How to articles

How to Handle Ghost Bidding at Car Dealer Auctions

By Mike Richards Updated: 05/22/2019 Posted: 06/29/2017

Have you ever been to a car dealer auction where you just couldn’t get a good deal? Maybe every time you placed a bid, you were driven up, till your budget was blown and you had to back down. In most cases, this is just the result of a very competitive market, filled with lots of newcomers who don’t always know when to call the bidding quits.

But in some cases, even at online car dealer auctions, a practice called ghost bidding can be what’s making you spend your cash.

What Is Ghost Bidding?

Basically, ghost bidding is another way to say “fake bidding”, and it’s a shady practice that no auctioneer is going to admit to. The auctioneer will create a fake bidder, one who does not exist, in a crowded area. As you bid, the auctioneer will point to the “other bidder”, who keeps outbidding you until the auctioneer deems the price high enough, or you stop bidding.

There’s a similar system that doesn’t involve the auctioneer (instead, the vehicle rep keeps the ghost bidder in the game), and of course, it’s just as easy to do online with a bidding bot. What it all boils down to is that someone is getting paid to make you spend more money at car dealer auctions by creating competition that does not exist.

What Can You Do?

If you are at a car dealer auction in person, the best way to avoid ghost bidding is to position yourself in such a way that you can see the crowd. Granted, most auto buyers don’t jump up and down when they are bidding. But you should at least be able to tell if the auctioneer is even pointing in the direction of real activity.

Whether you are in person or joining in an online car dealer auction, stop bidding if you suspect ghost bidding is going on. First of all, there’s no way to win against a ghost bidder. They don’t care about the car or its resale value; their only goal is to force you to spend more than you should.

Second, think about it: there’s no way that a person whose goal is just to make a quick buck is going to end up actually taking possession of all the cars they ghost bid on. Most of the time, they’ll No Sale the vehicle, and you’ll be able to pick it up for your last sensible bid.

Online Auctions Get Smarter

The practice of ghost bidding is another great reason why online car dealer auctions should be your go-to. Websites have feedback systems and aggressive tracking that helps weed these bidders and bots out much faster than an auction lot can in person. If you have experienced problems with ghost bidding in the past, you may want to consider switching totally to online car dealer auctions.