Finalize Sales | Online Auto Auctions | Auto Auction Tips | Benefits of Buying at a STX Auto Auction
Do you wish there was a guide to success that told you everything you needed to know to live a comfortable life? Unfortunately, there isn’t one. However, if you’re an auto auction bidder looking for a guide to help your business, we’ve got you covered.
Big Valley Auto Auction has been around since 2008 and has seen countless bidders use all types of strategies to ensure victory.
In this article, we’re going to break down the top 10 tips to give auto auction bidders of all experience levels strategies to utilize when bidding at their next auto auction.
What Are Some Tips I Can Use to Bid at an Auto Auction?
While these methods aren’t 100% guaranteed to lead to success, they can be helpful to know. So, let’s get started. Here are 10 tips to help you prepare for bidding at an auto auction.
Tip 1: Verify the Auto Auction’s Reputation
Before you even show up to an auto auction, it’s best to do a background check on the company you’re buying from. There are 5 ways to verify the auction’s reputation:
- Google reviews
- Get to know the employees
- Refer to the auctions website
- Customer testimonials
- Word of mouth
Google Reviews
The first step most people make before going to a specific business is to check the Google reviews. While Google reviews are based on individual customer experiences and may differ from person to person, they are a good indicator to get an idea of how good or bad their services are. You can base your decision off of a business’ 1-5 star rating and customer comments.
Get to Know the Employees
If you don’t want to rely on the opinion or experience of Google reviewers, you can visit the auto auction in person and get to know the employees firsthand. You can speak with front counter staff, sales representatives, and auctioneers to build a relationship and gain trust with the auto auction.
Refer to the Auto Auction’s Website
Most auto auctions have a website with a Frequently Asked Questions (FAQs) section that features information customers usually search for. For example, Big Valley Auto Auction has a learning center that features articles on multiple topics, such as vehicle pricing and the importance of vehicle titles.
Customer Testimonials
Don’t take your auto auction’s word for it, hear from their real customers. Testimonials are basically customer references that confirm their experience with a business and their services. Here at Big Valley, we love hearing from our dealers, just like you! See what real customers have to say about Big Valley Auto Auction:
Word of Mouth
Word of mouth goes hand-in-hand with testimonials, except this is expressed through conversation, rather than on a website. Some auctions gain customers just from past dealers recommending their services to other dealers.
Verifying an auto auction’s reputation helps you know their history, how they operate, and whether or not they are a trustworthy business.
Tip 2: Research the Auto Auction Market
Like any purchase, doing your research beforehand is very important. You want to make sure you know what you’re spending your money on and it’s exactly what you want.
One method that can assist your research is to check where the current auto auction market is. For example, you can ask an auto auction to get the market report from 2 months ago, to see how the price of a vehicle has either increased or decreased over time.
Tip 3: Verify the Auto Auction’s Vehicle Condition
Knowing a vehicle’s condition before bidding on it will help prevent you from buying a vehicle that’s not in the shape you expected. There are 3 ways you can verify the condition of a vehicle.
- Condition reports
- AutoGrade
- Preview Day
Condition Report
A condition report is a complete visual and cosmetic inspection of the interior and exterior of a vehicle. It points out any repairs a unit may need, such as paint or replace the bumper.
Condition reports are also useful for online sales, accurately representing the vehicle when dealers aren’t physically able to be at the auction. It will be the document that buyers depend on to give the correct information, letting them know what they’re potentially going to bid on.
AutoGrade
An AutoGrade is the grade a vehicle receives, based on the level of overall damage it has. The AutoGrade is graded on a scale of 0-5, with 0 being the worst condition possible, and 5 being perfect and ready to be driven off the lot.
Preview Day
Big Valley Auto Auction has a preview day every Wednesday, which allows buyers the opportunity to view vehicles that will be running on sale day.
You can take advantage of Big Valley’s preview days by looking at the vehicle firsthand, checking for any visual damages, and driving it up to 8 miles per hour around the lot.
Tip 4: Set a Budget For an Auto Auction
Going into an auto auction with a set budget helps you keep your bids within a specific limit of spending. Sometimes bidders will go to an auction, bid until they win, then notice they spent more than they expected (or more than they have in their account).
There are 3 apps you can use as a price indicator for the vehicle you’re interested in.
- Manheim Market Report (MMR)
- Autoniq
- Kelley Blue Book
Manheim Market Report (MMR)
MMR gives you pricing calculations, based on recent transactions in the market. This gives you an idea of which vehicles are currently in demand and approximately how much they’re being sold for.
Autoniq
Autoniq has an exclusive profit guide that provides actual sale price and cost for your local wholesale and retail market.
Kelley Blue Book
Kelley Blue Book shows you what you should pay for a used or new vehicle, based on what others have paid in your area.
Knowing pricing information ahead of time will give you an idea of how much money you’ll need, in order to purchase your desired vehicle.
Tip 5: Have a Strategy For Auto Auction Day
Having a clear strategy for auction day will help you be prepared for what’s to come. A useful strategy will keep you from overspending, and missing announcements, such as vehicles being sold “as-is” or running under a red light.
One helpful method is to create a “run list”. This is a list of vehicles you’re interested in purchasing, what lane they’re running in, and how much you’re willing to spend on it.
Tip 6: Stay Focused During The Auto Auction
Auto auctions are very hectic events. With multiple vehicles running through 4 lanes and numerous people bidding for the same vehicle at the same time, it could be easy to get caught up in the excitement of it all. But you shouldn’t let your emotions get the better of you. Keeping your eyes on the vehicle you want, and blocking out any distractions is key to a potential win.
If you feel overwhelmed in the crowd at an auto auction, Big Valley Auto Auction has an outdoor seating area, away from auctioneers, where you can sit and watch until it’s your turn to bid.
Tip 7: Time Your Bid During the Auto Auction
As the old saying goes, “Timing is everything”. When bidding at an auto auction, bidding too early or too late could make or break your chances of winning.
Auctioneers usually start bids at around $1,000 to $2,000 above asking price, to help sellers potentially make a good profit. For example, a seller could be asking for $10,000, and the auctioneer will start the bid at $12,000. In this case, it’s best to not bid $12,000 right off the bat. Going all in right away might actually backfire, as some vehicles go lower in price if no one offers the first price. A good rule of thumb is to wait until the auctioneer goes to the lowest price to place a bid.
Tip 8: Avoid Bidding on the Wrong Auto Auction Vehicle
Bidding on the wrong vehicle is usually the result of confusion or not having much experience with auto auctions. Whether you’re bidding online or in-lane, accidental bids can happen in any situation.
If you’re bidding in person, it’s best to stay close to the vehicle you plan on bidding or keeping your eyes on that specific vehicle. If you’re bidding online, it would be beneficial to go to a designated working area where you can focus and separate yourself from anybody who might bid for you.
Tip 9: Avoid Getting in a Bidding War During an Auto Auction
When you’re determined to buy a vehicle and someone keeps outbidding you, more than likely you’ll let your competitive spirit take over and bid until you win. Unless you’re a millionaire who’s willing to spend whatever it takes, getting in a bidding war would hurt you financially.
Bidding wars can also be hurtful emotionally, as the anger of getting outbid can get the better of you and ruin your overall auto auction experience. Try your best to stay calm, and if you don’t end up winning, move on and try your luck the next week.
Tip 10: Avoid “Spotting” During An Auto Auction
In the auto auction industry, the term “spotting” applies to bidders who are usually friends with each other and try to help each other make a sale. An example of spotting is when Victor is trying to sell his vehicle for $10,000 and his friend Joey bids $10,000 in an attempt to get the bids started. However, this doesn’t always work in their favor. If nobody else bids on Victor’s vehicle, Joey is stuck with it and now has to pay $10,000 for something he didn’t want.
While it may seem like a good strategy to outsmart the competition, it’s not a guaranteed method to make a sale. It’s very risky and could backfire on you and those involved.
Am I Ready to Bid at an Auto Auction?
If you’ve filled up your notebook with all these tips or took screenshots on your phone, you’re probably prepared to bid.
Whether you’re a first time bidder getting ready for your first auto auction, or you’re an experienced bidder who’s looking to improve their bidding game, you can use these tips to help you prepare for your next auto auction.
If you've decided that you'd like to use these bidding tips at Big Valley Auto Auction, click the button below to speak with our dealer registration specialist to get you registered.
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