How Much Do Cars Sell For at Dealer Auctions?

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Scoring a deal on a used car feels great. Not only do you drive away in the vehicle of your choice, but you save money in the process.
With today's vehicles exhibiting excellent build quality and standing the test of time like never before, a well-maintained used car presents a good option compared to buying a new car.
When you factor in depreciation, you could save thousands of dollars on a used car yet still drive something that feels like new.
But when you buy a used vehicle from a car dealer, where does it come from? Have you ever wondered how car auctions work?
Let's look at the details of dealer auctions and how wholesale pricing differs from what you pay.
How do car auctions work?
Several types of auction cars go up for bidding at a dealer-only auto auction.
Recent trade-ins that don't fit a reseller's inventory needs may appear on the auction block.
Cars returned to leasing companies that need a new owner are another steady supply of pre-owned vehicles.
And when a borrower doesn't make their auto loan payments, the repossessed cars are auctioned off to recover losses incurred by a lender.
To participate in a dealer-only auction, you must be a licensed dealer. Members of the general public or regular car buyers aren't allowed to attend.
Applying for a dealer license to participate in an auction isn't a viable option, except if you plan to become a reseller. Securing a dealer license can cost a lot of money and be time-consuming.
Buying a used car instead of a new one can save you many thousands of dollars. But where can you go for not only great car prices but also quality vehicles? At Shift, our certified mechanics perform extensive 150-point inspections on every car sold, and you get a free Carfax report for the ultimate in transparency. You can buy any of Shift's cars directly online from the comfort of your home, know it has no hidden issues (from our 150-point inspection) and get a fair, up-front price. Want to take a test drive before you buy? If you live in one of Shift's many service areas, a concierge will drive to you, letting you get a feel for the performance before signing the papers.
How much cheaper are cars at dealer auctions?
Like anything purchased at wholesale prices, car values at dealer auctions are less than those paid at retail.
Car auction prices are, on average, 20 percent less than those of a private seller or used car dealer.
For the driving enthusiast, a 2018 Ford Mustang GT with around 14,000 miles and a classic V8 engine sells at auction for $25,400. With a retail value of $31,100, that represents a savings of 18 percent.
Or on the other end of the spectrum, for those who prefer excellent fuel efficiency, a 2017 Chevrolet Volt four-door hatchback with about 33,000 miles sells for $14,450 at auction, which is 23 percent less than its retail price of $18,750.
Pickup trucks are no different from sports cars and hatchbacks for wholesale prices at dealer auctions. A 2014 Dodge Ram 1500 with around 91,000 miles and a 5.7 liter V8 costs $15,800 at auction compared to $21,400 at retail, a difference of 26 percent.
Whichever car category you look at, dealer auctions offer significantly lower prices than those paid at retail.
When you're in the market for a new car, you'll probably want to sell your old one. But how can you be sure you receive good money for your used car? At Shift, you can get a fair offer, better than at the dealership, driven by powerful machine learning algorithms and tons of data. All you'll have to do is enter the make, model, year, and mileage on Shift's easy-to-use website, and you'll instantly receive a purchase offer that's valid for seven days. With Shift, there is no need to spend the extra time waxing and washing the car. A little dirt will not affect the quote, and we fully detail the cars ourselves anyway before listing them for sale.
What to look for when buying a car at auction
To attend a dealer auction or bid on various dealer auction sites, you first need a license.
If you're a professional reseller with a dealer license, it makes sense to get the best idea you can of a vehicle's condition before bidding.
Since there's no way to test drive the car up for auction, performing a visual inspection of the exterior, brake discs, and overall stance of the vehicle can help you decide if it's worth placing a bid.
For extra reassurance, bringing along a professional mechanic can help zero in on any problems with the car and further inform you of its condition.
And even if a vehicle at a dealer auction looks shined up and clean, a paint meter can help show you the exact quality of the finish.
Locating the car's VIN and obtaining a vehicle history report can alert you to any past accidents or significant repairs and save you time and hassle down the road.
And online price guides show you what similar cars sell for on the wholesale market, offering advice on what you should pay.
2016 Land Rover Discovery Sport (from $21,450)


How to buy cars at auto auctions
Like other auctions, dealer auctions involve bidders competing to buy a vehicle on the auction block.
Dealer auctions can be loud and fast-paced, so knowing just what you're bidding on helps you make wise decisions as the price climbs higher.
You may not be acquainted with the party selling a particular vehicle, adding to the uncertainty of buying a car you haven't driven.
And even if you inspect a car beforehand, you run the risk of purchasing something in need of repairs.
However, if you're the winning bidder on a misrepresented vehicle, you don't have many options to recover your money.
How to buy cars at auto auctions in summary
While dealer auctions offer vehicles for sale at wholesale prices — usually around 20 percent less than their retail price — only those with a dealer license can attend them. Even then, purchasing a car at auction comes with risks. A vehicle sold at auction could have a hidden salvage title or come with an array of mechanical issues.
Since you can't test drive a car before it goes up for auction, performing a thorough visual inspection, and even bringing along a mechanic, can assist you in making a good buying decision.
When you buy your next car and need to finance, where can you turn for excellent service and a great deal? Shift works with a network of trusted lenders who compete for your business, so you get the best deal on financing. Applying for financing with Shift is quick and easy, with no cost or obligation. Most applicants receive an offer within minutes instead of days. Financing with Shift is so convenient that nine out of 10 customers choose us when they need a loan.
2016 Lexus GS 350 F Sport (from $31,450)


Legal notes
The views expressed in this article do not necessarily reflect the views of the author or Shift Technologies, Inc. Shift does not endorse or evaluate the accuracy of any claims made or data provided by third party sources referenced herein.
This article is for informational and educational purposes only and may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our effort to advance auto education. We believe this constitutes "fair use" of any such copyrighted materials as provided for in Section 107 of the US Copyright Law. The material in this [article/blog/website] is distributed without profit and only to those who have demonstrated an interest in receiving the included information for research or educational purposes.
All prices are based on vehicle availability and pricing as of
April 15, 2022
.
Pricing shown is not guaranteed and does not include taxes or other product fees.
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