Selling at Auction
How to Use an Auction to Sell Your Car for Good Money
Very few car owners consider selling their car at auction. But in certain circumstances, an auction sale can be a very prompt and profitable way of moving on your old car.
In this article I will show you when you should and should not try to sell your car at auction.
The pros of an auction sale:
- You can sell your car quickly
- You can get paid within a day or two
- You can sell the vehicle for more than you expected…More on this in a moment.
Selling a car at auction – The Cons
- You may not sell your car
- You may not get any bids at all
- You will be without your car for the duration
- You need to pay the auction house to enter your vehicle whether you sell it or not
- Your car could get damaged at auction
- Your car will be “privately entered” which is a detriment to car dealers (in most cases but not all)
Understanding when an auction sale will work for you
It’s a little-known fact that more and more private buyers are going to auction to buy their next used car. As little as a decade ago auction houses were 90% full of car dealers only. But as private buyers try and sift a bargain, their attendance at auction is growing year on year.
What this means is that auction prices are going up and up.
Dealers are going nuts at the diminishing prospect of finding used cars to sell for a profit from an auction. With more and more private buyers bidding, the dealer’s profit margin is getting further squeezed. ‘Privates’ are prepared to pay a little more than trade prices and a little less than full retail.
What this means for you is an increased possibility of selling your car for good money at auction.
The icing on the cake
Perhaps the biggest hindrance to selling your car at auction is the fact that it must be “privately entered.” What this means is that your particular car doesn’t belong to a fleet group of cars from a source such as “Motability” or “Lloyds.” When a car is privately entered a dealer will tend to ignore it because the history of the car is a little erroneous compared to that of a group vehicle. Quite often a privately entered vehicle has been entered into auction because it has some major mechanical fault and the owner (often dealer part-exchanges) is trying to cash out.
Group vehicles are almost always one owner from new and have been serviced under contract by the supplying dealer. There’s often a full printout service history, spare keys etc. etc.
But privately entered cars don’t carry this kind of clout.
However, with more and more private buyers showing up at auction, the privately entered car has a renewed ability to make some decent money; Private buyers don’t tend to know a privately entered vehicle from a group one, or the differences between them.
Dealers can still be interested in privately entered cars
Despite this, car dealers will still bid on certain used cars that have been privately entered for sale at auction. But it all depends on the car in question.
Let’s say you have a 2010 Hyundai 2.0 petrol saloon that’s beige in colour, 98,000 miles, with limited service history. This car will hardly ever be noticed by car dealers because it’s undesirable (difficult to resell.).
Why is it undesirable?
- It’s a big petrol engine which can be harder to sell
- It’s high mileage and more likely to have faults/mechanical problems
- The colour is undesirable
- It’s a saloon which is also more difficult to sell
- Lacks a good service history
- Hyundai’s don’t tend to hold their value
We can agree that there’s very little about this example car that would make a dealer want to buy it?
Here’s a second example:
2014 Volkswagen Passat 2.0 TDI Diesel Estate 5 Door, metallic black, 53,000 miles, full service history, spare keys, leather interior, sports pack and only 1 previous owner from new.
This car is extremely desirable
- It’s a Volkswagen Passat which is a popular make and model that holds its value well
- It’s a diesel so it’s great for economy and is easier to sell
- It’s a diesel estate which makes it even more desirable
- Metallic black is one of the best-selling colours
- It’s good low mileage
- Great service history
- And has an added sports pack with extras
We can also agree that a dealer will find this car extremely desirable to because it is easy to sell.
This kind of vehicle (and many others like it) will get plenty of attention from dealers and private buyers alike.
And I hear what you’re saying. “
If it’s that desirable wouldn’t it be better to sell the car privately?”
As auction attendance grows with more and more private buyers, and prices continue to rise, you’ll find certain desirable cars fetching huge prices. The VW I’ve just described above is just one typical example.
I have been at countless car auctions over recent years and seen privately entered, desirable cars fetch “above retail” prices! That’s more than what you could fetch via Autotrader! Even more, than main dealers may be able to sell the car for, who are offering a 12- month comprehensive warranty!
Sure you have to take the auctions seller fees into account but it still makes for a price far and above what you’d traditionally expect from an auction.
The reason why certain desirable cars fetch sky-high prices is that they are irreplaceable. I use that term loosely, but irreplaceable means they are very difficult to source and when they do come around they fetch crazy amounts of money.
In cases like the one I’ve described, selling a car at auction is the surest way to fetch the most money possible.
Working out if your car is deemed “irreplaceable”
There are no hard and fast rules but I’ll give you a few guidelines of what is currently a popular and desirable make, model or feature…
- Ford Fiesta’s
- German Diesels (particularly VW, Audi)
- Estates (especially diesels)
- Small 5 door hatchbacks (particularly low mileage)
- Special editions such as Seat Leon FR Diesel sports or Golf VR6 etc
- Range Rovers
- Low mileage diesels
Bear in mind that I can’t describe every make and model of what is popular these days. I base my lists on my experience of what sells like hot cakes at ridiculous prices.
If you’re unsure if your car fits the ‘irreplaceable’ criteria you can send an email at email@example.com and I’ll tell you what I think. Please include a reasonable description of your vehicle.
If you feel that selling at auction is right for you all you’ll have to do is head over to Google and find out where your nearest auction is. The market leaders are BCA (British Car Auctions) and Manheim (who own the motors.co.uk car selling platform.)
Use their websites and find out the process of entering your car privately.
More car selling articles:
I wish you every success.
The Used Car Guy