Getting an auto dealer license just to access dealer only auctions- worth it?

January 17, 2008 12:35 PM

Are there significant savings at dealer-only options for used cars? Enough to make the effort and cost of getting a dealer licence worth it?

I drive past ADESA often, a HUGE car auction setup with super high turnover. I've learned they take fleet, trade in cars, and lease returns off people's hands and sell them off to used car dealers.

In order to bid, I need to have a BC dealer license. It looks to be several nights of work, 2 days of courses, and $500. Kind of interesting stuff, especially if it pays for ittself and more.

Is the BC auto dealer license much trouble to get?
Are the bid values at these dealer-only auctions obscenely low compaired to the open market/buysell?
Are there tax/regulatory restrictions to getting a license and buying a car for yourself?

Is it worth the trouble?

posted by upc_head to shopping (10 comments total)

Why not just find someone who already has a license and have them bid on your behalf? You could probably offer them $500 or less for their troubles.
posted by roomwithaview at 12:40 PM on January 17, 2008

@roomwithaview
I considered that, but decided against it
1)None of my good friends have such a license
2)I'm not going to trust some craigslist stranger with thousands of dollars to buy it.
3)I wouldn't get the training which hell - could be handy for the rest of my car buying life when dealing with whoever (know your rights)
posted by upc_head at 12:54 PM on January 17, 2008

I used to drive cars for one of these auto auctions as a summer job. Things may have changed since then but they also may not have. I'm not sure if you know how they work, but basically the car gets driven in to a room where you have to basically bid on it then and there without knowing much of anything about the car. You can look under the hood. You can talk to the person who is driving the car who is instructed not to tell you anything about it -- we were told to say that every car runs "like new" which just became a bit of a joke because the dealers knew we were supposed to say that -- and you can look under the hood and listen to the car run. The drivers were mostly high school kids and hard core down-and-outers who took the cash and spent it on beer. None of us were people whose opinions you should trust before spending a few grand on a car.

Most dealers cared if the car had AC and power steering and if there was anything majorly broken like no winshield, grinding noises, etc. My take on this was that they could fix most other things in their EXTENSIVE REPAIR SHOPS. I emphasize this because it is the thing that you likely don't have and one of the things that makes an auction-like crapshoot a bargain. Some people got great deals on cars. Some people paid a lot of money for cars they probably weren't even able to drive home. Some cars smelled like they had been pulled out of the river and/or had people smoking in them 24 hours a day. There were very few cases where a really cherry car went for some insanely low amount of cash because the auction setting drives most prices up to normal levels. The only things that almost no one bid on were cars with no AC/power whatever.

This may have changed and I know it doesn't quite answer your question, but it's another suggestion to maybe find someone with a license if you jus want to buy one car for you. I got the feeling that it was volume that made this sort of hot or miss situation worth the while of used car dealers.
posted by jessamyn at 12:58 PM on January 17, 2008

I don't know about BC car auctions but I've been to quite a few car auction places in California, and bought once. As jessamyn says, the opportunities for checking out the cars are very limited, and you can very easily get more trouble than you expected. Auctions are ways to pass cars on without fixing any problems.

So a license isn't all you'd want; you also need a good mechanical knowledge of cars, a good shop to fix the problems at low cost, and luck. (I was lucky, but a friend wasn't.)
posted by anadem at 1:16 PM on January 17, 2008

In the Philadelphia area, it's a common service for a dealer/mechanic to take you to such an auction and help you buy a car. I think it costs about $100, and you don't pay unless you end up buying a car. The mechanic also offers what little advice he can give about the car's condition.

Years ago, someone I know went this route, and got burned pretty badly. They didn't even make it home before the car's engine went and required a rebuild.
posted by qvtqht at 1:16 PM on January 17, 2008

One other aspect to keep in mind is that you'll be bidding against people who do this for a living. If they think they can make a profit on it on their lot, they're going to be in the game until the price approaches what you could get it for outside the auction.

If you want to do it for fun that's fine, but don't expect to save much if any money.
posted by maxwelton at 1:17 PM on January 17, 2008

In short: probably not.

As others have mentioned, if you have a particular model/make/year in mind and you have someone who can go and bid on your behalf, you might get a decent deal.

(disclaimer: I work in the wholesale auto industry. mefi-mail me if you want further info.)
posted by jquinby at 1:28 PM on January 17, 2008

@maxwelton - I would expect that the wholesale price would be significantly lower than the retail price. Why would a buyer get in a bidding war just to win a car he couldn't sell at a profit? I can't imagine they would ever bid on a car they didn't think they could sell for at least $2000 more than they paid. On price alone, he'd most likely win.

But all the other caveats would still apply. The cars at auction had to come from somewhere, and chances are it wasn't a good place. Car dealers generally like to keep good cars to sell themselves.

I would expect that you'd get a better value buying directly from a rental place's used car division. They'd offer some kind of warranty, and I've generally heard good things about going that route.
posted by gjc at 6:20 PM on January 17, 2008

I have a couple of friends who used to own a used car lot in GA and went to these auctions all the time. They catered to the low end of the market; the cars were not very good and after they buffed them up a little they sold them for what they had invested in them as a down payment so that even if they ended up getting stiffed they would at least break even. These are generally trade-ins that the dealer just wants to unload. If you are looking to move a bunch of cheap cars on a lot it is a good way to go, but if you just want a good car for yourself you would be better off finding a car in the classifieds and having a mechanic inspect it.

My friends were up front about their cars and offered a 50/50 warranty-50 feet or 50 seconds; also a 2-for-1 warranty: if you drive it off the lot and it breaks in half, you own both pieces.
posted by TedW at 7:50 PM on January 17, 2008

Are the bid values at these dealer-only auctions obscenely low compaired to the open market/buysell?

If they were, wouldn't the auctioneers sell the cars directly to consumers on the open market? Why would they sell the car for less than they could?
posted by Dec One at 8:13 PM on January 17, 2008