How To Gain Access To Cash Auctions & Buy Wholesale Vehicles.

Dec 18, 2015
11 min read

Introduction: Welcome to our company blog site where we discuss how you can gain access to private dealer cash auctions and purchase inexpensive vehicles to resale for profit, without having to have good credit, if you are on a very limited budget, or you want to utilize your tax season funds wisely in order to get a solid return back on your investment. Everything that we express in this blog isn't a get rich quick scheme. We also don't want you to get a misconception that you will be a millionaire by utilizing our advise. The purpose of our information is to give the average man or women the opportunity to obtain solid income that could pay their bills or even give them the opportunity to leave their full time job if the desire is to find a realistic alternative opportunity that could enable one to have the flexibility to make such a decision.

Type of Cash Auctions Available: I would like to take a moment to give you a basic overview of the three type of auctions available to attend depending on your credentials. The most common cash auctions most individuals are aware of are Public auto auctions and/or Police-Gov't Auctions.

These auctions are open to the public, usually they charge you an entrance fee to enter and once you're in the facility they explain the rules of what you can and can't do. Overall public auctions are fine if you have mid to expert level mechanical experience because most of the vehicles you will find at these auctions will have some sort of mechanical issue that would be noticeable by an average consumer inspecting and test driving the vehicle. Also a higher percentage of these vehicles are dealer left overs that they are unable to sale on their car lot for many different reasons. So they take these type of vehicles to a public sale due to most or all of these sales advocate buyer beware, vehicle is being sold as is, you win the auction bid the car is yours no exceptions. In addition these auctions you are unable to test drive the inventory prior to the sale so your risk of buying a vehicle with issues drastically increase since you are unable to fully inspect before you buy. Most people I come across attend these auctions for the chance to find something they can turn around and sell for profit. Unfortunately what ends up happening most times is once the vehicle is purchased the amount of money needed to get the vehicle ready for sale will drastically cut into their profit margin. The next type of cash auction is what I call the hybrid auctions.

These auctions are where you will find dealers and public buyers at the same sale. These auctions have some similar features to the public sale but at this level you will find better quality vehicles. You will still find the dealer left overs, but addition to those type of vehicles you will also find franchise dealer trade in's, repossessed vehicles, and end of lease vehicles. What makes this auctions slightly different from the regular public auctions are individuals who are actual car dealers are attempting to buy this vehicle selections with the ability to test drive and fully inspect the inventory available prior to sales time. The prices are more closer to actual wholesale price where as vehicles at the public sale tend to stay close to actual retail price. The public are allowed to enter some of these type of auctions but they still have to pay an entrance fee. A dealer can enter free of charge. AS stated previously the quality of vehicles are much better because those companies sending their inventory to this auction to sale can't hide the flaws of the vehicles since buying dealers are able to fully inspect the inventory. Unfortunately the public buyer isn't able to do so but one advantage is a public buyer can pay a dealer at these type of auctions do inspect the vehicle of their choice on their behalf. The third type of cash auction is what is call a fully operational dealer auction. This type of auction the public isn't allowed in at all. This is a dealer only auction made primary for those dealers who have established car lots and need multiple inventory priced at or below wholesale price in order to fill their sales inventory. You see a few of these on TV if you ever came across shows such as Dallas car sharks. At these cash auctions you need a dealer or broker license similar to hybrid auctions. But the difference at these auctions the quality of the majority of vehicles are usually in good condition. You will find some auction inventory that's questionable but having full access to inspect and test drive all the inventory it's easy to avoid the bad apple pics unless you are the type of dealer that focus on finding inventory in need of repair which at these auctions you can find vehicles pennies on the dollar. The most popular auctions relating to pure dealer sales are Manhiem and Adesa. You can find either or both of these auctions in every US state and a few international locations. Now that you have a basic overview of the three type of cash car auctions available I"m sure your next question is; how can I get into the hybrid and/or private dealer auction as a dealer and not just as a regular public buyer? Good question let me once again give you the options and explain the most economical option if you have the opportunity to find a good setup.

The 3 most common ways to buy wholesale priced vehicles. If you want to have full capability to inspect, test drive, and purchase wholesale vehicles here are the 3 most common ways. 1st option: Becoming an actual dealer: This route involves going out and obtaining your own dealers license by heading to your local DMV and going through their multiple requirements, getting a lot for your vehicles including a store front, insurance, bond, attending a dealer's class and so on. Most people are aware of these step but they also know it's very expensive to complete these task which is the #1 reason why most individuals don't even get started because unfortunately it just isn't feasible for most individuals living paycheck to paycheck. 2nd option: Becoming an auto broker: This is something new to the auction industry where some states allow individuals to get a broker dealer license where they can have access to either hybrid or private dealer auctions as an full fledged broker-dealer. This is cheaper then having to go though all the ropes of a full fledged dealer, but there are still fees involved, including but not limited to paying for the broker licenses, attending the dealer class, required to have a broker office, bond, and insurance. Some of the steps are similar to the dealer license setup but as stated it's cheaper. There are many companies online that claim they can help with the process and it's true they can but what they are not telling you is all the fee's involved especially if your credit isn't good. Also at the end of the process when you do complete all the task, the broker license you receive is a wholesale license which simply means you can't sell your inventory to the public, you can only sell your vehicles to other auctions, brokers, and/or export. You can still make decent money selling this way during certain times of the year but the real money is being able to sell to the public for retail price. To be able to do this you still need a fully licensed dealer in order to sell retails which is another story in itself and unfortunately outside the scope of this blog. 3rd option: Becoming a buyer agent for a fully licensed dealer. This last option is where I would like to explain in more details because this will hit home in my opinion for most individuals looking to get into this industry on a limited income, fair to bad credit, or, lack of knowledge and experience on how to buy at auctions and sell properly to customers. The majority of people I meet usually fall in this last category. So when asked how can i get into this industry 90% of the time I tell individuals this is the way to go. Let me explain why. If you do your research properly you can locate companies that won't mind bringing in inexperience individuals wanting to buy wholesale vehicle in order to make money. Most companies will usually charge you an upfront fee to register you with the auctions. A flat monthly fee in order to utilize their dealer license and usually a documentation fee in order to be able to sell your vehicle to the public. When you look at these fee's compared to obtaining a dealers license or a broker license this avenue by far is more economical. In addition some of these companies will also train you and/or give you guidance on how to buy at auctions without having to lose all your money making mistakes. Your paperwork is also handled by these companies so you don't have to worry about figuring out any new State or local sales and tax laws. Just like with the broker-dealer license where you can locate companies that will help you setup the process, going the route of becoming a buying agent representative for a company you need to complete your due diligence and make sure you can get the support you need to get started. The training aspect of this type of setup in my opinion is the most important factor. You may come across many small to large companies offering this program. All I would say is be careful to make sure especially if you need to pay upfront that you are getting all the services they claim to offer. To sum this up if you are new to the auction industry, someone who buys and sell on the side by getting their inventory through public auctions or private seller on craigslist that needs repair before you can sell for profit, or someone who started the process of obtaining a dealer license but couldn't complete the process due to financial reasons. Going the route of becoming a buyer under someone else's dealer license would be a wise choice to start. Most companies average startup cost range between $300 to $500 to get registered. Most will have monthly fee's included within the setup, don't forget about any extra fee's relating to documentation which should be reasonable around $100 to $150 per vehicle. A few may also require a percentage of your sale's profit but I would recommend if you come across this situation avoid them and find someone else.

Finally I know you might be asking how do I go about locating these dealer's that would consider bringing me in as a buyer. This is an excellent question so let me give you two basic ways to accomplish this step.

Finding That Dealer and/or Company to gain access to cash auctions:

1st Option: Go on your local Craigslist if you are located in a larger city such as Atlanta, Dallas, Los Angeles, Chicago, ect...., If you're in a more rural area apply my first suggestion by looking in the larger cities Craigslist section . Go to the service section on Craigslist in particular the automotive section and simply type in auctions. You may find a few dealers or companies advertising they can give you access to private dealer auctions. Now one side warning I would go with local dealers first for a few reason such as receiving hands on training and having someone you can physically visit if you need added support. On the other hand if you are unable to locate local dealers or just in a remote area then locating companies online would be the alternative. So you won’t get mislead when you begin making phone calls to various companies the name of the program is call auction co-buyer. It's similar to a buyer agent under a local dealer in your area but usually comes with additional fee's. Either way both options are still more economical then having to obtain a dealer or broker license.

2nd Option: This is the action I did 16yrs ago when I first got stared in this business and it's still valid today. Every state has a dealer auction called Manheim or Adesa. These auction houses are the largest wholesale auctions in the country. You can physically go to one of these locations during their off day, meaning when they are not running a sale that day. Actually you want to go the day before they have a sale. Look presentable. doesn't have to be extremely casual. Just look neat and clean. When you go the day before the sale you will encounter multiple dealers coming into the building because they are all there doing their vehicle inspections to prepare for the next day's sale. You can simply walk up to a dealer and plainly say. I'm very interested in becoming an auction buyer and I'm looking for someone like yourself that possibly can take me under their wing and teach me the ropes and bring me in. Yes this might be uncomfortable for you if you're not a people person like I was 16yrs ago but, when I made that decision to step outside the box and go for it. It changed my life from that point forward.

Bonus Information: When you attend any auctions as a dealer or public buyer there are two main tools you should have in order to be able to inspect your selections as quickly and efficiently as possible. You can also click on the images provided to get more details and prices.

Battery Jump Box: The jump box image provided is one of the most common utlilized by tow services companies and professional auction dealers such as myself.

Most will tell you go to Walmart or similar consumer store to purchase at a cheaper price. I say it's not a good idea. My recommendation, head to an auto store such as Pep boys or auto zone and pick up a professional jump box. If you buy a jump box from Walmart, Target, or similar store most often after four to five jumps the box usually runs low on power and becomes useless unless you are able to plug up the box which is impossible at an auction when you are nowhere near an electrical outlet.

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With a professional box you will have a longer lasting charge especially if you are attempting to jump start larger vehicle such as 4x4 trucks or larger SUV. If you want to save money I have some selection on our online store you can purchase for a competitive price. This tool will be key in helping with your inspection process because most auctions you attend if the car won't start due to a dead battery it's extremely difficult to find staff at the auction that will assist with jump starting the vehicle and after a while it's simply inconvenient if you have to keep locating someone to assist you.

ODBII Code Reader: The image I provided is what this device looks like if your're not familiar with the item. This device scan's check engine light codes on vehicles. When you attend auctions, especially public auctions I'll guarantee you will encounter multiple vehicles that will have a check engine light on. Now in most cases it may not be the engine that's the issue, it could simply be a oxygen sense, EGR value issue, air flow issues, or, a few other common issues known to set off the dreaded check engine light. If you don't' have a code reader available you will not know what exactly is causing the code to display and it can cause a make or break deal. You may pass on a vehicle because of a check engine light and the issue could be minor if you knew exactly what the codes represented.

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On the other hand not having a code reader available can cause an opposite result. You don't have the code reader and you look over the vehicle and it seems the engine is fine but the codes the reader could discover can be an issue with the vehicles transmissions. If you recall as a public buyer you are unable to test drive the cars so you won't know if the transmission is good or not. If you bid and win the auction on the vehicle and discover afterwards the vehicle isn't moving due to a bad transmission you are stuck. I've seen this happen to many buyer unprepared especially at public auction sales. Always remember to have these two tools available every time you plan on heading to an auction sale.

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