“And this showcase can be yours if the price is right”. These words were made famous by the TV game show, “The Price is Right”. If you’ve seen the show, you know that players bid on prizes, with the closest bid to the actual prize being the winner. The same scenario occurs at auto auctions. However, the bidding is not always as enthusiastic as the TV show.
Although Big Valley Auto Auction doesn’t auction off brand new refrigerators or vacations to the Bahamas, we do auction off a variety of vehicles. Since 2008 we’ve had bidders from Texas, as well as other states, attend our auctions and battle over our inventory. The difference between bidders from auto auctions and The Price is Right is auto auction bidding can get a little more heated.
In this article, we’re going to explain what a “bidding war” is, what causes them, how to avoid them, and how to win one.
After reading this article, you’ll have the information needed to navigate through a bidding war, in the event you find yourself in that situation.
“Bidding wars” are when 2 or more buyers bid on the same vehicle running through the lane. These situations can drive up the price of the vehicle, which benefits the seller, but can also lead to a higher final price for the winning bidder.
There are 2 factors that can cause a bidding war to erupt.
As human beings, it’s natural for us to want to win. It’s instilled in us at a young age that you have to win every competition you’re in. This behavior emerges when auto auction bidders are interested in the same vehicle.
A unit could have a starting bid of $10,000 and end up being sold for $15,000, due to multiple people showing interest in it and not wanting to lose it. If you have enough money, this might not be an issue to you. However, some dealers get caught up in the heat of the moment and bid for the sake of bidding. If you have the winning bid but don’t have enough money to pay, this could end in a nightmare (and a Non-Sufficient Funds fee).
As mentioned above, auto auctions usually have a friendly atmosphere. However, there is a reason the word “usually” was used. Unfortunately, not all dealers are buddies. There will be instances when 2 dealers won’t see eye-to-eye and only want a vehicle to prevent the other from having it.
In such cases, the competition can become very personal, causing you to lose your composure in the festive auction environment. Although this might not ruin the experience for other dealers in attendance, it could potentially discourage you from attending another auction day.
Avoiding a bidding war is easier said than done. If you’re someone who doesn’t want to risk their money and sanity, there are 3 things that can protect you from falling into the trap of a bidding war.
1. Stick to a Budget
Most dealers enter auction day with a set amount of money they plan on spending. When they reach that number, they call it a day. If you’re able to stay level-headed when you hit your limit, you can step away from the auction block.
2. Don’t Get Emotional
When we lose at something, our first reaction is feeling upset, especially when you put so much effort into what you were doing. If someone keeps outbidding you and you know you won’t be able to beat them, stop, move on, and try again next time.
3. Follow a Bid List
A “bid list” is a list of vehicles dealers make that include the vehicles they’re interested in buying that week. If you stay in the lane where your desired vehicle is running, it prevents you from entering the rest of the crowd, getting caught up in the moment, and attempting to outbid other dealers.
While bidding wars aren’t something we recommend dealers engage in, we can’t stop you from making that decision. If you’re not afraid to get in a bidding war, there are 2 ways you can increase your chance of winning.
1. Check Your Budget Beforehand
Similar to dealers avoiding bidding wars, checking your budget before going all in is a wise move. While you may not care about spending a lot of money, you should make sure you have enough money to begin with.
2. Stay Persistent
In the words of John Cena, “Never give up”. If you have the funds to enter a bidding war, you’ll need to stay focused and outlast your fellow bidders. This is important because the dealer you’re trying to outbid could possibly be doing the same to you. You may be in a war with someone who has sufficient funds as well. This is where persistence and the will to win comes into play.
If you’re someone who is hellbent on winning, no matter the cost, then bidding wars may be a fun experience for you. However, if you know your limits and want to play it safe, avoiding bidding wars is advisable.
If you're new to the world of auto auctions or thinking about getting involved, this article can serve as your roadmap for dealing with a bidding war if it occurs.
Avoiding bidding wars is 1 tip we suggest when attending your first auto auction. We want your auto auction experience to be successful, so here are 10 bidding tips for a potentially successful auction day.