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Is it easy to buy used cars at auction? Well, it all depends on how cunning you are, and it turns out that I’m pretty picky.
In our latest video (above), you can sign up as I spend the day at the Colchester auction in Manheim, where I’m trying to buy shares for our AI car dealership assignment: Clever Car Collection.
It’s possible that a few weeks ago I won a fake recommendation on how to shop in the busy alleys of a used car auction from racer Jamie Caple, who runs Car Quay, in Derby.
That time, we were only there to observe, but now, armed with his words of wisdom, we sought to find new stocks for ourselves, and that meant pushing.
The Mheim Colchester hosts a busy advertising sale on Thursday night where a large number of cars of my price range (lately up to around £8,000 in retail) go under the hammer.
Cars are usually partial trade-ins with groups of middlemen, which adds up to a lot of Big Wants Your Car rejections.
On the night of our visit, many cars had to drive in four lanes. In fact, it was going to be a daunting experience.
To prepare for the big event, we spent the day with the senior team in Manheim to advise us on the checks they perform on the cars, the auction procedure and get some advice on bidding.
We’ve heard about the National Auto Auction Association (NAMA) qualification through which all cars are shipped, secured checks submitted through the auction space, and what exactly they cover.
So far, on my car-buying journey, I’ve bought it from corporations like Carwow and Motorway. As much as I like the ease of use of those sites and the fact that many cars can be picked up at my front door, I discovered the ability of consumers to describe their cars somewhat lackingly.
Every car I bought at those two online auctions had more issues or damage that weren’t indexed in the auction profiles, so it’s fantastic to see the obvious difference in a physical sale.
Hearing about the NAMA score and reading the reports prepared on the cars before the sale will help you compare your bidding strategy more accurately.
We spent the day with our AI-generated shortlist formula to highlight the cars in the auction that we were looking to bid on. This takes Auto Trader’s catalog and knowledge and selects the cars that are in demand and will sell quickly.
Specifically, we look for cars with low mileage, well maintained and with a minimum of the mandatory degrees of preparation; Obviously, the same inventory that each and every broker wants.
From a list of more than three hundred cars, we went down to about six and then started reading about them. This is the other merit of a physical sale versus virtual listings: the fact that you have enough time to take a look at the cars. before bidding.
In the hammer era we had many opportunities to read about cars and there were only 3 of us: a Ford Fiesta, a Kia Ceed and a Toyota Aygo.
It’s frustrating that they had to take other paths at about the same time, which made my first auction hectic.
The halls were tremendously crowded and I was surprised by the number of investors who offered the sale. The party was fierce, but I found some comfort in the fact that some cars before the ones I liked didn’t achieve the CAP’s own prices.
When the Fiesta entered lane two, I was very nervous. The auctioneers had told me earlier that day to set a limit and stick to it.
“It’s very easy to get caught up in the excitement of the sale,” says Richard Hicks, the group’s auctioneer.
I set a limit of £4,100 for the Fiesta. That maximum I can get is returned after costs, shipping and preparation.
It cost around £3000 and I was worried at the auction. At £4000 I found myself facing another in the lobby and another in line and at £4050 the value went once, then twice, before the other shopkeeper in the streets went up. It got to £4,100 and I relented. To your delight.
I didn’t have time to feel the sadness when I turned around and the Kia was already on sale for £4,000. By the time I discovered my position in the catalogue where I had written down my maximum price, I had already surpassed it, finally reaching £. 600 more than my highest bid.
A few minutes later came the Aygo. Once again, I got involved and got at least 4 bids before she got close to my £3150 high. It sold for £3300. Boring.
A little discouraged, we subsidized ourselves. Earlier today, Hicks had told me that good luck in my first physical sales would mean being left with nothing, so if he’s right, I had one night to do it, but I didn’t really feel like it.
So what did I learn? Well, first of all, it’s imperative to do your research. I spent hours with our AI-assisted name picker and then went through the shortlist car lists in detail. I found the NAMA reports to be very helpful and the insurance verifications submitted through Manheim were also a big plus. What’s appealing is the consistency of the listings.
It was also much more effective to walk through the lobby of a car for about an hour, take a look at all my potential purchases, and assess the mandatory prep costs, than to peruse a bunch of online listings of varying quality.
Also, if you had purchased all 3 cars, you would have only had to pay one company and you may have delivered them in bulk through the carrier some time after the sale.
But it’s competitive. There are a lot of investors in the same position, all looking to do the same thing and big stocks generate a lot of cash – up to £600 more than blank CAP, like this Kia.
Would I do it again? But I think I have to attend a sale with more expensive stock. I was a little paralyzed not wanting to “buy work” and many of the cars in that Thursday night sale needed a bit of prep.
I can understand why the biggest used car dealers love auctions. It’s relentlessly efficient, especially when you need to buy a lot of cars at once. Caple told me that it’s not up to him to buy 40 cars in a single sale and that when he buys in numbers of ones, only physical auctions are held for that.
It also made me realize how rainy my ears are in this match. Each step of this adventure brings me a new respect for those of you who do it on a daily basis, especially those who manage successful businesses that drive a lot of cars. a month.
The complexity of these operations should not be underestimated, and if I need to expand the Clever Car Collection, I need to be informed. . . and quickly.
James is the founder and editor-in-chief of Car Dealer Magazine and CEO of parent company Baize Group. James has been an automotive journalist for over 20 years and writes about automobiles and the automotive industry.
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