When you need to buy a car do you search online through search engines, visit car companies or talk to friends? Another possible way for you to purchase a car is through an auction.
You wouldn’t know it from the road, but there are typically around 4000 vehicles tucked away awaiting sale at the Copart auction facility in Newburgh, New York. And arriving on a Thursday morning for the regular weekly auction, you really wouldn’t guess that about 1000 of those vehicles would be on their way to new homes by day’s end—whether that means the driveway of a proud new owner, on a dealer’s lot, in a body shop for pre-resale repairs, or off to the crusher. On the Thursday of our visit, the parking lot is empty, save for one agitated tow-truck driver talking on a cell phone and whose half of the conversation consists almost entirely of expletives.
Inside, however, is a different story. A busy staff of about a dozen headset-wearing workers is fielding nonstop calls from dealers, and handling title issues, deliveries, and other questions. The auction is in full swing, but there’s no fast-talking auctioneer, slamming of gavels, shouting of bids, or cars crossing the block. As with many car auctions these days, all the bidding happens online. And fast.
Used-car auctions are big business, and companies like Copart, Adesa, and Manheim are the giants of the industry, with daily auctions nationwide. Copart puts 75,000 cars up for sale every day, but Manheim is the biggest, handling some 7 million vehicles in 11 countries annually. It’s a complicated business, with cars moving locally and across the country to maximize profits based on supply and demand, regional needs, and even the price of scrap metal. The vehicles come from a variety of sources, including fleets, rental companies, carmakers, financial institutions, insurance companies, and other wholesalers.
The bad news for bargain hunters is that the bulk of these auctions are for dealers only. But paddle-wielding wannabes have plenty of other options, from municipal and federal government auctions, to commercial auctions catering to the public, and auction sites like the ubiquitous eBay.