Physical vs. Online Dealer Auctions: What’s the Difference?

By Mike Richards Updated: 12/04/2018 Posted: 09/04/2017

When it comes to buying used cars for wholesale prices, dealers generally turn to two options: physical dealer auctions, and online auctions. Online car auctions are becoming more and more popular, but many dealers still prefer the physical environment of the auction lot. Why is that, and which should you choose? Let’s take a look at some of the differences.

Physical Dealer Auctions

Many dealers go to physical auctions simply because it’s what they know. They got into selling cars because they are a “people person”, and they like being able to speak face-to-face with sellers and auctioneers. The key advantages of going to a physical auction are that you can actually inspect a car in person before you buy and that the auction is not as easy to gain entry to as an online auction – theoretically making the competition smaller.

However, there are also several downsides to physical dealer auctions. With deals being auctioned off very fast, it’s easy to overspend your budget – especially if you tend to get caught up in the energy of the auction lot. It’s also harder to weed out ghost bidders and other scams in a very crowded dealer auction.

Online Dealer Auctions

Shopping for used wholesale cars online is much easier through an auction site. Those who prefer physical auctions argue that it’s impossible to know if you are buying a good deal when you can’t see the car yourself. They also make a good point that it takes longer to get your purchase, because it has to be shipped to you instead of you driving it back to your lot right then and there.

That being said, there are plenty of great things about online auctions. You can easily set your maximum bid and forget about it, not letting any “heat of the moment” decisions break the bank. You can also find much better deals on cars that you would never have been able to bid on otherwise, because they are located across the country or even out of the country. Online auction sites are much more able to weed out scams, and with no auctioneer looking for their cut, you’ll be able to get better deals on cars overall.

Which Is Right for YOU?

If you thrive on the experience of a live dealer auction, there’s probably nothing that will change your mind. But consider this:

Online bidding also offers anonymity and convenience. You don’t have to worry about hiding your bids from sharp-eyed competitors looking to steal away your deals, and you can do it at the time and place that works for you. Shop for used cars in your pajamas at midnight, or on your lunch break in between selling your latest acquisitions. With the always increasing value of vehicle history reports, it’s becoming easier than ever before to ensure that you buy quality vehicles when shopping online dealer auctions.