Buying from a small dealer that sells auctioned cars

Hi all, I recently went to a dealer to check out a used Audi TT with less than 30K miles. It is a manual Quattro 4-Cylinder. The Carfax history showed it was puchased by this dealer at auction. Now, the reason I went to check it out was because it was listed for sale for less than a month but the dealer already reduced the asking price by $1,000 and the asking price now is close to what edmunds showed as Trade-In price. The dealer claimed the car still has factory warranty until 2009, so I am very tempted to pull the trigger. However, I am suspicious about why the price being on the low end. The only problem I experienced during my test drive is that the car’s shift nob is missing, so i am really test driving this thing with a metal rod as the stick. In my experience and form what I heard, auctioned cars usually have some issues because my previous vehicle was also purchased from a dealer that bought their cars from auctions. My previous vehicle had a broken stereo system and had a modified exhaust pipe, so I got it quite close to trade-in price as well. since this Audi TT is an auction car, but I can’t spot any problem visually or from test driving, what else shoud I look for and what I should consider before I pull out my wallet to purchase the car? Thanks.

A factory may finance a new lot car for almost nothing, but a used car is expensive to keep on the lot for a month. It has taken up space that could have been used for 2 or 3 sales.

Sorry, can’t tell you what is wrong with the car from here.

I can’t predict what will break either; I can’t even predict what will break on my own car.

Auction prices are even lower than KBB or NADA trade values so it is possible that the dealer is making a little money retailing at the trade value.

I am of the opinion that German electronics are not as good as US or Japanese electronics in motor vehicles.


Auction prices are even lower than KBB or NADA trade values…

They certainly are. The last time I bought a car retail was 1975. Since then they have been auction vehicles and everyone has gone over 100K. Once you have done it, you can never go back to the guys in plaid suits. I can’t believe what people say they pay for cars. At that price they will make plenty off you.

Ahem, I attended a single automobile auction in Albuquerque, NM back in 1993, so I am pretty much an expert. (I mention the word Albuquerque as often as I can so that I can remember how to spell it). This auction was attended by dealers and the public. I watched the dealers inspect cars that were of interest. Since there is no opportunity to test drive, those in the know do what they can; start the engine, put it in gear, turn the steeering wheel lock-to-lock, try the electronics, AC, heater, look for unusual wear, look at tires, spare, jack, and inspect the body. All-in-all a five or ten minute once-over.

At this auction, most of the cars went for more than any “book” claimed they were worth, so I, and the dealers, drove home with nothing but fat wallets.

All of this leads me to say that pricing of anything - cars, homes, consumer goods - is very often bogus. So, reducing a bogus price isn’t necessarily a true reduction.

As one comment mentioned, do your homework at Edmunds, at CarFax, and do due diligence in inspecting the car. If anything is out of whack, run. I say this because all industries have people who have mastered the art of deception - VINs are “washed” so that you might buy a previously flooded car which looks good on paper but offers up a clue of deceit. I work in real estate and endlessly hear things such as “They just reduced the price by $50,000 - what a bargain!” But in truth the property was overpriced by $100,000… so no bargain here.

The Audi TT may be a great car at a good price, but take the right steps before committing. For one, make sure the VIN is real, verify the warranty with Audi, and find out what is under warranty. If it is an extended warranty, make damn sure the company is still in business.

Have fun/

Automobile auctions are a normal way for used car dealers to buy their car stock. There is a very large auction house near me with two lanes: dealer only, and everybody. Most auctioned cars are sold to dealers. The source could be trade-ins a new car dealer does not care to sell on his own lot, off-lease cars, and repossessed cars. It might just be the wrong time of year for a TT. Even though it is on a dealer’s lot, you might want to get it checked by another mechanic. Check with Audi concerning the warranty, or read the owner’s manual material in the glove box. There night be a warranty until 2009, but I doubt that it is all-inclusive.

BTW, what model year is the Audi?

You know, maybe I’m going to get some disagreement on this, but let me ask this: how did you test drive the car? Just around the block, or…? I think the best way to judge a car and help “boil” its problems to the surface is to get it warm, then take it to the freeway and beat the living daylights out of it. Haul butt down the on ramp, get up to speed, do a couple of really hard accelerations from 65, and then bring it back in to town, drive it around, park it back at the dealer, and BS with the sales person for a while.

THEN, look under the car and see how much oil/coolant/power steering fluid it’s leaked since you parked it. If it lives through a minor beating without making new noises or leaking a lot of fluid, then I think you are at least a little bit ahead of the odds game.

I think the history of the vehicle is more important than how it got on the lot. There are a lot of flood recovery vehicles out there that have been cleaned up. You want to know the history of the past 30K not how it was purchased. Was it bought new and traded, lease, etc. If it has a factory warrenty, it has a dealer service record and history.

Thanks for sharing of your auction experience. I agreed that I have no idea how much the dealers bought the TT for, so even if they mark down $1K every month, they might be still making plenty of bucks.I have check with Audi with the VIN before I buy.

I did pull the carfax, the history showed it was owned as a a personal vehicle (not leased) until last year then it was sold at an auction.

People usually do not auction their own cars. Was it traded in and then auctioned?

Almost all used cars dealers obtain most of their cars at auctions. The cars come to the auctions from a variety of sources. Most late model cars come from leasing/finance companies and are cars that were on 2 or 3 year leases. Many others are cars that people just got bored with and traded them early, pretty common with sports cars like the TT. Many large new car dealers and dealer groups have very strict inventory control systems and automatically wholesale cars after they’ve been on their lot 60 days. These cars usually have nothing wrong with them other than the right buyer didn’t find them during that time period.
A lot of cars are indeed in rough shape, these are cars that were traded in with damage or abuse or with mileage too high to warrant the risk of the dealer selling it at retail and exposing himself to used car lemon laws. As someone who makes his living buying cars at auctions, I can say that you have no greater risk of buying a stinker there than you do from a private party. Have any car checked out thoroughly as several others have suggested, regardless of how it made its way to the person selling it.

Anything wrong with a car is a reason not to buy one. Sometimes the auctioned cars haven’t had any maintenance done or have been abused in some way. If you are rich enough or can take large risks, it will be alright. Where is the nearest Audi dealer? Make sure it’s not 80 miles away. Other than the obvious; see if you like the tail lights. Some Audi’s look like there is a light out but there are only three back there.

Buying any used vehicle is a crap shoot. Any used vehicle should have a thorough inspection done prior to purchase.
A vehicle can be a very good one or it could have been sent to auction for a reason.
An Audi TT with less than 30k miles that was sent to auction would mean that the dealer got tired of it sitting around on the lot without a buyer and since cash flow is critical, decided to just unload it at auction. Another possibility could be that the vehicle may have been a flood car, been involved in a serious wreck, etc.

CarFax should never be taken as the final authority on a vehicle’s condition or history. CF is frequently incomplete or flat wrong. CF has done a good job of marketing themselves though by convincing, with the help of car dealers, that a clean CF report means the vehicle is in A-One condition.

How long has this dealer where you are looking at the Audi TT been in business? We have one used car dealer in my city that has been a family business since the 1920’s. I purchased a car from this dealer and took it to my independent shop before the purchase. The mechanic looked it over and said it was in great shape. He then asked what dealer had the car. When I told him, he said “You don’t have anything to worry about–this dealer does not sell junk”. The car turned out to be very good. A dealer who has been around for a while has been there for a reason. I would check the reputation of this dealer as well as the car.