ACV facts & figures
There are no two ways about it, securing auto inventory has been no picnic over the past few years. With the shortage of new cars and like-new cars on the market, dealer auctions can often be your best bet for securing inventory.
Meant for dealers' eyes only, these exclusive auctions can be a great way to source or sell auto inventory. So, just how do you get in? We’ll go over the basics of registration and how to zero in on great deals once you're there.
Registration for Dealer Auctions
Dealer auctions are exclusive to dealers. Thus, proof of dealer license and registration is usually required.
Every auction, including online ones, requires a separate registration. At ACV Auctions, we streamline the process, making it user-friendly and simple. Generally, the information dealers need to have on hand includes:
- Dealer auction license information and number
- Information on dealership class and size
- Location information for your dealership or office
- Best contact information including phone number and email
- Payment method: ACH (routing #), debit card information, or floor plan details
Additionally, an auction employee may call you to verify your account and information and make sure you are set up on the system.
The information you need to register can vary depending on the online auction platform. Some wholesalers may charge an auction fee just to register, require large down payments, or have other hidden costs. So be on the lookout!
With ACV, you can trust there will be no sign-up fees or other hidden costs—our buyer’s premiums are always clear and consistent.
Once you're registered, your access to online vehicle auctions is limitless. Yet, it’s important to know what you are looking at. Where did these cars come from, what’s their history, and what do you need to know before the bidding starts?
Start with what you know: Your inventory. Knowing what cars you have and what you might need will dictate what you should bid on at the auction. Decide what make, model, mileage, price range, and condition you want to focus on.
The types of cars that end up at auction will vary from gently used off-lease cars that could be mistaken for new vehicles to well-loved used cars that have checkered histories of accidents, mechanical problems, damage, or even theft. Knowing the difference between types of used vehicles will ensure you get the best inventory for your customer.
Your first step in any auction process will be to look at the run list, which is the list of vehicles available for auction on a given day. Identify what cars you can sell at your dealership and those you can repair and sell at wholesale. You’ll want to grab the VIN so you can look up the car’s history report. At ACV Auctions, you have the added benefit of a basic CARFAX report for free or link your account for instant access.
Knowing in advance the type of cars you are likely to find at auction sites can be vital for your success at auto auctions. The most popular categories include:
1. Wholesale used cars: These used cars just didn’t sell at other dealerships, so dealers put them up for auction. These vehicles can be great deals depending on your customers. What sells in one market doesn’t always work in a different one. Another dealer's loss can be your gain, but make sure the type of car is right for your customers. These cars can have varied histories, so you’ll also want to leave a margin for repairs.
2. Overstock cars: Overstock cars can be some of the best deals out there! These are in essence brand new cars that come to auction when a new car dealership orders too many units. Overstock can end up at auction with very low mileage and little investment will likely be needed for repairs. Overstock cars are a great bet if they don’t have known recalls and are enticing to your customers. Overstock cars are usually high on the price scale, but are great investments.
3. Trade-ins: Dealer trade-ins run a huge range in quality and age. Sold to dealers by private sellers, these used cars are often older vehicles, but that doesn’t mean their journey is over. Sure, some of these cars are destined to be sold as-is or used for parts. However, some owners trade in vehicles after a short time for an upgraded model or previously unavailable features. Since most trade-ins will have considerable mileage, you’ll want to leave a margin for repairs on these vehicles. However, if older vehicles are what sells in your market, trade-ins can be a great deal.
4. Off-lease: These cars return to the dealership at the end of their lease term. They will typically vary in condition. Many of these cars are recent models and have low mileage. They can even seem like new cars. Others might have been used heavily for business travel, running up the odometer. Keep in mind that some lessees will avoid maintenance costs and opt to lease a new car instead. Some dealerships will fix these up before wholesaling, but checking vehicle history and maintenance will help you estimate your overhead.
5. Rental Vehicles: Similar to off-lease cars, rental car vehicles can be excellent buys. Rental car fleets regularly sell their used cars and buy new ones so they can rent out new to market models. With rental cars, you never know who rented them or what they were used for, so there can be some surprises. Owner maintenance can also be a mixed bag with each rental company or location. When buying cars that were rentals, watch out for high mileage, accident history, and maintenance history.
6. Repo: Repo cars can be some of the newest inventory available at online auctions. If a car was repossessed, the buyer defaulted on what is often a low mileage vehicle. Repo cars can mean newer models and even higher-end cars. Before buying, you’ll want to examine the vehicle report carefully—repoing may cause body damage if there is a conflict—and inspect maintenance history. For expensive repo cars, knowing the cost of replacement parts can be crucial to your bottom line. With that in mind, buying cars that were repoed can give you a great deal on a like-new car.
7. Salvage title:
Salvage title cars are vehicles that insurance companies paid out in full. These cars can get tricky quickly. We advise new auto auction buyers to bid on these types of vehicles with caution. Some professionals will rebuild and get a reconstructed title for these cars. Yet, salvage title cars can still be hard to insure. Even after a rebuild, moving these cars from state to state is hard for customers.
For example, it may be tempting to buy a car that was stolen and recovered. Especially when it's in like-new condition. Legal problems abound even if the car is in great shape. If you're a newer dealer, it may be best to leave these types of cars to auto-industry veterans.
When considering each of these car types, you’ll need to build in both time and money for repairs. Being able to estimate both how much it will cost to repair each car and how long it will take can be important for turning a profit.
These are just some car types auction companies might sell at a wholesale auction. For more detailed information on the wholesaling process, we recommend checking out Wholesaling Used Cars: The Ultimate Dealership Guide.
Estimate Inventory Value
At the end of the day the VIN, history reports, and CARFAX report can only tell you so much about a car. Sure, a price estimator like Kelly Blue Book might give you a ballpark figure for the retail value of a vehicle, but that is hardly the end of the story.
At ACV Auctions, we take both a personal and a data-driven approach to evaluating each and every car on our auction site. ACV’s inspectors test drive every car and take detailed pictures for best-in-class condition reports. You can check out the undercarriage with Virtual Lift™ or listen to the roar of the engine with our AMP™ technology. Condition reports also include paint meter readings and any OBD codes. Simply put, you know exactly what you are getting.
Our Market Reports provide access to data from every car sold through ACV Auctions. This powerful information will give you an edge no matter your experience level. Market Reports supply you with a better sense of how the year, make, model, trim, and more can affect vehicle price so you can bid with confidence. This data-driven information helps put you in control of profits.
Get into Dealer Auctions and Start Growing Your Business
No matter your market, knowing what cars to buy at auction could not be more important to your business. These tips will help you turn your new inventory around quickly and get your new cars out to customers.
If you're new to the auction process, we also recommend reading How to Buy a Car at Auction to master the basics. Browse our blog for tips on how to get into car auctions and all the things you need to make your business a success.
We look forward to working with you at ACV Auctions! Start finding great inventory by registering below.
Aug 30, 2023