What kind of cars go to auction?
- Off-lease: vehicles returned to the financial institution at the end of a lease term. Closed auctions are usually the only venue for such financial institutions to dispose of a large volume of end-of-lease returns.
- Off-rental: rental companies normally replace their fleets once a year, releasing a flood of late-model cars to the secondary market. Rental companies rely on auto auctions to sell off their used inventory. These vehicles tend to be well maintained and driven for only one year.
- Company/fleet cars: companies of varying sizes own or lease cars, trucks or vans that they typically keep for two or more years. Like rentals, these vehicles do not have many extras and get thoroughly exploited on a daily basis. Unlike rentals, usage of company cars varies greatly from the executive luxury sedan driven slowly and carefully on occasion to the delivery truck that regularly mounts curbs and gets abused in city traffic.
- Repossessed: vehicles can be voluntarily or involuntarily repossessed by financial institutions for delinquency or another reason for recall. Auto auctions are again the bank’s only option for deliverance. Repossessed vehicles can feasibly sell for less because the financial institution disposing of them only seeks to offset its losses (also restricted by federal regulations).
Who can buy a car at an auction?
- Only licensed dealers can buy a car at an auction
