The car business can be a pain for three distinct reasons.
The first comes from the cars that you sell. Botched repairs. Unhappy customers. Surprises that just seem to spring up and bite you in the ass. I can deal with that.
The second comes from people in the industry. Employees and contractors with productivity issues. The unending myriad of regulations and paperwork. Continuing ed classes with little relevance to reality. I can deal with that too.
What I can’t deal with is…
Within 50 feet of getting out of my old 74 Chevy C10 I hear a familiar voice.
“Hey Steve. How are ya?”
A 6 foot 7 inch monstrosity of a man pats me hard on the back and dislodges the few cobwebs that remained from a 5 AM wake-up call.
Editor’s Note: This is the second part of the series. The first can be found here.
“I wouldn’t buy a car at an auction. They’re all junk!”
Bad transmissions. Blown engines. Cars that smoke, drink and hang out with the bad boys thanks to all different types of leaks and spewage. This is the general stereotype that most uninformed consumers have of those cars at an auction.
Most folks look at auction cars as vehicles that are worth more dead than alive. Every malady and defect is assigned to these ‘red light’ vehicles that are sold as/is with no warranty.
But do you know what is the #1 issue of those auctioned off trade-ins here in the Atlanta area?
There comes a time when the prices for used cars at the auto auctions go the way of an exuberant bubble.
A small army of consumers get their tax refunds. The car lots wake up from their winter slumber, and values for vehicles go the netheregions of the human imagination.
I sell cars during this time, not buy them. In the last three months of every year I will usually buy a lot to avoid the tax time market prices. Sometimes as many as 12 vehicles in a day. But when tax season comes, I buy a chosen few and sell them by the dozen.
Then, after the buying frenzy begins to ever slowly ebb, there will be a welcome break in those hedonistic valuations. Where instead of winding up $1000 to $1500 behind the selling price, I wind up second to another bidder. Almost always to a guy who has been buying cars for a long time. Today was that day.
Some things in life are just plain goofy when you start thinking about them a good bit.
Consider the lyrics to the Lynyrd Skynyrd anthem”Sweet Home Alabama”, coupled with Forrest Gump dancing with his childhood love.
Or Born In The USA as a song frequently used to further political candidates. When the lyrics point straight at the constant screwing of the common man by the powers that be.
Finally we have the Honda Accord. A car renowned for quality, and yet, enthusiasts bitch about it more and more with every succeeding generation.
When you have 120 dealers looking at the same exact car on a Monday morning, you have three options if you plan on buying a car.
After I saw a 2003 Infiniti FX35 with 220,558 miles sell for $9100 plus the auction fee, I left for good.
In the olden days known as the late 20th century, an ancient artifact called a “newspaper” would be dropped by your front door.
Inside this mostly unrecycled piece of pulp was an automotive ”Classified” section. In better times, this magical list of thousands of vehicles would have offered car buyers an incurably acute case of acronymitis. “1994 Camry, ps, pw, a/c, auto, abs, 1 ownr! $5500 Ph#…”. A short three line list of minimalist communicado would have cost the seller about $50.00 and given them a secondary presence in a newspaper section that made millions for major publishers.
There was only one saving grace if you wanted to find cars for sale that offered big print, big pictures and big discounts. The new car advertising section… and there were two reasons for that.
The bidding kept going down and down at the inop auction. A sale where all cars are usually either dead or dying.
“$200! would-a-give-me $200! $100! $100! How about-a-hundred!”
Pretty soon the bidding went all the way down to $50. For a whole car! No takers. No sale. Until…
Six years ago I managed to make a $2000 profit on a car without it ever leaving the auction.
A few winks to the auctioneer. A few clicks on a digital camera. A few paragraphs on Ebay. Done. I had managed to purchase and remarket a 2001 Toyota Prius in mint condition with 113k miles. It was near factory clean inside and out. A spanking new hybrid battery. Brand new Michelin low resistance tires, and a maintenance history that showed it had been dealer maintained since day one.
In the car business we refer to these opportunities as an automatic slam dunk.