By: Gov Auctions | 24 July 2014
Bidders at Government Car Auctions - Who Are They?
There are a number of different variables which will effect an auto auction, especially a government auction, but none are greater than the type of people you are bidding against. The people bidding against you will directly determine what the average buying price of a vehicle is at any given auction.
A Few Things to Keep in Mind about Government Auctions
In order to better understand the people you are bidding against there are a few basic facts about government auctions which are important to keep in mind. This is because these characteristics play a significant role in determining exactly who you’re competing bidders will be.
Government fleet Auctions Have a Multiple Vehicles Which Are Relatively Similar
The first thing to keep in mind is that government fleet auctions will typically have multiple vehicles which are relatively similar. In fact, many government fleet auctions will have five or more vehicles which are the same make and model and were manufactured within a year or two of each other. Even the mileage can be similar. As a result, you need to let the aggressive bidders overpay for the first few units and take advantage of the dramatic savings which will come about later.
Government Seized Vehicle Auctions Have a Wide Range of Vehicle Types
On the other hand, Government seized vehicle auctions typically have a wide range of vehicle types available in very few, if any, duplicate listings. This means if you have multiple people with similar interests as yourself then you may be forced to pass up on a vehicle because the bidding will get to extreme.
Government Auctions Are Not Held as Often and Normal General Public Auto Auctions
The final thing to consider is that government auctions are not held as regularly as your average general public auto auction. This means that certain groups of people who primarily target government auctions are more likely to overpay simply because they know there will not be another opportunity to land a great deal within the next few weeks. This means if you attend both government auctions as well as general public auto auctions will be easier to wait until the best deal appears because many locales offer public auto auctions on a weekly or biweekly basis.
1. People Just Like You
The first type of people who will attend a government auto auction are essentially people just like you. They are looking for a chance to save money on a quality, reliable vehicle while avoiding high pressure dealerships. In most cases, they will not be targeting a single, specific vehicle but rather waiting until a goodbye appears.
What The Average Person is Bidding On
The average person is being based upon value rather than make, model, or mileage. They are just as happy to pay $15,000 for a $25,000 car as they are to pay $5000 for a $10,000 car. The key is identifying and taking advantage of value. Often they will opt for a more family-friendly or fuel friendly vehicle rather than an expensive or flashy vehicle.
How They Affect the Auction Tempo and Price
The average person will affect a government auto auction in two ways. First, they typically slow the tempo the auction down because they are more tentative to get the bidding started. They also want to avoid driving up the price and said they will pass on a good deal in hopes of landing a great deal later. This means you can still get an excellent deal even though you may not land the best deal of the day.
2. Used Car Dealerships
Used car dealerships are showing up to government auctions in droves because they know they can purchase quality used cars at below market value. It is also a great way for them to replenish their stock without relying on customer trade-ins. In most cases, one or two representatives from the dealership will attend the auction.
What Used Car Dealerships Are Bidding On
While used-car dealerships are focusing on value they are equally focused on obtaining the more popular models. This is because they will move more popular models off of their lot faster. As a result, they can generate a smaller profit margin per vehicle because they have the ability to sell multiple vehicles faster which results in a larger net profit. Typically, they will also avoid vehicles with overly high mileage because people who show up to used-car dealership don’t want to vehicle with 100,000 miles or more on it.
How Used Car Dealers Affect Auction Tempo and Price
In most cases, used-car dealers will only have a dramatic effect on car prices at an auto auction at seized car auctions. This is because seized car auctions often have the more exotic vehicles available. At a fleet vehicle auction car dealerships will still be active but one drive up prices as much because they know they will have multiple opportunities to buy similar vehicles. The greatest impact they have on the auction is the tempo. Since a majority of these car dealerships will also be attending weekly dealership auto auctions they are very comfortable the process and know exactly how much they’re willing to spend on the vehicle. As a result, they are comfortable, and even prefer, a faster tempo.
3. Local Businesses
The final type of people you will often find a government auto auctions is local business owners. While many businesses prefer to purchase new vehicles for their fleet this doesn’t mean it is always the most economical option. As a result, more local businesses are turning to government fleet vehicle auctions in order to expand the size of their own fleet of vehicles.
What Local Businesses Are Looking For
Local businesses are emphasizing one thing – reliability. While they definitely want to pay as little as possible for a fleet vehicle they are more concerned about purchasing a unit which will last a long time with minimal maintenance. As a result, they tend to focus on lower mileage models.
How Local Businesses Affect Auction Tempo and Price
Local businesses fall somewhere in between the average buyer and car dealerships in terms of how they affect tempo and price of an auction. They are not as quick to bid as car dealerships but are much more confident bidders than the average person. This is because, like used-car dealerships, they have a set ceiling bid they will not exceed. The only difference is they get more tentative as they approached the ceiling bid.
All three of these groups of bidders often found a government auctions can be broken down into numerous subcategories. While each subcategory will have noticeable differences from every other subcategory, knowing the three primary categories of bidders is often enough information for you to quickly assess the crowd at any government fleet auction.