Hope you all had a great holiday season! I know times are tight, and everyone is looking for deals on everything from eggs to automobiles. Recently, I've noticed a lot of auto auction sites popping up, or maybe I've just started paying more attention. But unlike "real" auctions, are you really going to find a sweet deal on any of them? I have my doubts.
The site I pay the most attention to is Bring a Trailer. It covers North America—both the US and Canada—as well as some other countries around the world. You can find a wide variety of cars, trucks, motorcycles, boats, and even motoring memorabilia. Browsing the site is like flipping through a dream catalog. However, when it comes to bidding on the car you’re after, I've never seen the advantage over private or dealer purchases. At least with those, you can speak to the seller and try to strike a deal that works for you. The truck below was in very nice shape but was listed as having 139k miles. I was blown away by the selling price of this auction. Apparently the market price of these are $55,000 to $73,000?!? LINK
Whenever I see something that looks like a deal, I search previous sales to determine the current market price, considering mileage and condition. Armed with that knowledge, I know when to stop bidding. I've bid on a few Bring a Trailer auctions, and even when they’re no reserve, I've never seen them sell low. I was watching one auction that seemed to be going under everyone's radar, and I got a bit excited. But then someone posted a comment saying, "What is happening here? This car is worth double this. Why are there no bids?" I replied, "Hey, maybe shut up, man." He said, "I just want to see the auction sell for a fair price." WHY? He wasn't the seller or a bidder—go away. But, of course, after that, it jumped right up to market value. Below we have similar cars selling for about the some price with and without a reserve. The average market value of a 1995 Mitsubishi 3000GT VR-4 6-speed with around 17,000 miles is approximately $30,000 to $31,000. I understand the other is a 1991 but also has less miles. A 1991 Mitsubishi 3000GT VR-4 with around 10,000 miles typically has an average market value of $28,000 to $33,000. Both cars are selling for their market value or above.
Most auctions have a reserve set, so it's not going anywhere under market price. With folks like those policing the auctions, I don't really see anyone getting a good deal off these sites. The biggest advantage they have is that you find cars you won't see in your local paper. And honestly, if it’s that kind of car, you’re not getting it for under market price.
So, with the fees they charge to sell and the lack of rare deals for buyers, I'm really not sure I'd advise anyone to buy or sell on these online auctions.
