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The rise of the car aution

There is more real choice for car buyers than perhaps ever before, yet the evolvement of the car auction is probably the most startling.

A few years ago buying a car from an auction was a spin of a coin; if you got lucky you bagged a bargain if not you could end up with a nail. Simple as that, there were no comebacks and no refunds and therefore a private buyer at auction was really quite a rare beast.

Today however auction houses have made tremendous strides in improving the service they give to all buyers and as a result more private people feel empowered to buy a car confidently from an auction.

If you want a car for a fair price and are not bothered about the fluffy service and ambient surroundings of a showroom or worried about a few marks and a car which may not be fully valeted, then buying from an auction today is a very practical option. The choice turns out to be quite a simple one; if you want the service and the backup pay a couple of grand more and buy from a dealer, if that doesn’t worry you get down the car auction.

There is an irony though with these improvements; many dealers who sell their unwanted part exchanges through the auction channels have seen their conversion percentages soar along with profits as they attempt to maximise profitability in partnership with the auction houses but at the same time are losing customers who may have bought from them had they not had the confidence to buy from through the auction channel.

A sales manager told me recently that although they have benefited from the greater profits derived from their auction cars they have also had to buy back quite a few. Because of the more transparent nature of the modern car auction, problems with vehicles which are not declared and subsequently discovered to have been there at the time of sale has led customers into exercising their new found rights and asking for their money back.

In the long run this will probably prove to be a good thing as it will promote better practice overall. For example if a car at present is taken in by a dealer as a trade-in and, as a result of not being appraised properly, turns out to have a serious fault it must be declared. Therefore the onus is on dealers to improve their processes and ensure that all cars are professionally appraised and priced accordingly, so in the event of a problem it can be declared at the point of sale in the auction hall. With all parties being aware there is therefore no need to have cars returned as they have been described properly in the first place.

The car auctions are certainly going to attract more and more buyers and where dealers may gain from building a brand within the auctions they may lose retail customers as a result.
However for the car buyer the more legitimate channels and the greater the choice the better it must surely be.

Jul 29, 2011In51der
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