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A dealer auto auction is an auction primarily used by car dealers, as they are generally closed to the public, however in rare cases the public do have access to some dealer auctions which is not widely known nor is it publicized, I will talk more about this later.
Firstly what is a dealer auto auction? Potential bidders are normally car dealers who are required to show their business identification or text number prior to registering as a bidder at the auction. Bidders can not just walk in off the street nor do they have access to the dealer auto auction, instead however they must show tangible proof that they themselves own and or work for a car dealership. Unless they provide this information as proof they will be promptly escorted from the auction site. This precaution helps to keep the dealer auto auction only for car dealers, the stocking of their dealerships and closed to the general public.
The public is normally not aware of these dealer auctions and thus have no idea just how cheaply car dealerships are acquiring their stock of vehicles. The dealer auto auction is a place that is just for car dealers and one of the ways for a dealership to maximize it's profits by purchasing a vehicle at far lower than normal trade or trade-in cost. Car Manufacturers usually charge the dealership large amounts of money to buy direct from themselves, which in turn increases the end user purchase price. When car dealers only purchase from the manufacturer it means little to no movement on sale price and often losses for the car dealer and his or her dealership.
The cars purchased from a dealer auto auction are of good quality for far below cost prices, sometimes there is a price difference of over 50%, this is great news for the car buying public because buyer now has more room to haggle with the dealer which increases the chances of larger discounts on the purchase price. In addition, as the dealer did not pay a premium price for the car if it does not sell in a reasonable time period the price can be lowered without impacting on the bottom line of the dealership, generally large profits are still acquired even with the price reduced.
Even though these auctions are not open to the general public they are a very helpful to getting big discounts on your car and in helping dealerships make their money. I mean think about it, car dealership owners do have to pay for some fairly elaborate business expenses, it is only fair that they make some decent money to cover overheads right? Overall a dealer auto auction is a win for all parties. The cheaper the dealer can obtain the car the more room they have to move on price.
In some rare cases a dealer auto auction can be accessed by the public. These car auctions are not publicized nor are they advertised in any way and the information on their whereabouts is not easily accessed but can be found if you dig deep enough.
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Source: http://ezinearticles.com/?Gaining-Access-to-a-Dealer-Auto-Auction&id=2285829
