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Buy Your Next New Car From a Dealer Auction 

By Mike Richards Updated: 05/23/2019 Posted: 10/23/2015

Buying a car from a dealer auction has been proven time and time again to be the best way to get a good price on your new car without having to deal with a car dealer. Here’s what you need to know about these private car auctions, how they work, and how you can benefit.

Dealer Auctions are the Key to Finding Cheap New Cars

The Manufacturer’s Standard Retail Price (MSRP) listed on the sticker of a car is more of a guideline than anything else. Car salesmen will use this MRSP as a starting-off point before trying to encourage you to get premium packages and to pay for additional services like title fees in order to inflate the overall price of the car – and by extension their commission – while savvy car buyers will haggle against a salesman in an attempt to drive the price down under that MSRP. However, this isn’t even close to what the dealer paid for the vehicle in the first place – especially if the car was bought at auction.

Dealer auctions are private events that only someone with a dealer’s license can attend and bid. The prices for these cars are far under MSRP, as they are priced at wholesale, which can be anywhere from 40 percent to 60 percent below MSRP. Car dealers then bid on and purchase these wholesale-priced cars before jacking up the price to turn a profit. However, you can cut out the middle man by buying directly from a wholesale auction.

How to Get Into a Dealer Auction

Since these auctions are private and reserved for car industry insiders, it can be difficult to get in. However, dealers can be accompanied by employees that can ostensibly act as “drivers” to bring any cars home that are won at auction. If you have a personal connection with someone with a dealer’s license, like a friend or a family member that owns their own auto body shop and resells refurbished vehicles, you can ask to be taken along. You can then provide your own money to your friend or relative to bid on cars for you.

If you don’t know anyone in the industry, there is another way. Thanks to the popularity of the Internet, many private dealer auctions also allow individuals to participate in bidding online. While you still need a dealer’s license to get into their auction websites, there are many different third-party proxy bidding companies that maintain dealer licenses of their own and that will let you bid through them. These third party bidders will charge you a small fee for the privilege, but with new cars at auction already priced so low you’re still coming out far ahead of the game.

Of course, you can’t personally drive back a car that you win online. In this case, proxy companies will transport your new vehicle to your address, either as a service included in the fee or for an additional charge. In many situations, you might even be able to get your car imported to a foreign country if you’re living overseas. All you’ll need to do is to pick up the cost of the import duties and any other taxes as well as the shipping fees. These will be even higher, as transporting a car overseas isn’t cheap, but you won’t have to worry about making arrangements at the port to pass through customs, as your proxy bidding company can usually handle that for you without a problem.

Explore our Vehicle Auctions, as well as finding more information about How These Auctions Work.

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