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Learn All About These 7 Types of Online Car Auctions: An Insider Guide
Read all about car auctions, their different types and the bidding process to start buying cars with convenience and at incredible prices!
Are you looking to expand your dealership's inventory by participating in online car auctions? Perhaps you're looking for reliable vehicles at wholesale prices to cater to your customers. If any of these scenarios resonate, the solution might be a few clicks away in the world of car auctions tailored for used car dealers.
In this blog post, we'll delve into what online car auctions entail, which types of car auctions are available to dealers, and the entire process of bidding for cars on the eCarsTrade platform.
So, fasten your seatbelts - it's time to discover the secrets of acquiring inventory through online auctions!
What Are Car Auctions?
Online car auctions offer a straightforward and convenient way for used car dealers to source vehicles from the comfort of their offices. These auctions are platforms where sellers list their vehicles, and dealers can browse the inventory and place bids.
Car auctions are not a new concept - they’ve been around for almost as long as cars have. However, their official beginning as an institutionalized sales channel happened in the 1950s with a small British company, founded by David Wickins, who discovered that private buyers (and later car dealers) jumped at the opportunity to buy cars at reduced prices. The company soon grew into an international empire, and more companies followed the trend, seeing value in this mode of doing business.
The rise in popularity of online car auctions in recent years comes from their efficiency and convenience, especially beneficial for used car dealers.
In fact, the largest leap in popularity for this type of used car sales happened in 2020, when auction sales accounted for 18.9% of the remarketing and leasing market, compared to 7.5% in the previous year.
Illustration: eCarsTrade / Data: FleetNews
Offering cars at reduced wholesale prices compared to traditional channels, online auctions often feature used cars from a variety of sources, such as ex-lease or privately owned cars. Ex-leased vehicles are always meticulously serviced and can be covered by their original brand warranty, depending on how old they are.
The process is straightforward: dealers join the auction, search for specific makes and models or explore the array of available cars, submit bids within the designated timeframe, and wait for the results to see if they won.
Choosing to source vehicles through an online auction carries numerous advantages for used car dealers. Convenience tops the list, allowing dealers to shop from the comfort of their offices, compare various models and prices, and access pricing guides to determine fair market values.
Discounted wholesale prices, often below market value, enhance the appeal of online auctions. Additionally, reputable auction providers maintain transparency throughout the transaction, empowering dealers to track their progress seamlessly.
In summary, online auctions offer many benefits - convenience, affordability, and transparency - making them an enticing choice for used car dealers in search of their next batch of inventory.
Different Types of Car Auctions
Now that we’ve covered the basics, let’s take a closer look at the different types of auctions.
This will help you understand some different ways to source cars through eCarsTrade auctions and provide you with the knowledge you need to choose the type best suited to your needs.
First, let’s explain the types of auctions according to the audience.
► PROFESSIONAL & PUBLIC AUCTIONS
With regard to audiences, there are two basic kinds of car auctions. One is intended for private buyers and is commonly referred to as public auctions.
The other type is intended for automotive professionals, and car dealers who visit auctions to stock their lots with quality, reasonably priced cars.
As a private buyer, you can visit any public auction in your area, but there will often be a registration process and a joining fee, after which buyers are free to participate and bid on any car that catches their eye.
One word of caution, automotive professionals often warn buyers to be careful at public auctions. In many cases, buyers don’t get to fully inspect cars and their documentation before the bidding begins. Also, it’s not unusual for buyers to get absorbed in the fast-paced bidding process and end up overpaying for their car.
Professional car auctions, on the other hand, are a very common and safe sales practice.
Participants need to be licensed car dealers to join. Since car deačers are always looking to participate in auctions more frequently (whenever they need new cars for their lot) auctioneers need to be honest about the state and available documentation for the car, as well as keep prices fair.
If you’re a used car dealer, professional car auctions should be a part of your strategy for sourcing cars because they will allow you to get a good markup while keeping your customers happy.
Along with audiences, we can also divide car auctions according to where they take place.
► PHYSICAL & ONLINE AUCTIONS
Despite the advancement of the digital age, many dealers still prefer physical auction that take place at auction sites in the real world.
Physical auctions allow buyers to get close to the cars they’re interested in and inspect them to confirm they’re in as good condition as advertised. In addition, since on-site auctions are more difficult to enter than simply navigating to an online resource, dealers often have the experience that competition is lighter with this kind of auction.
Physical car auctions still attract great crowds of buyers
Let’s take a look at some of the main benefits of online car auctions:
- A vast selection of cars to pick from as the cars don’t need to be on-site to be sold.
- A quick purchasing process for dealers who can buy cars from the comfort of their office, without having to travel to auction sites.
- Increased safety as online auction platform offer secure payments, data protection, and helpful staff that can support buyers during their entire customer journey.
- Continued support from the moment of purchase to the moment of collection.
At eCarsTrade, we are able to offer clear information sheets, extensive photo galleries for each car, and meticulous documentation, including a full service history that guarantees mileage and vouches for the car’s condition.
Every bit of information you need to make the right purchase eCarsTrade
Within the categories we outlined here, there are several sub-types of auctions regarding the bidding process. We’ll explain those next.
► OPEN AUCTIONS, BLIND AUCTIONS & FIXED PRICES
As we already said, auctioning is a process where buyers hand in their bids for cars they’re interested in and then wait for the results to see if their bid was the highest for a specific automobile.
OPEN AUCTIONS
In Open auctions, the current highest bid is shown to every buyer so that they can easily out-bid them by just offering a slightly higher bid.
That means that your chances to win the car are really high as long as you’re willing to keep your bids high. Keep in mind that the car is not automatically yours if the auction ended and your bid was the highest.
Why? The seller still retains the right to decide if your winning bid was acceptable for them or not.
In Open auctions, you are not able to cancel your bids so you have to be sure you’re able to pay for the vehicle. Follow the auction until the very end to make sure other traders don’t outbid you.
In Open auctions, the current highest bid is visible to all participants
BLIND AUCTIONS
Most eCarsTrade auctions are Blind auctions. In Blind auctions, as the name implies it, you are not able to see the current bid.This might seem like a drawback but it can actually be a way to secure some incredible deals. Think about it, at this kind of auction you can place a low bid without other participants knowing about it.
In an online setting, where there are thousands of cars available, the car you’re bidding on might be overlooked by other buyers or seem too pricy for their budget and they may decide against bidding. After a couple of days of waiting, the car could be yours at well under the market price!
Of course, the auctioneer will usually set the minimum bid ahead of the auction so you won’t be able to enter the auction with a very small amount of money.
At eCarsTrade, we recommend a minimum bid as well as an estimation price to give buyers a fair chance at securing their vehicles. On top of that, we also calculate your chances of winning the bid so you can make a more informed decision about how much you should bid. If there is no mention of estimated bids, we can calculate it for you on demand. Unlike Open auctions, you are able to change your bids as long as the auction is ongoing.
If you’re looking for low risk and a wealth of opportunities, Blind auctions are for you
FIXED PRICES
Finally, some auction platforms (eCarstrade included) will also offer cars for Fixed prices. This means a set price will be given to the car being sold and buyers can only purchase the car if they’re willing to meet the seller’s price.
Fixed prices are a great way to start if you’re still nervous about placing bids in auctions. You simply click on “Buy now” if you're ready to purchase the car for the displayed price.
And with that, we’ve covered the basic types of car auctions. You should now have a better idea of what type of auction best meets your dealership needs, so all that’s left is to explain how the process of buying a car in an auction works in more detail.
How to Bid on Cars on eCarsTrade
eCarsTrade is an online car auction platform that’s open exclusively to professional car traders.
In order to participate in our great deals, you’ll need to register on our site and provide a copy of your company’s documents with information such as the company name, address, VAT number and name of the owner, along with a copy of the owner’s ID or passport.
We need your company information to verify your status as a car trader.
Register on eCarsTrade in just a few steps
You’ll also need to pay a one time deposit as a guarantee on your purchasing ability. This deposit gives you access to unlimited bids and can be returned to you at any time should you wish to cancel your membership.
After this easy registration process, you’ll have our entire stock of thousands of cars right at your fingertips so you can start buying and bidding on the cars that are right for your dealership.
Depending on your buying frequency, you’ll also be assigned Silver or Gold status. Our Gold members have unlimited bidding available, as well as a more comfortable payment window and reduced commission on the cars they buy. To become a Gold member, you’ll need to buy at least five cars per month from our selection.
The bidding process itself is very user friendly. Just use our handy search bar to look up car makes and models you’re interested in and choose the auction type that best fits your needs.
The eCarsTrade search bar let’s you find the perfect car quicker than ever
With the right cars selected, you can go ahead and place your bid. On every bidding page, you’ll see a timer that will tell you how long until the auction is closed.
When the auction closes, and if you were the one who placed the winning bid, you’ll be notified by email that you’re the auction winner with payment details. If you didn't win the car, you won't receive an email but you can see the status of your bid on your Personal Page within 24-48h from the end of the auction.
We transport the car to our lot in Belgium where you can collect the car or we can arrange delivery to you, provided your location is reachable by truck transport.
All cars sold on eCarsTrade are first transported to our warehouse because that gives us the opportunity to make a full inspection and verify that the car is in the advertised condition.
We’ve spent a lot of time perfecting our auctioning process to ensure it’s as smooth and seamless as possible for our customers. For any additional questions, you can refer to our FAQ section or contact our sales team who are always at your disposal.
Elevate Your Stock With Auctioned Vehicles at eCarsTrade
We hope this article has given you all the knowledge you need to find success at auctions as a used car dealer. With a better understanding of what car auctions are, how they work, and the different types available to savvy buyers, you’re perfectly positioned to start sourcing quality cars at reduced prices and selling them at a good markup.
If you haven’t already, sign up for a free account on eCarsTrade and enter the exciting world of car auctions.
