Here are some auction bidding tips that I hope will prevent you from making some careless mistakes.
These auction bidding tips apply to car dealer auctions not auto auctions online, or silent auctions. At car dealer auctions, bidding wars are common amongst dealers. It’s an ego thing. They’re trying to show that they got more money, and power, and discourage other dealers from coming back. Sometimes a dealer will bid a car up high because they see another dealer they don’t like bidding on it. Dealers I know sometimes give me their bidder badges, and ask me to bid on cars for them for this exact reason. If I bid on it and get the car they’ll give me a commission. It’s worth it to them because they’re getting the car cheaper. The dealers who they don’t get along with don’t know me, and won’t try to sabotage the bid to discourage me. It’s really childish but it happens all the time. It’s better to stand in the back where those types of dealers can’t see you. Don’t stand too far back. You want the auctioneer to be able to see you well.
You’ll find wholesalers’ bidding on their own vehicles at a dealer car auction, or have friends do it to bring up the price. The owner of the vehicle is usually the first one to raise their hand to get the bidding going. They know the least they’ll take for it so they know when to stop. Pay more for the vehicle if it’s something you know you can make a good profit off of. You’ll pay less for vehicles that aren’t as clean, but ironically you’ll end up paying more in the extra body, and mechanics’ fees to bring it up to par. Sometimes you can get caught up in the excitement of an auction and make poor decisions. Try not to do that. Try to stay calm, and think rationally. You’ll make better decisions with more experience. You’ll start to develop your niche, and pay more for a certain vehicle than another. Remember “the greater the risk, the greater the reward.” Don’t put it all on the line but don’t be too conservative either. If you’re too conservative, you’ll find it hard to win bids at auctions. Lets continue with some more auction bidding tips.
Flip a Coin
If you know a dealer at the auction who likes the same kind of car as you do flip a coin. Bids usually end with two people battling it out, going back, and forth. Either let the other dealer know that you intend to buy the car, and that you’ll lay off on the next one, or flip a coin over it. This way, the two of you won’t have to fight over the same car, and jack up the price. Be careful if your battling it out with just one person. It could be the owner of the car your bidding against jacking up the price so they’ll make more money. Sometimes I lose bids and regret it. I kick myself all the time thinking to myself, I should have kept bidding on that car. If you lost the car to another dealer, offer them $100 to give it to you. It’s worth it if you think you can make money off of it.
Don’t buy just for the sake of buying
Don’t ever buy just because you don’t want to leave empty handed. If you don’t get anything at the auction you’re at, there is always another dealer car auction tomorrow. You never know when your going to get hit with the great deals. Sometime I’ll go to a couple auctions in a row, and not buy anything. Then, there are other times I’ll go to a dealer car auction, and buy four cars at that one auction. Sometimes the deals are so good that I would have bought ten cars if I could. Don’t ever buy more than you can handle. I myself sometime fall into a buying frenzy, when I should be focusing more attention on trying to sell the cars I already have.
Dealer auction tipping
Dealers will tip auctioneers under the table when buying, and selling cars. The person who buys the most cars at my favorite auction “Sammy” tips the auctioneer under the table to weed out competition. If “Sammy” bids on a car, the auctioneer tries to say “sold” quick so know one else can get there bid in. I don’t hesitate. I’ve hesitated too many times, and lost cars. By hesitating they’ll get away with it. I also stand right in front, and make my bid obvious. I roll up a piece of paper, and wave it in the air. That way it’s harder for auctioneers to say they didn’t see me. Other dealers complain a lot “The auctioneer didn’t take my bid” I tell them to stand up right in front of them. It’s common sense. The same goes with selling. If an auctioneer knows they’ll get tipped for selling a dealers car, they’ll go the extra mile to get it sold. They’ll say things like “You got to be kidding me” “Unbelievable” Don’t let it ever persuade your bid.
Trust your own instincts when bidding
The sellers are tipping the auctioneers when their cars sell at the auction. The auctioneers will say things to persuade buyers to buy the car like:
“If you can’t sell this car you’re in the wrong business”
“You’ll make $5000 in one week”
“The car is cheap guys”
When I first started in this business, I made a lot of mistakes. I bought a Mercedes that stalled out, and was being push through the lane. The seller came up to me pretending it wasn’t his car, and told me it was out of gas. That car turned out to be a complete nightmare. He lied to me so he could get rid of his junk. Don’t listen to auctioneers, or sellers when your bidding. You can make a bad buying decision by reacting to their persuasion. Use your own intuition to make good buying decisions. Don’t let other dealers persuade you to not buy something you think you can do well with. They don’t know your niche. Trust your own instincts.
There are also guys on the floor called “ring men” who help the auctioneer in trying to sell the car. The auctioneer can’t see everybody so these guys assist the auctioneer in looking for bids on a vehicle. When they see a bid they scream, and throw their hand in the air. They also get in your face, and try to persuade you to buy the car. Sometimes they get annoying, because they’re to persistent. Don’t listen to them. They could care less if you buy a lemon. They say things like “your gonna lose it, come on.” Just ignore them.
Don’t jump the gun
Auctioneers always start the bids high. Take for example a 1995 Honda Civic. The auctioneer will start off at $3000. Some idiots will raise their hand immediately. Know one else will bid, and they’ll end up paying way too much. Wait until the auctioneer starts the bid really low. When the auctioneer starts the bidding high on the 1995 Honda Civic, don’t react. If know one is reacting the auctioneer will keep going down until someone jumps in. If know one is jumping in, the auctioneer will say “all right $500.” Now the price is low, and its time to bid.
Auctioneers talk really loud, and really fast! Sometimes it’s hard to understand them. When I first started going, I had a lot of trouble understanding them. Auctions are really loud too so you might want to bring some ear plugs. Listen carefully because auctioneers ramble a bunch of mumbo-jumbo in between the bidding. There have been a couple times when I’ve raised my hand because I thought the auctioneer said a number that he didn’t. One time I bid because I thought the auctioneer said $300 when he meant $3000. I won the bid but obviously didn’t want the car. I told the auctioneer the misunderstanding, and they let me off the hook, and sold it to the other bidder. Another time I did the exact same thing, and my friend though I was crazy. He said “are you crazy?” “don’t pay that much for that car!”. I said to him “Oh no! I did it again.” “I thought he said $220, not $2,200.”
Listen closely to the announcements before the bidding takes place. The auctioneer will announce frame damage, as/is, salvage title, true mileage unknown, etc. The auctioneer will also announce good things like if the vehicle comes with a guarantee. I had once purchased a 2000 Ford Explorer at a manheim auction without inspecting it prior to bidding on it. I got it cheap, and thought there had to be something wrong with it. Sure enough when I saw the car make a left, and drive off the auction block, there was body damage all along the other side of it. I had know idea it had that body damage when I was bidding on it, and my heart sunk into my stomach. I was careless, and didn’t do a lap around the vehicle before I started bidding on it. The auctioneer didn’t announce frame damage before the bidding took place. Manheim auctions allow you to do a post sale inspection on frame damage for $60 after the sale. I knew the car had frame damage from the body damage I saw, so I paid for the post sale inspection so I could hopefully get out of the deal. Sure enough it had it, and I was able to back out.
Now that you got some auction bidding tips under your belt, go apply them. Try not to be careless, and don’t beat yourself up if you make mistakes. Try to learn from them. Happy bidding!