Who doesn’t dream of getting behind the wheel of a brand new car? Unfortunately, new cars seem to be getting more and more expensive. It seems like you have to finance even used cars these days, and paying for a new car in cash seems to have become increasingly less common.
Getting a Dealership License to Buy New Cars at Auction
Your first option when it comes to buying new cars at auction is to become a car dealer. This is a very serious, time-consuming, and potentially costly move, but it’s worth it for people who want to buy cars at great prices and then sell them for a profit.
Every state has different rules and requirements for becoming a car dealer (not to be confused with the requirements for getting a salesperson’s license), but they all require a few things:
- A physical business address
- Tax ID(s) for the dealership
- Insurance certificates for purchased vehicles
- Valid business license
Many states also require you to take a class and/or schedule a dealership licensing exam, and many of the steps involved in getting your license are labor-intensive and time-consuming. However, if you want to sell cars and make great profits on them, this is the way to go, and you can find out about the requirements for where you live by going to the DMV’s Dealers & Auto Industry site and clicking on your state.
Finding a Dealer to Bid for You
Of course, if you’re only planning on buying a single car at a time and you aren’t going to be selling them as a business, all that work and all of those fees will most likely cancel out your savings. However, that doesn’t mean that you can’t take advantage of the low prices at car auctions.
If you can find a company who has a dealer’s license and that will bid on a car for you, they can pass the savings along to you. Of course, you’ll have to agree to pay a fee to the dealer you work with. You will then set a maximum bid, and they will not bid above your limit.
Buying Salvage Cars at Auction
Anyone can buy a salvage car at auction. These cars are often priced much lower than new and used cars, and you’ll only have to pay for their repairs and any fees associated with getting your car re-titled.
Unfortunately, it can be hard to tell how much you’ll spend in repairing the vehicles. And, even if you perfectly restore a salvage car, there’s no guarantee that you’ll be able to find an insurance company that will be willing to give you fully comprehensive coverage on it.
Insurance companies don’t like insuring previously salvaged cars, and even when you get your car’s new title, it will still bear a stamp that shows that it was salvaged at one point. And, no matter how much work you put into it, that designation is going to hit your car’s resale value hard if you decide to sell it and buy a new car.
All in all, finding a good dealer to bid for you on online car auctions is one of the best ways to get a great deal, especially if you aren’t ready to put a lot of work into a car you just bought.