“Are you loaned some, tonight?” – Elvis Presley. “What the world needs now is love, sweet love” – Tupak Shakur. “Chillin’ by the fire while we are eating fondue” – Justin Bieber.
Which of these lyrics were actually sung by the artist? If you are over 25, you will instinctively know the dreadful truth.
Justin Bieber is lacking the knowledge that fondue sets come with built-in heaters. Fondue is molten cheese, ferrchrissakes. He will need to find a woman who is madder than a box of frogs to join him in eating that stuff in front of a fire. As a good way to ‘chill’, it compares only to ordering delivery of a Vindaloo curry while you sit in a broken down truck in the Syrian desert, wearing a Shetland wool pullover. Special knowledge is valuable.
Okay, tonight is the night I conclude this mini-series examining whether car auctions are the “Night Clubs for the over-25s” .
“Hang on…” I hear you say, “So far, this series of posts has been just a pile of disjointed rhetoric, short on worthwhile facts and reeking of bitterness.”
This is why I love you so much. You are smart, intelligent, good-looking and yet you still hang around here. Trust me – I shall tie all the threads together and you shall be witness to some genuinely valuable truths. I shall repay your trust. I’ll even include pictures of a cat, some slurp-inducing food I cooked and also, a Surrey Policeman caught in the act of not being “institutionally racist”. (actually, that one might be difficult to get hold of)
Just imagine for a moment that you are a Party-Planner to the celebrity ‘A’ – list top names. Your reputation is so high that even Madonna says “please” in a begging whine when she phones you and wants to book you. You are the Goddess or God of Uber-cool. You cannot even remember the last time that a car door wasn’t opened ahead of you before you had to reach for the door handle yourself.
Airlines always find a ‘special channel’ that you can walk through at Customs and Immigration so that you never have to put your shoes in a plastic tray while total strangers scan your heels for the tell-tale signs of dry skin.The in-flight hospitality caters for your preference for a stone-crushed basil dressing on your hand-knitted fresh egg pasta, brought directly to you this morning from North Dakota via Jet Blue in chilled stainless steel panniers.
Okay. Now consider that you actually need to work damn hard to pay your bills. You hate to waste your money. You seek the best value from it. Life is uncertain. You need the best advice. Information is only valuable if it is not common knowledge. Just like that top Party Planner uses their contacts and special knowledge to help other people spend their money on a good party, you have to do the same to save your money on a good car.
Below are some facts and figures that may be interesting to you. Over the previous posts, I have been trying to get you to feel comfortable about buying a car at an auction. Car auctions are coming of age. Like Google and YouTube before them, they are moving in from the sidelines of our lives and walking into the centre of the playing field. They are not just taking over the industry, they are about to engulf it and forever re-shape it. Look at the comparisons below for a ‘time-line comparison:
February 2004 Facebook was launched.
January 2009 Facebook was ranked as having the most users of any social networking site in the world.
January 2012 Facebook peaked in market value as the world’s most-used social website, less than 8 years after its inception.
In other words, within short 8 years, a brand new means of mass communication previously unknown to the world had risen to become a household name and a ‘normal’ means of communication.
Well, in the next five years, car auctions may well become the way that we all buy our cars. Dealers will simply handle servicing and delivery and sales of new cars. Auctions have been lurking in the background for decades. Serving the motor trade forecourts, they have quietly shifted cars back and forth, providing the dealers with the cars that they will sell on to you. Now, they’re removing the pretense. They are selling any car to anyone who turns up on the day. You do not have to be a dealer.
Now, data systems, particularly internet-based, have allowed the big car auction houses to monitor the service history and ownership and insurance details of cars that are leased or have hire-purchase or loans attached to them. That is a whole lot of cars. In the end, there is a high chance that these cars will turn up to the auction house. Some turn up several times throughout their life, as they pass from dealer to customer to dealer again.
America’s Mannheim Auctions are offering over 130,000 cars for sale across U.S. sites this week alone. They handled an average of one million vehicles each month throughout 2010 across all their world sites. Around six million cars are sold each year through them in the U.S. and despite their ‘traders only’ image, they are actually quite willing to serve private buyers. They just don’t shout about it.
BCA, Europe’s largest “re-marketing” and auction company is offering over 12,000 cars this week. Proportionately smaller but fast growing outlets across the whole of Continental Europe, BCA make no secret of their willingness to serve anyone who has a credit or debit card. You are most welcome.
Now, look at this link to the Wall Street Journal. The latest figures for new car sales in America. To save your head spinning with all the detailed figures, I will provide you with a simple synopsis:
Large American-made luxury cars are dead in the water, with luxury SUV’s following them into the surf, along with imported Japanese light trucks. Small and medium sized cars are keeping strong sales but mid-range imported cars are wobbling as America’s home-grown manufacturers slash prices and offer tasty incentives. Manufacturing output is largely stable, even though fuel prices are going up through the ceiling again.
The picture is broadly repeated for Western Europe. New car output total volume is still robust and sales incentives are keen but deceptive – dealers are wherever possible adding extras instead of cutting prices. So, despite the fact that we ordinary people have less money to spend, manufacturers are pumping out new cars. This is leading to over-supply.
And quietly, in the background, Mannheim and BCA are selling off all those manufacturer’s two, three and four year old cars at whatever they can get. The auction houses do not care what the actual price is – they earn their money by simply selling and getting the commission. The actual selling price is less of an issue to them. They don’t have many skilled staff, they don’t run production lines, don’t have factories or dealerships and they hardly spend at all on advertising. They simply find buyers for second-hand cars. They have acres and acres of those second-hand cars parked up, with more arriving by the hour. They cannot move for second-hand cars. Do I make myself clear? There is a strong case to argue that new car prices are being unrealistically propped up and that new cars are over-priced.
Auction houses particularly welcome private buyers because they make extra money from them. A private buyer will normally buy at a slightly higher price than a dealer and doesn’t qualify for the dealer’s discount for buying multiple vehicles.
So, with your new found confidence in strolling in to auction houses, it shouldn’t be too hard. You have learned how to ‘squint’ at paintwork, how to steal all the tips off dealers by watching them check over a car for you. You have learned that all the action at an auction really takes place out in the yard, where you can check over ‘your’ car to your heart’s content just so long as you have a keen eye.
You have learned to check your prices and exact specification in the press and online in advance and then compare that to the written description posted on the car’s windscreen. You have learned that you must be there when the car is started up to check for smoke and to pop your head under the bonnet.
What are you looking for? You are looking for the tell-tale signs of things having been disturbed: if someone has just put a new exhaust manifold on because the cylinder head has been removed or replaced, then their spanners will have left shiny marks on the bolts and nuts that secure everything in place. These are very hard to hide. Cross-head screws will glint silver in their centers, where the screw-driver chewed them. If the car has just had a new radiator, the radiator will look new but also the spanner marks will show on the bolts that hold it to the car. If everything is covered in dust, leaks will show up more easily through staining and soaked in wetness. If everything is squeaky clean, those nuts, bolts and screws will still reveal marks on them from sockets and spanners if they have been touched at all recently.
95% of cars at a big auction are of the same standard as any other second-hand car. The money you save in comparison to buying the car at a dealer can be used to solve problems you may encounter, like a poor battery, new brake pads. All things that a dealer won’t fix for free anyway.
Ah, I hear you say that it is risky buying from an auction and you don’t get a warranty. Really? Have you read the small print? Have you compared a dealer’s warranty on a second-hand car to the latest auction warranty and sales conditions? Most so-called ‘mechanical warranties’ available are almost worthless, excluding those items that are most likely to fail or else including them…except if their failure could be caused by a connected but uninsured item.
So, your hugely expensive ECU is included…except it isn’t actually, because it was connected to the battery when it failed and the battery is not included. At an auction, cars are either sold with a specific warranty or else without but you may be surprised: many auctions flat refuse to warrant cars over five years or under a certain price so you can pick up a perfectly good car for peanuts simply because a lack of warranty deterred others from taking a risk on bidding.
Ah, I hear you say that you cannot test drive a car at an auction. Well, in many cases you can and in general, it makes little difference whether you are watching the car being driven in front of you to the podium or driving it yourself. Cars suffer more from electrical problems than mechanical ones these days and 99% of those can be checked before you bid on them. Service history documents are often available to peruse at the counter on auction day and time exists to press buttons and check that warning lights go out or come on as they should.
Ah, I hear you say that the cars on a dealer’s forecourt are of a better quality. Are they? One or two might be, but the cars at an auction that are coming directly from a leasing company are mainly coming directly off the road. Nobody has the time or inclination to mess with their mileages or fake their service history. Many dealers do habitually mess with mileages and absolutely lie through their teeth about servicing histories. They simply put a sticker on the dashboard saying “mileage not warranted” and then dishonestly explain to you that “the law makes them do that to protect themselves”. It doesn’t. They are lying. At auction, cars have warranted mileage. Some don’t and they are specifically stated as such. Take your pick. Both ways, you pay less money and don’t have to suffer all the outrageous bull…
Ah, but some cars could be stolen or rebuilt after a crash. Nope. Established auction houses refuse “Stolen/Recovered” cars or those rebuilt after a serious insurance claim outright. They simply don’t want the ensuing problems and hassle. Occasionally one will come through but the auctioneer will make it absolutely clear that this is the case. Dealers put some of their forecourt cars in to the auctions because they cannot sell them and they buy others to replace them. It is called ‘rotating stock’. But even then, both that dealer and the auction are legally responsible for any dishonesty and neither want to run that risk. It simply isn’t worth it when you have thousands of cars to sell. Occasionally, we all get caught out and buy a ‘turkey’ from a private seller, a dealer or an auction. There is always that risk.
Ah, but my local dealer only sells selected, low-mileage, top quality second-hand cars. Right. Where does he get them all from? An endless queue of retired and suddenly disabled headmistresses and nurses, all of whom coincidentally decide to ring him and ask him if he’ll buy their car because he’s so damned honest?
Ah…
Car auctions really are the new Night Clubs. The environment is exciting and noisy. The atmosphere is charged but far more pleasant. There are quiet areas and noisy areas. Nobody ever gets off with a club DJ but the DJ can make their night. It is the same with auctioneers. Both car auctions and clubs are only ever fun for the first two hours. But a night club takes your money and gives you only memories, if that. An auction can give you a massive discount on a totally fine set of wheels.
Those twenty-odd seconds where you actually get to bid are always an amazing adrenaline rush. When the auctioneer cracks his hammer down as he nods his head to you, all that homework you did will have paid off and you will have saved yourself enough for quite a few vodkas or tequilas…or even a damn fine vacation.
my beloved cat, Biggs, checking out her world...
meatballs in an olive, anchovy and tomato sauce with parmesan. Drool...
Tags: BCA, celebrity, Elvis Presley, Justin Bieber, Mannheim, money-saving, Tupak Shakur
roadwax 