Does anyone know a good guy to use to buy Used Cars from auto auctions? Manheim?

EarlyPorsche · 05-24-2010, 07:14 PM

My father is thinking about purchasing a used car and basically I will be doing the selection and purchasing for him. I was wondering if anyone has any recommendations of an auction buyer/wholesaler that also sells to the public. I would need the person to be east coast and work around the MD/VA/DC/PA region auctions. I know its a huge long shot but let me know if you have dealt with anyone...I would be too afraid of using a sketchy guy I randomly find without a recommendation.

jpachard · 05-24-2010, 07:17 PM

I know Phil Cracco goes to the auction, he has a business called Wiessach ******** in Oxford, CT. Super guy and might be able to help but I can't speak for him if he offers this kind of service.

Cheers, James

McLovin · 05-25-2010, 09:30 AM

Nothing wrong with doing it that way, but these days there isn't a huge price difference between Manheim auction prices, and the prices you can buy cars for by just opening the paper, craigslist, etc. I.e., there isn't a big difference between Manheim auction wholesale, and "low private party retail" resale.

Dealers still need to go to auctions because they need to buy large numbers of cars per year, so they can't spend a lot of time buying cars one at a time from the paper.

The margin between manheim auction prices and retail sales prices is very low these days, esp. if you are a careful buyer and spend some time looking around.

Also, an advantage to buying a used car yourself if you can actually check it out, drive it, meet the owner, do some due diligence before you buy it.

Rich76_911s · Rich76_911s's Garage

I have an uncle that goes to the Manheim auctions around Philly every week, and I also know of another guy who would be happy to help you out also in the philadelphia area. Shoot me a PM and I can get the ball rolling with either of them if you'd like.

Rich

EarlyPorsche · 05-25-2010, 10:02 AM

Thanks for your help, guys. It seems like a tough world in the used car market. No matter what I find the guy thinks he has gold. I try and explain that even if they paid sticker price that the used model they want to sell should have still depreciated more than 20%. Of course when you go to trade in a used car they tell you that its a tough market to sell them in and when you go to buy they say the vehicles are flying like hot cakes.

TerryBPP · 05-25-2010, 10:16 AM

Manheim is ridiculous right now, went on Tuesday and cars where going for $4k over xtra clean book. Funny enough, not a single dealer understands why, even the wholesalers selling them. The demand is high but we are going into summer so everyone should be cutting back a bit.

Sounds like another bubble may burst like the real estate boom. Very very similar.

Anyway, we have been buying cars directly from private party or on ebay. NO AUCTIONS! Ebay prices are actually less than Manheim.

kaisen · 05-25-2010, 10:24 AM

I can help out if you'd like

Manheim and Adesa ARE the wholesale market, dealer's just get upset when they drive the wholesale market UP, yet keep retail values the same. It's like the cars on a train, they push and pull all along. It's only been happening for decades. I've been in the industry (in several forms) for almost 20 years.

Anyway, it really depends on WHAT type of vehicle your father wants. Same-year rental returns and 2-4 yr old lease returns are much, much cheaper through Manheim/Adesa than they are on the street because the greatest supply is being sold through the auctions. The 'hard-to-find', or 'short-supply' units are going to be expensive. That's the way any marketplace moves.

Let me know what data would help your process

E

TerryBPP · 05-25-2010, 11:07 AM

kasien, Challenge! Give me an example of a car that is cheaper at auction than I can ebay or private party right now.

Not to mention your average auction car needs $1000 more recon than a private party or wholesale vehicle.

I just went to a Mercedes lease turn in sale and everyone of the 600 cars was out of the book, lol.

m21sniper · 05-25-2010, 11:13 AM

Quote:

Originally Posted by EarlyPorsche

My father is thinking about purchasing a used car and basically I will be doing the selection and purchasing for him. I was wondering if anyone has any recommendations of an auction buyer/wholesaler that also sells to the public. I would need the person to be east coast and work around the MD/VA/DC/PA region auctions. I know its a huge long shot but let me know if you have dealt with anyone...I would be too afraid of using a sketchy guy I randomly find without a recommendation.

I have a guy my old man has been using for 10+ years.

Shoot me a PM.

McLovin · 11:33 AM

Quote:

Originally Posted by TerryBPP

kasien, Challenge! Give me an example of a car that is cheaper at auction than I can ebay or private party right now.

Not to mention your average auction car needs $1000 more recon than a private party or wholesale vehicle.

I just went to a Mercedes lease turn in sale and everyone of the 600 cars was out of the book, lol.

I agree with you. I don't know what all those maniacs who are bidding the cars up do with them. A couple years ago, I know a lot of them were being sent overseas, including to Russia and other parts of Europe, where apparently the US cost was of little importance. Seemed like 90% of the people at the auction were either eastern European or Asian.

Other times you'd have big franchise dealers that apparently needed inventory and would send buyers to just buy whatever they were looking for, seemingly regardless of the cost. (The guy doing the buying isn't spending his own money, doesn't really care, just needs to come back with some cars).

Anyways, I agree with you. I think going to Manheim is fine, if you can get in yourself and take a look, and whoever is doing this for you doesn't charge anything. But if you can't see the car personally before buying, and even if you have to pay $500-$1000 for the service, I'd rather take my chances on eBay, Clist or Autotrader in buying a used car. There just aren't any "smokin' deals" to be had at Manheim anymore, at best the prices there are low retail. (Often they are higher than retail!)

kaisen · 05-25-2010, 01:17 PM

"Smokin' deals" are all relative. If you're measuring them by the book, you're an amateur. Neither the wholesale nor retail markets are driven by the book value, it's the other way around. Just because the book says a car is worth $12K, does a retail buyer pay $12K? Nope. Then why should a wholesale buyer? The market bears what the market bears. When it's on the downturn, both wholesale and retail buyers rejoice that they bought something "back of book". Everyone's a hero when the market is falling. When it's on the upswing, the rookie buyers complain that prices are crazy, out of the book, that you can't make any money at these prices, blah, blah. The books take time to adjust to market movements, up or down.

The auction helps large fleets liquidate their holdings. Those cars are ONLY sold through the auctions. You can't knock on Lexus Financial's door and buy a lease-return RX350. For those units, sold in high volumes where supply out-strips demand, the prices are typically better at auction than any other outlet. Do you think there a whole bunch of private parties looking to dump their two year old RX350 for half what they were new? Would they even trade them in? How about same-model-year rental returns? Yep, there are all sorts of private parties selling them when they're 8 months old.

And you're right, eBay is cheaper. And dealers like to sell stuff there because it doesn't being as much. Smart business model. Think about it. Most of this sentence should be in green.

There are always exceptions, even blind squirrels can find a nut here and there.

Think on a broader scale, not a little niche, and your 85th percentile dealer inventory is cheapest acquired through auction. Terry's new dealership doesn't deal in the type of inventory that is cheap at auction. But your local Chevrolet or BMW dealer does.

That's precisely why I asked to OP what they were looking for. Want a 1988 BMW M6? Forget the auction. Want a 2008 BMW 3 series? The auction is the best place to look.

YMMV

McLovin · 05-25-2010, 01:31 PM

I agree that the values in any "book" are pretty useless. The market is too sensitive, and the margins are too thin, to rely on any book. If you are buying a car at auction for retail resale, you need to know what that car is going to sell for, this week.

But, I still say that if you are looking for, say, an '07- '08 3 series, you can find one in the paper or on eBay for around the same price as Manheim these days. Can you maybe get one for a little less at Manheim? Sure, sometimes yes, sometimes no.

My main point is that Manheim prices are not what most "outsiders" think. The spread between "Manheim wholesale" and "real world retail" is pretty small. Yes, there generally is still a spread. It's just a lot smaller than most people think.

There's nothing wrong with Manheim, and if you have access (without having to pay someone a fee), it is a good way to get a good car at "low retail." But with a little effort, it's not hard to duplicate that price in the retail market, or at least come very close, and there are advantages to buying outside of an auction.

TerryBPP · 05-25-2010, 01:59 PM

Kaisen, completely understand what you are saying. Let me rephrase......the auction values are so close to retail sale figures you can't make a decent profit. If you compare recent retail sales of local dealerships to the auction prices the sales have such a small margin they are insane.

I have looked up car that dealers have advertised locally and the margin is $2k over what they paid. Seems crazy to me. I'm guessing they are in a panic to fill the winter sold inventory.

FYI, my current employer has been selling euros and exotics for 20 years. Last year had $23 million in sales. Not bad for a independent in a recession.

LeeH · 05-25-2010, 02:42 PM

Quote:

Originally Posted by TerryBPP

Manheim is ridiculous right now, went on Tuesday and cars where going for $4k over xtra clean book. Funny enough, not a single dealer understands why, even the wholesalers selling them. The demand is high but we are going into summer so everyone should be cutting back a bit.

Sounds like another bubble may burst like the real estate boom. Very very similar.

Anyway, we have been buying cars directly from private party or on ebay. NO AUCTIONS! Ebay prices are actually less than Manheim.

I had a wholesale license for a couple of years. I made about as much buying from private parties and selling at auction as I did buying at auction and reselling. I'd go to the auction with a price ceiling in mind for a variety of cars. Without fail they'd get bid hundreds or thousands of dollars above my high price. It really didn't make any sense.

I'd just hang out on Craigslist until you find what you're looking for. At least you can really check out a car from a private party.