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Buying a Brand New Car at Auction 

By Mike Richards Updated: 08/17/2022 Posted: 10/16/2015

Online car auctions are a unique place. When you look one up on the Internet, the first thing you will notice is that there are different categories of cars. You will see used and salvage vehicles. Then you will see new cars.

If you are an individual and you would like to buy cheap cars online, then you can buy used or salvage because they are legally available to anyone. As long as the auction is open to the public, then you could bid on these vehicles and get a very good deal.

The new car category is different. With these vehicles, individuals bidding for new cars at auctions must have a car dealer license. This is required by law throughout the United States, so it doesn’t matter what state you live in.


Why Buy at Auction?

This gives you a quick and easy way to access new cars while getting better prices. Normally, a dealer has to build their inventory by buying cars and paying for them at full dealer price. Auctions often offer deep discounts even on new cars. There are actually also advantages to buying through auto online auctions too.

When you buy online, you take away a great deal of the stress and pressure associated with live auctions. If you walk into a live auction, it can get very frantic very quickly. As a result, you may miss out on cars you wanted to buy, overbid because you feel pressured to do so, and deal with a great deal of stress just trying to get through it. An online auction is much more laid back than this.

You will be able to access the full inventory of new cars available for bids. Then, you can bid on multiple vehicles at a time, keep up with your bidding, and really take the time to decide how much you want to pay on which vehicles. And you can do all of this from your computer. It is much, much less stressful.

People buy cars through auction regularly. In fact, dealerships use this as a way to build their inventory since it can cost so much less.


How to Become a Dealer

Becoming a licensed car dealer will allow you to buy new cars at online auctions. However, this only makes sense if you actually want to run a business. If you are interested in becoming a new car dealer, then you will have to go through some steps.

Every state has different rules and regulations on how to do this, so you will need to check with your state’s Department of Motor Vehicles or Department of Revenue. Some of the things you can expect to need to do include:

  • You will have to establish a place of business and apply for business licenses, tax identification, etc. You may have to provide pictures of the business along with contact information.
  • Set up a franchise agreement and show proof of it.
  • You will need to fill out applications and pay proper fees.

Depending on the state, you may have to take classes as well as a licensing exam, and you will often need to obtain a surety bond that can vary in price depending on what type of dealership you are opening.

Since you will be selling new cars that you would be buying through auction, almost every state requires that you have a proof of a franchise. That’s because you will be selling one type of new car and you need to show which maker you are working with.

Remember that, to get a dealer’s license, you do need to have an established business first.

So, before you do anything else, you will need to get your business license, find a place for your establishment, and set up tax codes and every needed actions in order to legally run a business in your state.

It is absolutely vital that you follow the strictly so that you can get the proper dealership licensing. Then, you can begin buying cars at auction.


How Individuals Can Buy at Auction

You will need to think very carefully about what type of vehicle you want to buy at auction. If you are just buying something for yourself and you want to save money, then consider used or salvaged cars. Both of these can save you a great deal of money. If you really want a new car or you are starting a dealership business, then you will need to get a dealer’s license.

There are, however, ways of getting new cars at auction without holding a dealer license yourself. The secret is to have someone else, a licensed dealer, doing the bid for you. If you have a friend or family member who is a licensed dealer, you can ask him or her to do the bidding on your behalf.

Another way of getting a car at a dealer’s auction without having to get a dealer license is by using proxy bidding companies. These are companies that, for a fee, will guide you through the process of buying a new car at certain auctions and place bids on your behalf. They can also take care of shipping your brand new car to you.

Find information on Rebuilt Title Laws for Each US State. Explore our Vehicle Auctions, as well as finding more information about How These Auctions Work.