Cars from auctions


#1

Ok, I’m looking to purchase a used Infiniti, 2008 G35X. What I am finding, at one dealership in particular, is a lot of inventory coming from auctions. I have had no luck finding information on this subject online. To me, coming from an auction has a negative connotation attached. The dealer says they are coming from a closed auction and they are only purchased from auction if they meet their stringent standards, of course. Why do cars end up at auctions if they are indeed perfectly good cars? If I turn in a 3 yr old car on a lease to a dealer, and it is in good or better condition, why would they then sell that car to an auction? I’m looking for an informed opinion from somebody other than the dealers I am talking to. Thanks!


#2

Rental and fleet cars go to auctions.
Closed dealers inventory goes to auctions.
A dealer’s excess inventory goes to auction.

Once the car is in YOUR dealer’s inventory it has been given a complete servicing just like any trade in.
Watch you used car warranty closely and have them service everything you notice as soon as possible.


#3

Thanks. Is there a way to tell a rental vehicle from the carfax? Does it show up as “commercial”? I do not want a car from a rental agency, with hundreds of previous “owners” for a day who don’t care about the car.


#4

Like pretty much any product, used cars have both wholesale and retail sides of the business. Auto auctions are the wholesale side and dealerships are retail. Just because a car went through a wholesale auction does not mean it’s a bad (or good) car. As with any used car – do your research. Get the service history, check carfax and have a qualified independent mechanic perform a detailed pre-purchase inspection.


#5

I’ve been a parts man at this Ford dealer for thirty years and have never seen a Carfax printout myself. I’m unfamiliar with what information is contained therein.
We buy a good deal of our used car inventory from auctions ( to put cars on the lot ) and they come in all manners of conditions after which we service them with a fine tooth comb before selling.


#6

I would bet that dealers still trade cars with each other as well. I remember back in the early 1970’s seeing a nice 1967 AMC Ambassador on the used car lot at the Oldsmobile/Cadillac dealer. A week later, this same Ambassador was on the lot at the Rambler dealer.
I read a book written by a used car sales manager at a new car dealership. This manager combed the newspaper for cars he could buy from a private individual at a bargain price that he thought he could resell on the lot for a profit.


#7

Carfax reports are not as useful as their marketing leads you to believe.

There is also another company called Autocheck that actually has much better reports.

Either of them will tell you the ownership history including whether or not it was a lease/rental. That’s the only thing about those reports that I ever trusted b/c the most solid aspects of them are pulled from DMV records.

If you are skittish about a prior lease/rental then that pretty much puts you out of the auction car market. For the newer model cars, if it was a lease or even trade in then it most likely went to auction b/c there was more than the dealer wanted to mess with - otherwise it would most likely go to their own used lot. Aside from that, the newer ones at auction are almost certainly from the rental car companies.


#8

“Once the car is in YOUR dealer’s inventory it has been given a complete servicing just like any trade in.”

Ken–That may well be true of your dealership, and it may also be true of many others, but it is NOT a given that used cars are serviced by a dealership, prior to resale.

From reading quite a number of posts on this forum over the last few years, it is obvious that there are dealers out there that will take spend money on “detailing” in order to take care of cosmetic items, but will ignore things under the hood or underneath the car.

The most flagrant of these non-serviced vehicles was a 3 year old Jeep Grand Cherokee that quickly developed problems as a result of engine sludging. After examination by her own mechanic, the buyer was shown the original oil filter that was still in place on this 3 year old vehicle. The only thing that was “serviced” in that instance was the buyer!

For a used car buyer to assume that his potential purchase has been serviced is too much of an assumption.
As Ronald Reagan famously said, “Trust, but verify”.


#9

If you saw how many cars go through a large auto auction you’d be amazed. Most dealers buy and sell cars at auction on a regular basis.

It’s not just fleet and rental vehicles. The odds are pretty good that a given car on a dealer’s lot came from an auction. This is nothing to worry about.

When I was selling cars we bought and sold cars at auction on a weekly basis. The Acura in my garage came from an auction. It has been trouble-free for more than ten years.


#10

The Carfax lists previous owners. If it was owned by a rental agency, you have your answer.

What it doesn’t list, as I found out, is when the previous owner got a ticket a month before putting it on the market, got cited for not carrying evidence of insurance, failed to send that evidence in, and when the citation works its way through the system six months later, the DMV suspends your registration that you took out after taking ownership. (All you have to do to straighten it out is show them the documentation that the violation occurred before you became the owner; no cost to you, but it does involve schlepping down to the DMV for a non-standard transaction, so bring something to read.)


#11

I bought a SUV that the dealer acquired via auction. I think the car went to auction because it was a “smoker’s” car. I don’t smoke and the car was effectively “desmoked” as far as odor is concerned before I bought it. It had 90K on it and that meant time for a major serivce including timing belt.

I’ve done the service, put about 30K miles on it over 2 years and no problems.

Some banks maybe getting these cars via repo, or lease turn ins. Like all cars get it checked out before you buy it.


#12

Dealers sell cars at auction because they don’t think that they will sell it quickly enough on their lot. It might just be that the dealer’s usual customers don’t want an Infiniti, or that the dealer doesn’t think it is good marketing for his main like to sell used Infinitis. It’s unlikely that the G35X was a rental, but it likely could have been leased. Whether it was leased or not is not important. If the car is in excellent condition, who cares if it was leased or owned?


#13

Couple of points. Carfax as mentioned is good for ownership history and all the negatives you see. On one used car I saw a transmission overhaul documented. Accidents is another thing. If it is there I don’t bother. But I have seen a ton of cars that have accidents but a clean carfax. I also avoid out of state cars, because am always concerned about title washing or ODO fraud.
As far as avoiding rentals, that is fine with me, but I also see leases as long term rentals, may not necessarily have been maintained by the book at all.
If you are buying a CPO it is better because at least you get some warranty.

I have observed on local dealer chain. The cars show up and the last digit of the price is 1, after 2 weeks it is 2, then 3 & 4, then they disappear to auction I assume.


#14

Cars wind up at auctions for a variety of reasons.
The most common reason is that when the car comes in for trade, or lease return, the dealer it was turned in to had too many similar competing new and used cars, so didn’t want yet another one in their inventory, sitting there, collecting dust, costing them money.

Another reason would be a sports car turned in to the dealer in Michigan in the middle of the winter, during the worst part of the snow season. So they put it up for auction, and a dealer in California or Texas buys it, and sells it 2 weeks after it arrives.

Nothing wrong with auctions.
They can help move inventory to an area that has a greater need for a certain vehicle type.

BC.


#15

Thanks. Good points all. I agree with your comments on Carfax reports, they have some good information, but they can’t be relied upon entirely, the accident history being a prime example. Just because you are legally required to report accidents over a certain amount, does not mean that you do.

Not sure how to respond to the community in general, so will do so here. Thanks to all who responded. I feel better now about auction cars. And through Car Talk, I have identified a good independent mechanic in my area that will provide my 3rd party inspection when I get to that point.