When it comes to stocking your dealership with high-quality, profitable vehicles, auctions can be a goldmine—if you know how to navigate them. Whether you’re attending in-person or bidding online, finding top-tier high-quality used vehicles is essential to satisfy customers and maximize profits. This guide provides a step-by-step approach to identifying the best high-quality used vehicles at auctions.
Step 1: Determine Your Budget and Buying Criteria
Key Actions:
- Set a budget for each vehicle you plan to acquire.
- Define your buying criteria based on your target market and popular vehicle types in your area. Consider factors like vehicle age, mileage, condition, make, and model.
Pro Tip: Using a tool like Carketa’s Auto Finder can help you set realistic pricing and profit expectations before you bid.
Step 2: Choose the Right Auction Platform
Key Actions:
- Research and select an auction platform that aligns with your dealership’s needs. This might be a local in-person auction, a large national auction, or a specialized online platform.
- Evaluate whether the platform provides information on vehicle condition, history, and pricing trends.
Platforms to Consider:
- Manheim and ADESA: Known for a wide range of inventory and detailed vehicle reports.
- Copart and IAAI: Often offer vehicles at lower prices but may include salvage or repairable options.
Step 3: Review Vehicle History Reports
Key Actions:
- Before you bid, obtain the vehicle’s history report from services like Carfax or AutoCheck.
- Look for red flags like accidents, title issues, or high-maintenance incidents that could impact resale value or customer satisfaction.
Pro Tip: A detailed history report can save you from purchasing a vehicle with hidden issues that may require costly repairs or reconditioning.
Step 4: Use Market and Pricing Insights
Key Actions:
- Analyze local and national market demand for each vehicle model you consider. Carketa’s Dealer Analytics (formerly Market Report) provides in-depth competitive analytics to help gauge each vehicle’s potential profitability.
- Factor in reconditioning costs by reviewing vehicle condition. Carketa’s appraisal tool can help you anticipate the expenses associated with getting the vehicle frontline-ready.
Pro Tip: Pay attention to seasonal trends. For example, 4×4 vehicles may be more in demand in winter months, while compact cars or SUVs might be more popular during summer travel season.
Step 5: Inspect the Vehicle in Person (If Possible)
Key Actions:
- For in-person auctions, arrive early to inspect vehicles. Check for signs of wear, rust, or interior damage.
- Assess the engine, transmission, and bodywork condition. Bring a trusted mechanic if you’re unsure about inspecting vehicle mechanics.
Pro Tip: Look for auction platforms that allow you to review vehicles a day or two before the event. Use this time to assess and shortlist vehicles based on your criteria.
Step 6: Set Your Bidding Limit
Key Actions:
- Decide on your maximum bid before the auction starts and stick to it. Calculate this by factoring in reconditioning costs, your target profit margin, and local market pricing.
Pro Tip: Some dealers use Carketa’s Profit Predictor to run estimated margins, setting realistic bidding thresholds to ensure profitability.
Step 7: Strategize Your Bidding Approach
Key Actions:
- Develop a bidding strategy that allows you to bid confidently without exceeding your budget. This could mean placing a higher initial bid to deter competition or waiting until later rounds to place your bid.
Bidding Styles:
- Early Bidder: Place an early bid to establish interest and potentially deter other bidders.
- Patient Bidder: Wait until the final minutes to bid, which may prevent a bidding war.
Pro Tip: Avoid getting emotionally attached to any vehicle. Stick to your budget, even if bidding gets competitive.
Step 8: Finalize the Purchase and Arrange Transportation
Key Actions:
- Once you’ve won the bid, complete the necessary paperwork and finalize payment.
- Arrange for transportation of the vehicle back to your dealership. If buying multiple vehicles, look for bulk transport options to save on costs.
Pro Tip: For online auctions, ensure the transportation company is reliable and offers damage coverage during transit.
Step 9: Recondition and Prepare for Sale
Key Actions:
- Schedule reconditioning and inspection tasks promptly to reduce time to the frontline. Carketa’s reconditioning workflow tool can streamline this process by keeping track of tasks and timelines.
- Ensure each vehicle meets quality standards and addresses any issues found in the auction inspection.
Pro Tip: Prioritize vehicles that require minimal reconditioning to maximize profit margins and get them ready for sale quickly.
Step 10: Price and Market Your Vehicle
Key Actions:
- Use Carketa’s Dealer Analytics and Pricing Logic tools to set competitive yet profitable pricing.
- Highlight vehicle features and quality in your marketing to attract buyers who value high-quality used cars.
Pro Tip: Emphasize the vehicle’s unique selling points—like low mileage, premium features, or a clean history—to make it stand out in your marketing materials.
Conclusion
With the right strategy and tools, finding high-quality used vehicles at auctions becomes a streamlined, profitable part of your dealership’s inventory acquisition process. By using market data, vehicle history reports, and reconditioning insights, you can make smarter buying decisions that satisfy customers and boost your bottom line.
For even more support in managing your auction finds, explore Carketa’s tools for inventory analytics, reconditioning, and pricing to take your dealership’s operations to the next level.
