5 tips for profiting from car auctions

Well, as for the value, let's explain.

Generally, bids require payment in cash – this already reduces competition for buyers.

Read Tamgood – Quick guide to save money and buy a car in cash!

Afterwards, auctions tend to take place far from dealerships and this further reduces competition.

Finally, the vehicles may have some faults, which makes the price even lower.

This explains the fact that many of those interested in purchasing at auctions are car dealers, as well as parking lot owners or car mechanics.

They look for opportunities – to pay less for a good that is worth more.

The answer then is: yes, it is possible to make money from car auctions.

The car auction – who auctions?

Generally, it is banks that hold car auctions – and also houses.

You will hear about Caixa Econômica Federal, Bank of Brazil, Bradesco and also in bodies such as IRS It is DMV.

Traditionally, the auctioneer publishes the conditions of the sale in a catalog (which today are called notices).

This happens after the lots are announced.

This notice will contain all the important information about the auction – such as minimum bid values, final dates, payment methods, types of products, faults, conditions.

Just so you know, a lot is a set made up of more than one good that will be auctioned.

With the internet, everything has become clearer, more transparent and also more competitive.

Therefore, throughout the article, we will mention several tips so you don't make mistakes when choosing a good auction, which will not have the opposite effect.

The car auction – practical example?

We created a very practical and basic example to help you do the math when buying a car at auction. Check out!

On any auction site on the internet, we take the example of the following car:

– Palio ELX 1.0 8V Flex 4 doors 2008/2009.

At Fipe table, its value is 21,672.00.

So, let's do the math:

• Auction expenses: 700.00
• Aesthetic expenses: 420.00 (2 used tires and polishing)
• Mechanical expenses: 200.00 (including oil change)

Total expenses: 1,320.00

read Now – 10 tips for car maintenance!

So we can see how much another car of the same type is selling for on everyday websites like OLX, Webengines and others. You can also use websites and newspapers.

In these searches, we found values ranging between 21,500.00 and 23,500.00.

So, let's keep it low. Suppose we sell the car for 20,500.00.

And let's think about a profit of 2 thousand reais.

Therefore, the math is easy: the total cost of the vehicle should not be more than 18,500.00.

Now, we remove the 1,320.00 from expenses and the 5% that the auction charges in commission. So, we ended up like this:

• 500.00 value for sale,
• 320.00 of total expenses,
• 300.00 maximum bid limit,
• 815.00 will be the value of the auctioneer's commission.

In this example, the maximum value to purchase the good is 16,300.00 and nothing more.

This is just one example of how you can make money with car auction.

However, we can consider other values, both for resale, maintenance or bidding.

5 tips for making money from car auctions

There are several precautions to take when choosing an auction, regardless of what is being sold.

Let's consider the main ones.

1 – Discover the auctions

Before entering auctions and placing your bids, attend one.

If it's in person, go to it on a day when goods will be auctioned.

If it's online, participate to understand how everything works.

2 – Consider analyzing the goods

At the in-person auction, it is possible to check the goods that will be sold.

Therefore, it is possible to check its general condition – to know if it is worth it.

In the case of vehicles, it is important to have an inspection carried out by an automotive professional, such as mechanics.

But, if it's an online auction, try to see everything through the notice.

The faults and details must be listed there.

Some platforms even allow interested parties to visit the place that is housing the car before bidding closes.

3 – The notice is everything

In all cases, consider reading the notice in full.

This is where all the details and all the important rules for the acquisition will be found.

This includes: fees, dates, payment methods, among others.

4 – Have financial control

This is important and it doesn't necessarily have to do with the auction, but with you.

The idea is this: know what your limit is for buying a car at auction.

It is from this that you will consider the offers and not be carried away by the emotion of the moment.

Exaggerated or unplanned consumption can cost you dearly, okay?

5 – Know the market value

Before placing your bid, consider the market value of the property.

This will be very important for you to make money from vehicle auctions.

Of course it won't be everything, but it's a good start.

Therefore, you will evaluate whether it could be a good deal or not.

To do this, use the FIPE automobile table, which shows an average value of vehicles, depending on their characteristics.

With information on profiting from auctions, living from auctions and car auctions

Conclusion