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How to buy cars at auctions

Adam Knows

Adam Knows

YouTube: Adam Knows
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Report on How to buy cars at auctions

ThisWith the rising costs of cars going upwards to an average of almost $18,000 people are starting to realize the importance of obtaining a lower priced used car. With so many used cars entering the market each year this is an excellent opportunity for a great moneymaking business. We have compiled this report that will explain to you to go about doing this and begin making some big money by doing it.

When most people start a business they hope to make a few hundred extra dollars a month to start with. This business will certainly have that potential and can literally make you thousands a month if done the right way.

Keep in mind though that anytime you start your own business there are greater financial risks involved so don't 100% rely on it until you have been working it for awhile. It takes a lot of work in being able to run your own business full time.

There are really no special skills involved with your own business that you don't already need for when you work for someone else. Some good qualities to have are being dedicated, motivated, determined and persistent along with a good set of human relations skills. You should be able to manage yourself and your employees if your business starts to expand to that point. You will also need some technical skills that allow you to have a working understanding of the used car business.

The first thing you need to do is decide what type of cars that you intend on handling. Do you want to deal in luxury cars such as bentley, ferarri and other expensive brands or do you want to deal with economy cars such as nissan, chevy and ford. While you can just deal in general cars it is best to be specialized in a certain area so that you will gain a reputation for being a "source" for a specific type of car. Keep in mind that if you plan on dealing in luxury cars you will have higher overhead expenses such as advertising and rent due to the nature of the clientele you are trying to serve.

While you can operate out of your garage or home keep in mind that you will have certain business ordinances in your area that you will need to adhere to which will cause you to have to get special permits and deal with zoning regulations. Don't expect to be able to sell 10 cars at a time from your garage without some type of problem.

The next key is finding out where to obtain your cars at below wholesale prices so that you can best maximize your profits. A great place to start would be contacting the places below and getting listings of the weekly Surplus Auctions in your area.





Company
National Auto Research
Location
PO Box 758

Gainsville, GA 30503

Phone
(404) 554-1026





Company
N.A.D.A Used Car Guide
Location
8400 Westpark Drive

McLean, VA 22102

Phone
703-821-7193




Ideally you should get on the Government auctions mailing list which will enable you to get advance notice of GSA and DOD auctions that are in your area. To do this simply contact the customer service center below that corresponds to your region and let them know you would like to be added to their list.


Company
GSA Customer Service Bureau
Location
Post Office & Courthouse

Boston, MA 02109

Area
Serves: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island & Vermont.





Company
GSA Customer Service Bureau
Location
26 Federal Plaza

New York, NY 10278

Area
Serves: New Jersey, New York, Puerto Rico & Virgin Islands




Company
GSA Customer Service Bureau
Location
Ninth & Market Streets

Philadelphia, PA 19107

Area
Serves: Delaware, Pennsylvania, Maryland, Virginia & West Virginia





Company
GSA Customer Service Bureau

Location
230 S. Dearborn Street

Chicago, IL 60604

Area
Serves: Illinois, Michigan, Minnesota, Ohio & Wisconsin





Company
GSA Customer Service Bureau
Location
1500 Bannister Road

Kansas City, MO 64131

Area
Serves: Iowa, Kansas, Missouri & Nebraska






Company
GSA Customer Service Bureau
Location
819 Taylor Street

Fort Worth, TX 76102

Area
Serves: Arkansas, Louisiana, New Mexico, Oklahoma, & Texas






Company
GSA Customer Service Bureau
Location
525 Market Street

San Francisco, CA 94105

Area
Serves: Samoa, Arizona, California, Guam, Hawaii & Nevada






Company
GSA Customer Service Bureau
Location
Auburn, WA 98002

Area
Serves: Alaska, Idaho, Oregon & Washington


Th

The next thing to do after contacting the above office and getting added to the list is to obtain a copy of the NADA used car guide and also the Kelly Bloe Book. These are both used to indicate a wholesale and retail value on a given car. You will need this to know how much to bid and how much profit you can expect based on the retail selling price. Keep in mind also that certain cars will have different retail values based upon the region that you are trying to sell them in.

Once you have these books you are ready to find out what permits that you will need to operate this type of business, simply go to your courthouse and explain what you are trying to do . You will more then likely need a dealers permit no matter what city you are in. Also keep in mind that some auctions will not allow you to bid without having this permit, so you will need to obtain this for several reasons.

Once you have all the above paperwork taken care of simply look through the listings and attend each auction. If you can get something for below the wholesale book value you are almost guaranteed a profit. Remember this is a competitive business and you will not always find a deal at every auction so you will more then likely have to attend several before you will be making a significant income from this business.
 
<quote>Once you have these books you are ready to find out what permits that you will need to operate this type of business, simply go to your courthouse and explain what you are trying to do . You will more then likely need a dealers permit no matter what city you are in.</quote>

This permit is a bitch to get out here in NY. A friend of mine went through madd trouble b/c they wanted him to have the location set, etc. etc..
 
Amen...........By the way Da Don is a great man. I appreciate all that you have done. Every post that Da Don makes needs to be a sticky.
 
thanks for the info bro.. looking to just re-up rides for myself.. i've been wanting to find info on how to get a dealers license.. cause im moving to the "A" in two weeks and im ready to get my hustle on.
 
thesenator20904 said:
thanks for the info bro.. looking to just re-up rides for myself.. i've been wanting to find info on how to get a dealers license.. cause im moving to the "A" in two weeks and im ready to get my hustle on.
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I don't know about MD but n VA all u need is a state license 2 attend dealer auctions...the only "setback" is that u can only sell 4-5 cars a year but theres legal ways around that...
 
I have a contact who has a used car dealership right across the street from the auction site. Look to work with those who already have access as a way around the laws and do the business 'casually'.

He goes in every Tue. in advance of the weekly Wed. auction. I give him a list of car make/model/year/color You should have 4 or 5 choices to look for on Tue. For example, there may not be a 2004 black Infiniti I-30 Touring on the lot that week. Maybe a dark blue one or white one with all your option choices will be available, but not black that week. You can wait, or pounce on the deal. That's for buying for myself personally. If you're buying for others work out a reasonable mark-up so that it's still affordable to your client but you and the contact make $$ too.

Thanks for the info Don!
 
Da Don,

Great post. Let me interject some items. This comes from first hand experience.


1)If you don't have a lot to sell on, even if you have a strong web presence, you will find it difficult to sale vehicles for Dealer prices. The price that customers will expect to pay or will compare to are the private party prices. Don't go to an auction and buy because you figure you can sell it at dealer prices, you will be sad.

2)The largest segment of purchases are vehicles under $5,000. Try to buy the newest vehicle you can buy for no more than $5k. Also, the market for older luxury cars 96,97,98 etc isn't as good as you think it is. The reason is that many of these vehicles will cost over $5,000 and not all banks will finance them because of age/milage. The market for those spending over $5k and paying by cash is a smaller segment.

3)Don't try to sale very late model cars or high end luxury cars. Sometimes you can't sell them at all. Why? You don't have a lot and they know you got it from the auction. It's a huge misconception because they will go to a lot and spend top dollar on a "Gently Pre-Owned Certified" benz or bmw or lexus.........and the cars came from the sale dealer only consignment auction that you bought your vehicles from. It's all about the perception that the cars found at a dealer are better than the car being sold by some guy trying to make money on the side.

4)Don't get high on your own supply. Some of the best sellers are Dodge Neons, Hyndais, and small imports or domestics. Fuck with those BMWs, Benzs, and etc and you'll be loving driving around in the car and attempting to sell the car..........but, that shit won't be so damn fun 5 weeks later when you can't sell the car and folks are offering you less money than you paid at the auction......and after 5 weeks and 4,000 miles, the engine light came on and you maybe looking at a $400 fix.

5)Auction prices are often too high!! That's right. In the Kelly Blue Book, you have Trade In, Private Party, and Retail. Often prices at the auction are only a couple of hundred less than Private Party. Remember, I said you would be looking to sale your vehicles at Private Party value, not Retail value.

There are exceptions to all rules I mentioned. It can be a profitable business but you HAVEto do your homework. The typical NET profits on a $4k or 5k purchase is around $1k and expect it to take 3 to 4 weeks. Keep in mind that your money is tied up in a depreciating asset that can be stolen, towed, or damaged if you parking it on the side of the road or parking it on the streets. You may have to break even or take a loss to keep the money moving. If you hold a car for months, the amount you'll get becomes less and less.
 
Real1 said:
3)Don't try to sale very late model cars or high end luxury cars. Sometimes you can't sell them at all. Why? You don't have a lot and they know you got it from the auction. It's a huge misconception because they will go to a lot and spend top dollar on a "Gently Pre-Owned Certified" benz or bmw or lexus.........and the cars came from the sale dealer only consignment auction that you bought your vehicles from. It's all about the perception that the cars found at a dealer are better than the car being sold by some guy trying to make money on the side.

4)Don't get high on your own supply. Some of the best sellers are Dodge Neons, Hyndais, and small imports or domestics. Fuck with those BMWs, Benzs, and etc and you'll be loving driving around in the car and attempting to sell the car..........but, that shit won't be so damn fun 5 weeks later when you can't sell the car and folks are offering you less money than you paid at the auction......and after 5 weeks and 4,000 miles, the engine light came on and you maybe looking at a $400 fix.
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that right there is the truth
 
Real1-
You are right on all counts, but I'm thinking that for someone just starting out the easiest way to get going is to work with someone already inside the auction game and to be the middleman for someone who is ready to buy a specific car. I target cars that are just off lease and still have warranty left on them. I get the cars from the auction the same way the new car dealers do for their used car inventory. The 'slightly used' cars on the new dealership lots; you know the 2003 Benz 300E at the Ford dealership, or the 2004 Caddy CTS at the Chrysler dealership for example. Let's say you know someone who saw the cars and wants that 300E or the CTS. You can get it for them cheaper than if they buy it from the dealer.

That's my advantage. I find the cars for less than what dealerships charge and I get a % of the savings. I used to get more involved for people I know. Now I just play middleman and send people to my auction contact with my business card and he does the selling. Here are my 1st 4 direct deals:

#4
2 yrs. ago I got someone a 2000 Lincoln LS V8 just returned from a 3 year lease for $4,000 less than what dealerships wanted for the same type of car. I wanted that car for myself to be honest.

#3
2 yrs. ago I got my father a 2000 Infiniti I30 Touring. He was originally looking for a 2000 Nissan Maxima, then we saw the I30t on the auction lot. He wanted an ice blue Maxima with sunroof/cd/spoiler/cloth seats(hates leather). The I30t is dark bronze with sunroof/6 cd changer with cassette (he still plays his jazz tapes!)/spoiler + front-rear-side flares/heated leather seats/NAVIGATION SYSTEM for $3,500 less than what dealers wanted for regular I30s. Plus he got $4,000 for his 1996 Buick Roadmaster Limited. (He hated giving up that BIG-ASS BOAT!!)

#2
2 yrs. ago I got my neighbor a 2001 Porsche Boxter through the same dealer contact. He found a just returned lease in the next state over for $3,000 less than what dealers were asking for the same car. It's silver with a black drop top; not the 1st color choice but my neighbor ain't mad at me!

I say "I got" in the above deals, but all I did was go with them to meet my contact and go look at the cars. They did their own financing and sale of their old cars. I just got my $$ cut after the deals were done.

#1
I first met my auction contact when I got a 1995 Ford Explorer for my R.E. rehab business for $1,500 less than Blue Book. I used the reduced price savings to buy a warranty and when the 4WD tranny started messing up the warranty covered the FULL replacement costs at the Ford dealership.

I don't do this full-time; just a way to get newer upscale cars just off lease with warranty left on them for less than buying from a dealership. It could be a full-time business though.

I was thinking about the next off lease purchase for myself because clearly that's the smartest way to buy cars, in my opinion. I used to say NEVER-NEVER-EVER buy new cars. But now that I'm looking at all purchases (cars/homes/household items/electronics) from a business perspective, here's what I'm considering now.

rover051605.jpg


You can write off depreciation of the Range Rover Sport equal to the full purchase price!! :yes:
 
it's all about business.
go to the L.R. site and look at Special Offers for small business owners.
 
Asking questions doesn't imply that No work is being done. Share if you'd like, If not cool as well. peace
 
ODUB said:
Asking questions doesn't imply that No work is being done. Share if you'd like, If not cool as well. peace
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I didn't make that implication from you asking a question.

You asked about how you can write off the purchase of the vehicle; I answered by saying that it's allowable in business, and directed you to the place where the answer is. 'footman' provided a direct link. I could have done that as well, but I believe in empowering people by letting them work little and learn answers to their questions for themselves rather than hold their hand.

If a person doesn't know a particular vehicle manufacturer, or how to research the source of information on the web - that is the indicator of no work being done. I'm not saying that's your case, necessarily. I just shared my philosophy of empowerment with 'footman' in my response to him after I shared the place to find the answer with you.

Notice a pattern here? I'm all about sharing info, man.

'LSBIGMIKE' - I dunno shit about online auctions. To me you need to see a used vehicle in person before buying it. Especially now; there's gonna be a lot of flood cars from the Gulf coast coming into the market.
 
deputy dawg said:
I didn't make that implication from you asking a question.

You asked about how you can write off the purchase of the vehicle; I answered by saying that it's allowable in business, and directed you to the place where the answer is. 'footman' provided a direct link. I could have done that as well, but I believe in empowering people by letting them work little and learn answers to their questions for themselves rather than hold their hand.

If a person doesn't know a particular vehicle manufacturer, or how to research the source of information on the web - that is the indicator of no work being done. I'm not saying that's your case, necessarily. I just shared my philosophy of empowerment with 'footman' in my response to him after I shared the place to find the answer with you.

Notice a pattern here? I'm all about sharing info, man.

'LSBIGMIKE' - I dunno shit about online auctions. To me you need to see a used vehicle in person before buying it. Especially now; there's gonna be a lot of flood cars from the Gulf coast coming into the market.
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You provide a good deal of info, Thanks, that's if it hasn't been said. Now to address your answer. You didn't direct me to an answer, footman did with the link. And although you're implying again by indirectly saying that you're holding my hand, it doesn't hurt me none. I still appreciate the knowledge, opinions and replies to answers, whether good or bad. Notice my pattern? Not trying to stir anything up, just making sure that it's clear. Info is great, but isn't worth shit if it isn't applied properly. That's why I thank those who care to share regardless.

Empowering is great, thanks for sharing your info and philosophy. My question could have been a bit more detailed, but either way I figured out the accounting side of it all. Which was where my primary concern was at.
 
ODUB - "You didn't direct me to an answer..."
deputy dawg in prior post - "go to the L.R. site and look at Special Offers for small business owners."

Only a blind man can't see that as a direction to the answer. Hey, maybe you type in braile & have an audio web reader. I dunno...

ODUB - "Notice my pattern? Not trying to stir anything up,..."

deputy dawg's last reply here - you have a pattern of trying to get the last word and using my phraseology. If you weren't trying to stir things up you'd take the info you sought and say you found and do whatever it was you were gonna do with it. All the comeback really isn't needed (not by me anyway).

I'm not stirred or shook - I'm done! Thank you for your attention, and I'll leave now so you can have the last word.
 
when you listed the govt. auction sites, you didn't have info for GA. or Fl. guess they don't do that huh???

I just wanna get some shit for me, an get rid of my 96 sts, i ain't trying to sell shit :lol:
 
yeah da don i dont see no uncle sam listing for the carolina, tenn, al, ga hell ya bypass the southern states........

i know uncle sam got a shytload of boats/cars/suv from them drug dealers from seizures off i-95

not sure if it true but my boy claim his cousin got a 2000 Mercdes Benz S500 dirt cheap from a government auction at way below market cost.... shyt i used to see those ads in the usa today in regards to seizures......

but i am particular interest in the DEA seziures of BMF's properties esp in ATLANTA....them mofo had some hot ass cars!!
 
dacrazydeafdawg said:
yeah da don i dont see no uncle sam listing for the carolina, tenn, al, ga hell ya bypass the southern states........

i know uncle sam got a shytload of boats/cars/suv from them drug dealers from seizures off i-95

not sure if it true but my boy claim his cousin got a 2000 Mercdes Benz S500 dirt cheap from a government auction at way below market cost.... shyt i used to see those ads in the usa today in regards to seizures......

but i am particular interest in the DEA seziures of BMF's properties esp in ATLANTA....them mofo had some hot ass cars!!
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DEA/FBI seizures (real estate, business equip / gen property, marine, auto, etc...) are auctioned at GSA auctions. Treasury (IRS, Customs, etc) can be found at treas.gov
but you have better deals at local police auctions in metro areas (ex: in NYC from DUI and prostitution seizures(sic))
 
Leroy Soup Nutz said:
I don't know about MD but n VA all u need is a state license 2 attend dealer auctions...the only "setback" is that u can only sell 4-5 cars a year but theres legal ways around that...
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No dog. You cannot attend any dealer auction in the state of Virginia, unless you are DMV licensed to sell vehicles. Have a place of business, garage, offices, lot size of 10+ cars. Get a $25k bond & insurance. And a whole lot of regulation you have to follow. You need to know this business to go into business.

Oh yeah you can sell unlimited cars with a dealers license.
 

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