By on December 21, 2011

 

I want you! To spend our national debt on a beater car!

145 vehicles. 100+ dealers. If there ever was a recipe for prices leaving the stratosphere and entering the ionosphere, it was Monday morning at Carmax.

On average Carmax makes $929 on every used car that they take in and sell to another dealer. If you take the latest quarterly profit they get from their wholesale auction operations alone ($78 million) and multiply it by four, you get over $300 million in earnings. That’s an amazing profit for what amounts to minimal reconditioning (if any) and a ‘quick flip’.

Then again, the car dealers who came to the sale were looking for the exact same thing.

Some of them found it. A good friend of mine, who I wish wasn’t such a friendly guy at that moment, bought a 1996 Chrysler New Yorker with 30,415 original miles for only $750.

What was wrong with it? The transmission ‘may’ need to be replaced (transmission needs service was announced) and the title was registered with more miles than the vehicle was showing on the odometer. However a quick look at Carfax and Autocheck revealed that the miles were indeed original.

In the end what he’ll do is have the title transacted to reflect ‘miles exempt’. This is what the Georgia DMV records as mileage for vehicles that are 10 years are older.

Then it will either be sold at a nearby dealer auction or he’ll get the transmission fixed for a retail deal. Given that the trannies are cheap ($300) and the labor cost will be around $300, I’m sure he’ll tote the note’ or perhaps sell it on Ebay.

Overall I did okay at this sale. Not great. But not terrible. My purchases were…

2000 Saab 9-5 (108k miles, Leather, $2325)

2001 Honda Insight (124k miles, automatic, $3330)

2002 Chevy Cavalier (131k miles, ‘engine needs service’ announcement, $1515)

1994 Acura Legend L (169k miles, garage kept, $1515)

The Saab I got a good price. But they tend to sit for a while.  A low price always helps but retailing Saabs always seems to be a race to the bottom. I may just flip it at $2995 for a quick sale.

 

The Insight was low because the Check Engine and Maintenance Lights were on. The maintenance light is just the Honda dummy light that goes off for scheduled maintenance. The Check Engine light looked to be nothing more than a code P1166 (Manufacturing Control: Air Fuel Metering) which requires nothing more than a new 02 Sensor.

But then I got it on the road and within a half mile, the IMA light popped on. Nine times out of ten this is due to a bad battery module and sure enough, that’s exactly what it was. The vehicle was arbitrated and I got my money back.

The Cavalier was a purely speculative buy. I knew the radiator fan was not coming on, and I hoped that the engine was still in good shape. All the fluids and tailpipe emissions reflected a good working engine.  But you never really know until the problems are fixed and the car is driven.

I put in coolant after picking it up. Within a few miles I also saw that it was slowly leaking from the lower radiator house. An easy fix so long as everything else is okay. Worst case scenario, I run it through a dealer auction and make my money back.

The Legend was a rare find. For some reason I’ve purchased a slew of first generation Legends over the years. But never the second generation. The fact that it went through near the end of the sale (140 out of 145) may have helped lower the purchase price. Dealers tend to either leave the sale or stand in line to pay for their purchases during the waning moments of an auto auction.

It’s easy to brag about sale prices. However most vehicles that go through an auction will require a little bit of something. In fact, these days you can usually bet that they will need a ‘lot’ of something. The majority of folks who trade-in cars these days either have a seemingly expensive maintenance issue, or in the case of Georgia, are behind their payments on a title pawn.

Time will tell whether these buys will bank out. As for the other 141, here were a few of the more interesting buys.

2005 Jaguar XJ8 L: 111k, scuffs on two of the doors, front and rear bumpers: $9300

1997 Jaguar XJ8: 175k, ‘frame damage announcement’, clean exterior & interior, 30+ dealer records   $3100

1999 Jeep Grand Cherokee Limited:  119k, sunroof, leather, clean condition, $4100

1998 Jeep Grand Cherokee Limited: 148k, 4WD, no roof, no leather, average condition, $2400

2002 Honda Accord LX: 156k, green, average, blah… $4200

2002 Honda Accord EX: 139k, ‘engine needs service’, ‘transmission needs service’ But hey! Leather seats! $3300

1996 Nissan Maxima GLE: 102k, leather, sunroof, good condition $2600 (I was outbid by $100)

2000 Nissan Maxima GLE: 182k, same options, ‘below average condition’ ‘not actual miles’ $2600

 

and finally for those dreaming of someday owning a Corvette… this sale offered four of them.

2008 Corvette hardtop: ‘Frame Damage’, 43k miles, blue: $21,200

2000 Corvette hardtop: 55k miles, clean condition, $13,800

1998 Corvette Convertible: 46k miles, clean condition, $15,500

1986 Corvette convertible: Clean condition, 86k miles, $4500

 

Wondering about a given model? Feel free to name it and I’ll let you know if it sold and for how much. Just an FYI, no dead brands sold at this sale… except for 1 Oldsmobile, 2 Mercurys,  3 Saturns,  my unloved Saab, and a baby blue Plymouth van with a Mitsubishi engine that finally blew its  last ring.

 

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28 Comments on “Auction Day: The Tax Season Cometh...”


  • avatar
    V572625694

    Saabs are going to sit for quite a while longer now that the manufacturer has announced they won’t honor warranties.

    By the way, I just sold a car to Carmax and found it to be the exact opposite of the experience you get at an “ordinary” car dealer: no haggling, no “have to check with the manager” BS, no holding your car hostage until you agree to buy a new one… really just a pleasant and businesslike experience. The price they offered was within a reasonable range of what I wanted, and they made an offer good for a week so I could shop elsewhere if I chose.

    • 0 avatar
      tankinbeans

      Knowing full well this is probably a really stupid question, I ask that people don’t make too much fun. Is it a possibility that GM, in an attempt to regain some customers, might honor the warranty claims on those made after the Spyker-Saab deal went through? Perhaps discounted service because I’d imagine the parts are going to be the same as those made during GMs ownership?

      I know this probably won’t happen, but it’s an interesting thought experiment.

      • 0 avatar
        Educator(of teachers)Dan

        If GM wanted to regain/keep customers we could talk about 100,000 things the General could have done differently. Given that they’ve passed on doing much more substantial things I don’t see them doing this. I will say though that parts won’t be a problem for Saab owners save body parts and unique interior bits.

        There are days when I’m torn between a 9-7 Trollbazer, last of the Bravadas, or Buick Rainier for a “winter beater.” (At least the Bravadas are slipping into that territory.)

  • avatar
    ott

    Doesn’t sound like very good prices to me… If any of those cars had gone through one of the auctions we frequent (Adesa Ottawa and Montreal) They would’ve gone for much less, but then, there are over 400 cars weekly at the dealer auction in Ottawa, and over 2000 a week in Montreal. Based on this article, I guess we should consider ourselves lucky to still have a good selection. So far, anyway…

    • 0 avatar
      Educator(of teachers)Dan

      Tax season cometh = stupid prices

    • 0 avatar
      dvp cars

      ……Canadian auctions…..with some exceptions, the cosmetic condition of 10+ year old cars from the northeast rust belt is far removed from relatively pristine Georgia units. That having been said, I follow dealer auction prices in both countries, and you’re right, Canadian prices are decidedly lower on older vehicles. Even a 5% drop in the “loonie’s” value will see American wholesalers hitting those auctions in droves, much as they did in the late 90’s. Nothing like a few megadealer buyers with million dollar lines of credit to firm up your prices………enjoy those bargains while you can.

      • 0 avatar
        ott

        True enough! I remember when the loonie got to par and lots of dealers headed south to buy their stock in the States. Still are, actually. And as you say condition also matters, and Southern cars will be cleaner by nature.

  • avatar
    Educator(of teachers)Dan

    Just out of raw curiosity, Steve, what were Panthers going for? Were their prices getting stupid high too?

  • avatar
    Steven Lang

    Good question. A 2005 Ford Crown Victoria Police Interceptor with 197,000 miles sold for $3400 (plus $130 auction fee)… which I thought was an insane price.

    I happened to buy a 2006 CVPI last night at a public sale with only 151k miles for $1850 (plus $175 auction fee) . That one was maintained by the State of Georgia as opposed to the other one at Carmax which was ragged out by the prior owner.

    High demand older vehicles just go for insane prices at this sale.

    • 0 avatar
      Educator(of teachers)Dan

      A 2005 Ford Crown Victoria Police Interceptor with 197,000 miles sold for $3400 (plus $130 auction fee)… which I thought was an insane price.

      That is insane, Amigo. You’ll get better prices on eBay for better units, even from top rated sellers.

    • 0 avatar
      johnhowington

      wow, that is quite insane. the local austin tx surplus store will sell a slightly barfed in (but cleaned) 2006 interceptor with 90k on the odo for $4000.

  • avatar
    nikita

    Are high auction prices also reflective of Atlanta, with no road salt and a better economy than many other parts of the country?

    I cant imagine an Insight going to auction unless something serious is wrong, like an out-of-warranty battery pack.

    • 0 avatar
      Steven Lang

      Our economy is among the worst in the country. I believe we were first in job losses for all metro areas in 2011. I could be wrong on that…

      Atlanta is a big hub for auto auctions due to it being the most populous metropolitan area in a 500 mile radius. We also have the largest airport in the world which helps keep airline prices down.

  • avatar
    MrWhopee

    Well, the Saab’s 11 years old, it’s out of warranty anyway even if they’re still honoring it. Even a Hyundai with 10-year warranty will be out of warranty at that age. Though getting parts in the future might be a problem.

    • 0 avatar
      Acubra

      Not at all, pre-facelift (99-2005) 9-5’s are very well covered, and tons of parts on breakers yards or from internet retailers.

    • 0 avatar
      tankinbeans

      If Hyundai uses the same warranty model as Kia does, I couldn’t see why they wouldn’t, a 6 year old Hyundai will be out of warranty as soon as the original owner signs the title.

      This is not to disparage the company. My friend had a lot of luck with his ’05 Accent until some tard pushed it out of its parking spot the hard way, with the front of a Blazer going rather quickly. My other friend’s parents have had good luck with their 2005 Sonata, needing only routine maintenance.

  • avatar
    JCraig

    This time last year I bought a ’99 Saab 9-5 V6t wagon, loaded, good condition, blue on tan leather, 120k from a trusted local dealer for $2800. Sold it about 6 months later after the novelty wore off for $3500.

  • avatar
    smokingclutch

    That Insight is crying out for a B- or K-series swap. With the batteries gone, the car will likely weigh less than 1800 lbs and would be a damned rocketship with a proper DOHC VTEC motor.

    • 0 avatar
      Wade.Moeller

      Depending on the in-service date of the Insight, it could have still been in the IMA battery warranty extension of 10 years/157,500 miles. Even if it is out, you can get a refurb (or do it yourself) for $1200. For $1800 you can get a brand new aftermarket pack using the latest NiMH battery cells.

      BTW, the battery pack is 50 lbs. The extra electronics that runs them isn’t more then another 25 lbs. You are only getting under 1800 if you gut the interior, replace the windows with Lexan, and make it a full size RC car.

      • 0 avatar
        smokingclutch

        Meh, I am much more interested in making a fast car than fixing it as a hybrid.

        IIRC the curb weight as delivered is less than 1900 lbs, so subtracting 75 lbs would get you to 1800 lbs, more or less. What I don’t know is the difference in weight between the factory engine+motor combo and a B or K.

  • avatar
    Acubra

    Steven,

    A question re. SAABs.
    What would be a going rate for a clean 2004-05 (sweet spot years), 9-5 Aero with a manual transmission and less than 100K miles? Currently I only see 2 on autotrader but they want some insane money for theirs…
    And it seems that cars with a stick are pure unobtanium anywhere, be it craigslist, auctions or retail.
    Thank you…

  • avatar
    Conslaw

    What are Priuses (Prii? Prien? Preasauruses?) going for at auction?

    • 0 avatar
      Steven Lang

      Year, options, miles, condition, etc…

      The cheapest I’ve seen is $4500 for ones with over 200k. Then again, you also have to consider the ones that have bad batteries or electrical issues.

      Truth be told, not many Priuses make it to the auctions.

  • avatar
    fincar1

    I wonder if the high prices on Panthers are due to taxi outfits buying them – that’s where they all seem to go in western WA – if you want one that’s who you’ll be bidding against.

  • avatar
    NormSV650

    Pickup similar 9-5 for $700 less on eBay with carfax style printout. And no auction fees, just had to drive 6 hours to get it.

  • avatar
    j3studio

    Steven,

    With the Corvettes, does hardtop mean fixed roof or hatchback?

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