We often hear about the fantastic deals folks have gotten at car auctions, but few of us really know much about them, much less have attended one. They work similar to other auctions: You've an auctioneer and bidders. Sellers of auctioned cars may be anyone from car dealers to car lease companies to credit lenders to police force agencies. The bidders in the auctions are usually car dealers, car collectors, and private individuals. In some instances, private auctions are held only for dealers or collectors that are invited. The individual with the best bid wins the auction for that being bid on at the time. All bids form a binding agreement. All auction sales are final, unless otherwise stated.
One of the most common forms of car auctions are the people held by car lease companies. Once a vehicle becomes one to five years old, with respect to the car model and the lease company, the car lease company will typically stop leasing the vehicle and instead try to sell it. In many cases, the vehicle lease company chooses to auction the automobile off because it does not specialize in car sales and it is inefficient for the lease company to try to put the vehicle from a whole lot and try to sell it themselves. An automobile lease company's best buyers at these are typically car dealers who do specialize in selling cars. In these cases, the vehicle lease company benefits by getting quick cash for the vehicle and not paying out for storage, upkeep and sales people. The vehicle dealer benefits by getting a relatively new car that has been well-maintained that it can sell at a decent markup.
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However, it is sometimes the automobile dealers themselves who hold car auctions. This generally occurs when they are running out of space on the sales lots and they wish to use that space for cars that sell either quicker or at a higher profit margin. In these situations, the car dealer will be able to get rid of the vehicle quickly by putting it in a auction and utilize the cash flow to put more current inventory on the car lot. It is not uncommon for the vendor and bidders to all be car dealers.
The most discussed types among everyone are government car auctions. That is because the government regularly seizes vehicles associated with felony offenses. These cars can be found in more varying conditions than cars from other types of auctions. Several cars have already been highly customized and tweaked. These are the auctions you hear about in which a bidder shows up and puts in a tiny bid and suddenly finds himself with a new car. While this isn't the normal situation anymore, it does still frequently occur.
For a variety of reasons, increasingly larger vehicles are turning up in car auctions. It is not too unexpected to see a large diesel truck or recreational vehicle auctioned off these days. These often provide a better deal than small cars as you will find fewer bidders there for these kinds of vehicles.
When you go to a car auction, be sure you discover what the guidelines are for that auction. Some enable you to inspect the cars before the auction takes place. You should make the most of this or you are certain to get fleeced because other bidders may have a mechanic look them over in many cases. Other auctions don't allow pre-inspection. Keep clear of simply how much you bid in these auctions nearly as good cars usually aren't put in these types of auctions. Much of the info about various auctions and their rules and schedules is posted on the Internet.
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