pretend that they did the required repairs only to find out later that the only thing done was applying some grease to get rid of the noises, and all of this while showing to me fake invoices for the parts faking the Safety cert and so on.

l69norm

Nov 5th, 2009, 05:15 PM

.. does anyone know if ratings at auctions are accurate? I have heard they have them marked with 3 colors, green yellow and red, green being excellent, yellow acceptable, red with problems. Any word on this?

Here are the Manhiem descriptions:
http://www2.manheim.com/pdfs/auctions/national_arbitration_policy_Canadian.pdf

1. A standardized light system is used to describe the condition and/or announcements related to the vehicle being sold. The light system is defined as:

a. Green Light – “Ride & Drive”: The green light signals that this vehicle is guaranteed under the conditions outlined in the Noon Next Day, Seven Day and As-Is Arbitration section, except for specific announcements made prior to the sale.

b. Yellow Light – “Announcements”: This light is an indication to the Buyer that the Auctioneer or Selling Representative has made announcements that qualify the condition and limit arbitration of this vehicle.

c. Red Light – “As-Is”: Vehicles selling under the red light will only qualify for arbitration under the rules outlined in the Noon Next Day, Seven Day and As-Is Arbitration section.

Manheim has an "aribritation" system that covers most common "undisclosed" problems based on the light color. For instance, if the air bag warning light is stuck on or the transmission is blown, etc, you have till noon the next day to return the vehicle back to the auction.

Here's a video of Manheim Detriot:
http://www.autolinedetroit.tv/show/1312/3?play

It should be noted that people here are talking about 2 different kinds of auctions here. Auctions of lease return vehicles from companies like GMAC, etc, many of which are still under warranty vs. used cars that were traded in from another dealer