Seized Car Police Auctions
By car-guy. Filed in car police auctions |Tags: car police auctions, seized car police auctions
“We’re going to a seized car police auction tomorrow. You want to go with us?”
“Absolutely! I’m in.”
I was at my sister’s house for dinner and my brother-in-law, Bob, was telling me about a guy he met who buys cars at auctions and sells them privately for a profit and does real well at it. Bob is a good guy and he treats my sister right, so I like him, but truth be told, he’s not the sharpest tool in the shed, so I always take what he says with a grain of salt.
But this was “see the pro in action” stuff and I definitely wanted to see how this all went down.
I met the pro, Steve, the next morning and off we went to the auction yard.
“So do guys get new Corvettes for like five hundred bucks at these auctions – or is that just an urban legend?”
Steve said, “Here’s one of the things you have to understand about any seized car police auction or any other sort of public auction where cars are being sold.
There will be professional car dealers in the crowd.
If they’re letting a new Corvette go for five hundred bucks – and stuff like that does sometime happen – then it’s only because the car has serious problems, most likely with the title, and the doofus spending the five hundred bucks is most likely going to lose the money and the car.”
He explained that one of the things the casual weekend bargain shoppers don’t realize is that the police aren’t required to have clear title to the cars they impound and sell off. It’s up to you, the buyer, to run a vehicle report and make sure the title is clear. Steve uses AutoCheck which he can use from his iPhone.
So we hit the auction lot and Steve goes to work. He immediately passes up any car that is seriously damaged.
“The guys who own body shops will be buying those cars.”
Surprisingly, he also immediately passes up any car that is in obvious excellent condition.
“The creampuffs go to the weekend bargain hunters and they usually end up paying too much.”
“I’m looking for cars that need a little work. Just enough work to scare off the weekenders, but nothing more than I can fix for a couple of hundred bucks and some elbow grease.”
So when he sees something he likes, he first checks the VIN, then does a complete and thorough inspection of the car and determines its “Blue Book Condition.”
“I always carry the latest Kelley Blue Book with me so it’s easy to look up the make, model and year of a car and figure its ‘Trade-In Value.’ That’s the price a dealership would give you for trade-in on this car.”
“Ok, cool.”
He showed me the book on the car we were looking at and I could see that the condition affected the price of the car by thousands of dollars. So understanding condition is a huge deal.
“I try to find cars in ‘Fair’ condition that I can bring up to “Good” condition. Then I sell them for the ‘Private Party Value’ which you can see will usually net a decent profit if everything goes right.”
I could see the numbers in the book that showed he was right.
After going over the car, he would then figure the cost of bringing the car into better condition.
“I always plan to put on new tires. Private Party buyers always like to see new tires.”
His final figure was the Trade-In book value less the cost of repairs. In other words, if the Trade-In Value for the car in “Good” condition was $3,500 and he was looking at a car in “Fair” condition that could be brought up to Good for $300 then his final bid would be $3,200.
“Wait a minute,” I said, “That’s more than the Fair condition value of this car as it is. You’ll be paying more than Kelly Blue Book for this car!”
“You’re right, I will, and that’s why I have a chance against the dealers. I’m counting on them not being willing to pay above book price. But I’ll still make my profit when I sell to a private party.”
“Cool”
So after checking out all the cars and coming up with his final figure for the cars he liked, he opened up his laptop and started checking the particular makes and models against AutoTrader and eBay Motors so he could see the current market conditions for the cars he was considering.
“Sometimes I’ll pay a little more if there is a hot market for a car or a little less if I can see the market is weak.”
As the auction progressed, it turned out that all the cars Steve had been considering went for more than his final figure. So we left without making a purchase.
“You have to be willing to let them go if you’re not going to get a deal that makes sense. This is business, not emotion. There’s always another auction down the road.”
I had a good time and I learned a lot that day.
I learned to always check the title. I even did a Free VIN Check on my own car!
I learned to love the Kelley Blue Book Used Car Guide.
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