October 27, 2008
There are many benefits for credit unions that choose to represent themselves at auto auctions. However, the credit unions that are the most successful are the ones that are familiar with the auto auction sales process. Below is a list of 7 key items from Manheim’s Auction Handbook to ensure that your credit union is making the most of your auto auction opportunities:
1. Reserve Run Times
As early as possible, contact the auction regarding times that you would like your vehicles to run. Buyers are more likely to purchase vehicles earlier in the day because that is when they have more funds. Contact dealers beforehand to let them know when you will be running your vehicles.
2. Post Cars on Auction Website Before Sale for Maximum Exposure
Most buyers will check the auction’s website for specific vehicles that they are looking for before they attend the auction. Having your vehicles available to inspect on the auction’s website may ensure increased attendance and sales.
3. Do Cosmetic and Mechanical Reconditioning to Increase Number of Buyers and Bids
First impressions are extremely important in vehicle purchasing. Minor investments in reconditioning can result in a large increase in a vehicle’s final sale price.
4. Be Honest About Condition
By disclosing the full condition of a vehicle, you are ensuring that your buyers feel confident in purchasing from you and will continue to purchase vehicles from you in the future.
5. Set Realistic Floor Price/Use “If” Sales
If your floor prices aren’t met on a consistent basis, bidders will stop coming to your lane because they will consider bidding on your vehicles a waste of time. One option that you can use if you aren’t able to reach your target floor price is an “If” sale. An “If” sale occurs when your floor price hasn’t been met, but a buyer wants to make an offer on a vehicle once it has left the lanes. The buyer tells the auction staff of their bid and it is given to the seller.
6. Be on the Block When Your Cars Run
A general rule in auctions is that when sellers are on the block, their vehicles usually bring in more money. By being there, you are able to talk with buyers and give them assurance on the condition of a vehicle. In addition, you can authorize the auctioneer to change the floor price based on the bidding environment.
7. Become a Regular Participant at an Auction to Develop a Good Reputation and Strong Following Among Buyers
Buyers are more likely to stop by your lane and purchase vehicles if they see you at the auction on a regular basis. Furthermore, auctions will give you better time and lane placements if you go to the auction consistently. Some credit unions run in-house auctions as well. The benefit of these types of auctions is that the credit union has an opportunity to have the purchaser finance the car through the credit union.
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