Dealers sending trucks to auction...

CFRED70 · March 2, 2017

Talking to a dealer the other day got me wondering this......I ask him what happened to one of the trucks on the lot, he said they gave it a try on the selling route and after awhile they sent it to auction. Now, this certain truck I had made an offer on, a low offer, but an offer. He said they wouldn't be making enough on my offer. So a month or so later they sent it to auction. Do they really make money at the auctions? Or is it more of moving one vehicle to bring something to their lot they think they can sell quicker?

duquephart · March 2, 2017

Talking to a dealer the other day got me wondering this......I ask him what happened to one of the trucks on the lot, he said they gave it a try on the selling route and after awhile they sent it to auction. Now, this certain truck I had made an offer on, a low offer, but an offer. He said they wouldn't be making enough on my offer. So a month or so later they sent it to auction. Do they really make money at the auctions? Or is it more of moving one vehicle to bring something to their lot they think they can sell quicker?

Stuff that doesn't move goes to auction. They have a pretty good idea of what anything should fetch.

Arth · March 2, 2017

I think they buy them at auction and put a little money into them. Then keep it for three months and if it doesn't sell they hope to send it back and get what they put in it. I figure sometimes this works because usually the car sat the entire time and didn't get any milage.

CFRED70 · March 2, 2017

The vehicle I'm talking about was a local trade, that they actually sold the first time to the guy who traded it in. I know they probably gave him less than what I offered, but I was curious if they get more at auctions?

rully1012 · March 2, 2017

They can estimate pretty close on what they will get at auction and what the current trends are. If your offer is close to their bottom auction price they'll take they're chances. Because

1) they clear their hand off the vehicle and sell as is.

2) they get cash right away at sale

3) maybe the car has some previous damage ,some dealers won't sell them on their lot

So essentially they are saving money by not committing to you that they will stand by the truck they sold you.

And take a chance at making money at auction.

Did you offer cash?

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duquephart · March 2, 2017

This is the source of much unhappiness on the part of used car buyers. The salesman tells you it's in "excellent" condition, that it passed their 32,458 point inspection with flying colors. Then the tranny falls out half way home and you come to find out it's some piece of crap they picked up at auction. Beware the vehicle that nobody seems to want!

CFRED70 · March 2, 2017

Did you offer cash?

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No. Thats a whole nother topic. Do many of you use a credit union/bank and get a loan and everything taken care of loan wise before you head to the dealer? Is that the best way to go when purchasing with financing?

JimCost2014 · March 2, 2017

Talking to a dealer the other day got me wondering this......I ask him what happened to one of the trucks on the lot, he said they gave it a try on the selling route and after awhile they sent it to auction. Now, this certain truck I had made an offer on, a low offer, but an offer. He said they wouldn't be making enough on my offer. So a month or so later they sent it to auction. Do they really make money at the auctions? Or is it more of moving one vehicle to bring something to their lot they think they can sell quicker?

old age units are tough. a lot are bought by local auto wholesalers/brokers with cash on the spot. like the above poster stated, it probably had issues, why it was traded in the first place, that no one wanted to deal with. did you ever try to see the maintenance records for it?

JimCost2014 · March 2, 2017

No. Thats a whole nother topic. Do many of you use a credit union/bank and get a loan and everything taken care of loan wise before you head to the dealer? Is that the best way to go when purchasing with financing?

your credit score should dictate your loan rate for financing. there are still dishonest F&I managers that will pad their wallet with a higher rate, but most will give you the best that you qualify for. being proactive and getting your own financing in line before is a great idea because you know what to expect for a rate (or close to it) before you go to the dealership.

rully1012 · March 2, 2017

No. Thats a whole nother topic. Do many of you use a credit union/bank and get a loan and everything taken care of loan wise before you head to the dealer? Is that the best way to go when purchasing with financing?

I'd say credit union normally beats dealers but I've had two dealers match or beat the rate.

And another time I talked them down more on the final price then the financing rate because I already new I would refinance any way in less then a month..... So to me give me whatever rate you want I'm more concerned with the final price of course you never tell them that.

I just made it seem like I couldn't afford the payment and since the rate " couldn't go lower" I had them bring the price down to compensate. Then turned around refinanced as soon as my registration card came in and didn't make a single payment to gm financial.

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rully1012 · March 2, 2017

I also bought gap insurance from the credit union for 295$

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Lgetz · March 2, 2017

CFRED alot of variables in play trade allowance, financed or cash purchase and flat out need to move a unit. If the dealer was asking 30K for the truck and you offered 24-25K no way will they go for it at that point. Time went by there was no interest so the truck became a liability. Dealerships have to meet payroll, accounts payable, and other expenses like any business. They decided to send it to a dealer auction and get what they had in it which I suspect is around your offer. The difference is as Rully pointed out they sold the unit as is and got the money on the spot. Furthermore they didn't sell it to that "Prick" who made a lowball offer. Dealers like getting their way and are big AHoles when they don't. Happened to a friend when he bought his 2015.5 Denali HD. Negotiated a price that was $800 more than another dealer since they had truck in stock but the wheels were 5 spoke and not the multi spoke. Friend told sales manager its a deal if they swap out wheels from another unit which the sales manager refused to do. We said thank you very much we won't be back and left. Went to the other dealer and bought the truck for less even though it was dealer traded. First dealer called the following day and stated "well we have the truck you want and aren't trading it to the other dealer blah blah blah." Friend told them he already bought it they were getting truck from another dealer and would deliver it in 2 days to his house. Repeated that once they let him leave he wasn't going back and they hung up.

duquephart · March 2, 2017

Folks think that the nicely dressed and well spoken salesman at the big local dealer is somehow different than the cigar chomping scumbag at "Honest John's" "Buy Here Pay Here" in the inner city. Think again.

CFRED70 · March 2, 2017

I was just curious if they get decent money at the auctions....seems like they would basically break even every time. As I may have threw an offer out that was low, and he said at this time I can't sell it for that we just took it in on trade. I would think 3 months later when its still there at that price, why not reach out and try and get me into that truck instead of breaking even at auction. Feel like its more of that "no liability" if sold at auction.

CounterMeasure · March 2, 2017

By sending it to auction, they didn't have to pay the salesman the commission either, nor pay hours for the finance and title guys post-sale. So, if the auction price and your price were about the same, they are likely to make a bit more at the auction due to less in-house overhead.