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Car Auction Wholesale Lot

How to Spot Ghost Bidders and What Can Be Done About Them?

Maybe you have not heard of the term Ghost bidders before. It is a phantom bidder that unscrupulous auctioneers use to bid against you at a used car auction. Learn how to spot them and how to take advantage of the ghost bidder problem.

Fake, AKA. Ghost bidding is not condoned by any auction association because it is a shady way to increase bids, but it does happen from time to time. Sometimes even the person rep-ing the car is the person tricking the auctioneer into thinking there is a bidder.

In this short video I explain the problem and have a few suggestions as to how to deal with it.

 

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Car Auction Retail Car Lot Wholesale Lot

10 Sites You Shouldn’t Ignore when Sourcing Used Cars

Used Car DealerIf you have been in the car business for any length of time you have faced the dilemma of how to buy used cars. Do I go to auctions? Do I visit private dealers? At Auction Simplified we think you need to be always looking for cars and visiting every venue.

 

hemmings

10. Hemmings

This site is often overlooked by car dealers because they cater mostly to Collectors. But sometimes there are gems hidden in the listings from people that consider their cars to be collectable. Used Mustangs for example or even that oddity you need to fill a customer order. Additionally, if you need old parts, Hemmings is the place to start. To buy used cars from Hemmings, go to www.hemmings.com

bring a trailer

9. Bring a Trailer

If you’re looking for something cool and old, from a rusty Pinto project cars to perfectly restored Camaro, Bring a Trailer is where you want to go. To quote their site; “There is no need to keep sifting through hundreds of hopeless projects or overpriced dealer inventories to find that one car you’ve been looking for. We pick the winners and save you the trouble… the best bargains, the best dream cars, and the best rarities.” To buy used cars from Bring a Trailer, go to bringatrailer.com

autotrader logo8 AutoTrader.com

One thing that is great about AutoTrader is that you can search the nation in a second. So if you are looking for that hard to find specific car, AT is your best bet. Links to Carfax and Kelly Blue Book straight from the site are all plusses. Not everyone likes AutoTrader because of its heavy advertising and because their listings tend to attract people who severely overvalue their cars. However, AutoTrader does have an excellent search function, letting you make searches for things like “manual transmission + two wheel drive + four cylinder engine” and gives you a variety of similar cars across different years and makes.  To buy used cars from AutoTrader go to www.autotrader.com

auto tempest7. AutoTempest

It’s great because it allows you to shop all the major used car sites at once. It’s like those cross-shopping flight search sites, but for cars. To buy used cars from AutoTempest go to AutoTempest.com

carfax logo6. Carfax

Most buyers don’t realize that Carfax has a rather robust used car listing filled with great inventory, much of it wholesale. This is because many dealers have opted to pay flat rate for Carfax and they allow the cars to show up as an additional service. You get the added bonus of a free Carfax report, cool huh? To buy used cars from Carfax, go to www.carfax.com/cars-for-sale

kijiji5. (Canada Only) kijiji.ca

Even if you live in the US there are ways to get cars across the border, so I threw this one in for our US dealers. Canadian dealers have been using Kijiji.ca for years. Great cars for sale and a good user interface makes it like Craigslist but better. It’s also owned by eBay. By the way Kijiji means “village” in Swahili. To buy used cars from KiJiJi go to www.kijiji.ca

4. Auction Simplified

I also recommend our own wholesale marketplace, Auction Simplified (shameless plug) because it is free for sellers to use and the buy fee is so small. It offers a turnkey “Make and Offer” style buy center that feeds from their existing inventory software. More and more dealers are using the platform to buy and sell used cars.  Go to AuctionSimplified.com and register.

Cars.com-Logo3. Cars.com

Similar to Autotrader but with less of the commercialism, cars.com is great especially on their mobile app. Cars.com has a clear user interface and  a great search function. Because of their lower cost as compared to AT they attract more independent car dealers and small used car lots, so they will often have almost all the cars in a particular town listed. They also allow for national search which is really helpful when looking for a bargain if you are not afraid to travel. To buy used cars from Cars go to www.cars.com

eBay-Motors-Logo-no-border2. Ebay motors

It harder to find a great deal yourself because of the national exposure, but eBay Motors is generally more reliable and easier to deal with than Craigslist. It’s also good when you already know what you want, and if you’re looking for something very specific. To buy used cars from eBay, go to www.eBaymotors.com

Use a robot bidding tool like bidnapper.com as it can really make a difference in winning the bid because it bids hyper fast on your behalf at the end.
Kevin Leigh, Dealer Simplified
Kevin Leigh

craigslist-logo-transparent1. CraigsList

You get some weird crap thrown in, so be careful not to surf craigslist while kids are around, but nothing can beat Craigslist when it comes to local listings. The search function is not the most specific, alright it actually stinks, but their are mobile apps that make things a lot easier. To buy used cars from Craigs List, go to www.craigslist.com

The trick with CL is to looks a lot further down the page, because you may not realize that it is actually a chronological list and sometimes the honey is at the bottom of the pot.
Kevin Leigh, Dealer Simplified
Kevin Leigh

UPDATE 8.12.14:

Dealer Auction SoftwareNow that Auction Simplified has launched, we also recommend our software (shameless plug) for Dealers to find, buy or sell wholesale cars. Go to AuctionSimplified.com and register.

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Car Auction Retail Car Lot Wholesale Lot

Used Car Profit Hacks

When it comes to used car profit, dealers constantly consider the resale value of their inventory. Having a profitable, well maintained inventory can make a huge difference when it comes the speed in which you turn your used car lot.
Here are some simple tips on how to increase the value of your Used Car Inventory.

Wash Your CarsCleanliness Matters

Keeping your cars clean isn’t just for cosmetic appeal, it can seriously affect your cars value. As a percentage of profit improvement, a clean car has the most impact on value for the least amount of expense.
All plastic should be treated with a quality cleaner and protectant, and the carpets should be vacuumed to the point where you can actually see the lines the vacuum made. Get your detail shop a carpet rake, to really make the carpets look awesome.

Hidden garbage under the seats or in map pockets can cost you a sale. Make sure your detailers are looking everywhere and even vacuuming under the seats, trunk and map pockets.

Clean door jams make a real difference as well, have them wiped down and silicone the hinges.

Detail the engine and trunk, clean out their jams as well and be sure there are no signs of oil leaks whenever possible.

Freshen your Inventory often

cars with hoods openOne of the biggest mistakes dealers make is they don’t freshen their inventory weekly. I make it the lot person’s (porter/inventory managers) daily job. They should be flagging 2-5 cars a day to refresh.

Minor Modifications

Sometimes the smallest little details make your cars look so much better and in many cases add profit at a 2:1 ratio. When I was younger I made a living buying cheep cars with rips in the seats and dash boards. I would add seat covers and a minor patch kit for the cracks, then turn around and re-auction the car at a tremendous profit.
Simple things like spray painting the wheel wells black or silvering the end of an exhaust have amazing impact on curb appeal.

Adding Accessories

Some dealers like to add accessories, such as alarms. In my opinion the return is only equal to the value of the added item and in some cases lowers your SRP’s because it sometimes raises the price pass your competitors. Another side effect of adding the accessory in advance is you tend to give it away, instead of selling them at a profit

Minor Bodywork

Mobile paint technician’s are a used car manager’s best friend. These companies will come to your used car lot and can remove scratches and small dents without the hassle of taking your car to a repairer or body shop. They can also treat your car with an extra clear coat, giving the paint a new lease on life and providing added protection against chips and scratches.

When you have your own body shop you can fall into the trap of wanting to paint every minor dent. Dent removal without painting is the better way to go. Again its cost to profit ratio is as much a 4:1
Kevin Leigh, Dealer Simplified
Kevin Leigh

Story Book

One of the most important things you can do to increase the value of your cars is to keep a “story book” which includes such items as:

  • Printed Carfax
  • List of Work Already Preformed on the Car
  • Printed List of Reviews on the Car from Edmunds or Cars.com
  • Printed List of Standard and Added Options
  • Original Mileage statement
  • Warranties Available

Salespeople that show the storybook upfront are far more likely to get top dollar than salespeople that wait until the customer asks for the Carfax.

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Car Auction Retail Car Lot Wholesale Lot

How to Stock Used Cars Customers Want to Buy.

& How to Stock Used Cars Salespeople Will Sell!

Buying Used Cars For Your Lot is Easy:

Buying used cars is easy
Lots of Rental Cars Out There

Stocking your used car lot is easy, Right? You can load up on as many cars your lot will hold, fill every spot and you could have it done today. The auctions are loaded with all kinds of cars. Sounds pretty good right but only if you like silver, white or tan x-rentals. Just because something is easy doesn’t mean you should do it. Putting cars on your lot just to fill it up can cost you thousands of dollars. Most of us have been in this spot once or twice. So how do you stock up on cars customers want to buy and that salespeople want to sell.

The good news is that with a little hard work and a little smart work you can find the cars you need and keep them rolling in. Much like looking for cars under $10,000 you are going to need some help from your team. Now don’t get me wrong some of these cars are going to have to come from the auction. Whether you buy online or at the local sale, just make sure you look for cars you need. And don’t over pay for them at the sale, if you are going to step up for a car make sure you buy it from a customer in your showroom.

Wholesale-Used-CarsUnderstand Your Used Car Market:

Once you understand your market and the stores history you can start to build a profile of what cars you need. You never want to just go off your history, this will cause you to miss out on selling the customer what they want. If you have never sold a 2008 Toyota Camry in the past, but every customer in your market is searching for one and you follow your history how many 2008 Camry’s are you going to sell? Thats right, ZERO. History is good but you need to watch the market and look for cars customers want to buy. Again its easy to buy the cars you can buy, but that doesn’t mean the customer wants to buy them from you. Its why they are still available at the sale.

So searching for cars the customer wants to buy is half the job. The other half of stocking your lots with the right cars is pleasing your salespeople. Remember they are the ones that have to sell them. If you can’t get the salespeople on board with the cars you are putting on the lot you might as well burn your money. Some salespeople will sell any car you give them, but not everyone is that comfortable with selling used cars. Most of them will walk right around a used car if they don’t feel good about it and can sell a new one instead. You have to get them in front of every used car, this will lift their confidence and sell you more used cars.

The morning bullpen

Bull Pen Cars Lined Up
Used Car Lot Bull Pen Meeting

Now if you’re asking your self how do I get that done, you may want to try bull penning. Running a morning bullpen isn’t that hard but you can’t half-ass it. The last thing you want to do is waist the teams time with nonsense. Its best to have all the work for your bullpen done the night before. You want to have the cars you are going to show lined up, you don’t want to spend time walking the lot. Also you are going to have to do some homework on the cars, start with a list (year, make, model, miles…). If any of the cars are trades have the salesperson that worked the deal talk about the car. It’s a good idea to get them involved. This is a good time to talk about your go-to market price and to find out if the team has any interest in selling these cars.

Now you can’t let the inmates run the prison but you do need their buy in if you want to move some medal. Do your best to have good information about each car, things like service history, carfax, market data and pricing. Let the team help you weed out the bad cars and you will fill your used car lot with cars people want to buy and ones your salespeople want to sell.

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Car Auction Retail Car Lot Wholesale Lot

Should Dealer Groups Have a Centralized Buying Center? 

Centralized Buy Center

Why Centralize your Purchasing?

If you’re serious about reducing the amount of time you spend at the car auction consider a centralized buying center. Central buying or central purchasing, is the practice of relocating the authority and responsibility of a small purchasing team for individualized stores to one location for a whole group. The consolidation of the purchasing function by a large, multi-site organization into a central authority increases efficiency, inventory control, and purchasing power. Central buying is commonly used by multisite automotive retailers, to buy centrally for individual locations. This can be highly effective in controlling inventory levels and improving profitability.

Benefits of a Centralized Buying Center

Centralized buying has the benefits of consolidated purchasing power, standardization of purchases, enhanced professional purchasing skills and easier management of the buying function.

The major responsibilities of a buying center or a trade desk are;

  • Sourcing used cars for purchase both at live physical auctions as well as online.
  • Locating cars to buy from non-auction sites (craigslist, news paper, off the street…).
  • Answering trade calls from sales managers as they work deals.
  • Working with store managers to keep used inventory levels steady.
  • Working with the wholesale manager to move cars to the right locations or to the right auction.

Less Emotional Decision Making = Better Acquisition

Setting up a centralized buying center or a trade desk can make your used car departments run more efficiently. When the emotion is removed from the purchase or trade evaluation it allows the used car manager to focus on the customer, which results in more sales and a higher profit. When you are working a deal, it is easy to become wrapped up in the heat of the moment and push a trade number past the actual cash value (ACV). If the number is delivered from a trade desk or wholesale manager it is more difficult for the consumer to disagree. The same urgency to buy can arrive at the auction. If you are buying cars that you are responsible to retail, somehow you convince yourself it is okay if you pay too much. This is a bad plan if you are trying to make money. This is where the wholesale buyer or trade desk works best. They are given a cap on how much to pay per car and can quickly call back to the store if a new game plan is needed.

This practice of a centralized buying center has been working well for dealers all over the country. Most stand alone dealers will have a buyer or wholesale manager to handle their used car inventory, which does not scale well for larger groups. If you are a multi-franchise dealer group you may want to consider having at least one representative for your different brands (Ford, Chrysler, Imports, GM and High-line).

Staffing a Buy Center:

Staffing the trade desk with two or three individuals that each work with a set of stores or with a specific brand is most beneficial. This gives the buyer better product knowledge and a greater understanding of each market. The team should work together with sales managers as a part of the trade evaluation process, sharing their opinion on what every trade is worth.

Having a solid trade process and a consistent buying plan will keep your lots full of the right cars and improve the bottom line. Remember the more used cars you trade, the less time you will spend at the auction, and the more time you have to sell.