Auction vs Stock

Auction vs Stock

Auction vs Stock


Planning to buy a used car, but have no idea to buy from where, which one is best buying through an auction or a stock?

If you take advice from others, there will be mix suggestions some will tell you to buy from an Auction or some from Stock, and this will leave you with many confusion and question marks.

Here is answers of all your queries, we are going to discuss about what are the pros and cons of buying a used car from an auto auction or from a stock, at the end of the article you will have your clear choice for buying your car.

The very first thing is to have some information regarding an auto auction, so let’s know what is an auto auction and how they work?

An auto auction is a process of buying and selling items by offering them up for bid, taking bids, then selling them to the highest bidder. 


Auction Process:

Auto Auction have a preview period, which may occur the day before the auction and/or in the hours leading up to the start of the auction, It gives every buyer a chance to look around at what's for sale, one can verify an item's condition and make notes on what to bid on. The preview times will appear in auction schedule. While you are at the preview, you can reserve a seat and register for the auction in advance if you wish.


What are the advantages, when you buy a car from an auction? 

  • An Auto auction is place where you can have various models and brands you desire to buy at one place.

  • The second thing is the cars in auction are available at an affordable price, you can choose a car which suits to your budget.

  • Buying from auction make you feel that you are having a fresh car, because the cars are listed at regular interval.

  • If you are admirer of vintage and classic cars, then auction is good place to buy them.

  • Buying from auction provides you detailed information regarding the condition of the car you are going to purchase.

  • Cars listed in auction are verified, as they go through proper inspection and their odometer readings are real so you know the real mileage of the vehicle.

  • There is surety against fraud because all those involved in used cars auction and in export process are accountable and the market in overall is trustworthy, so your investment will be safe here.


These are some advantages of buying a used car from an auction, but it not that there is no minus points like every other thing it also has some drawbacks:

  • Buying cars from auction are cheap because they are usually repossessed or confiscated cars. It may be possible that second-hand cars sold can also not be second hand at all, but third hand, fourth hand and so on.

  • Many cars auctioned are not of good mechanical condition. Some of them are just refurbished and made to look good and functional during the auction but when the buyer finally use the cars, flaws and damages would start appearing.

  • The cars on the auction do not have warranties and insurance coverage, not unlike their counterparts sold at traditional and formal dealers and distributors.

  • There is a possibility that you may be acquiring a hot car or a vehicle that has been illegally smuggled into the country or has been stolen and then sold to the market. You may have troubles over the car’s ownership in the future.


Know Dealer Stock

A car dealership or vehicle local distribution is a business that sells new or used cars at the retail level, based on a dealership contract with an automaker or its sales subsidiary.


Advantages of buying a car from dealer stock: 

  • The car is front of you, so you can check the car physically and have full satisfaction about the car.

  • The price is fixed at dealer stock, and  there is no need to calculate a bidding figure, often also the car is sold as FOB, so there is no need to calculate the commission as well.

  • There are usually more pictures than available on the auction homepages.


Disadvantages of buying from a dealers stock:

  • There is no certainty in purchasing a car from dealer stock because no dealer is going to give a 100 percent honest explanation about the vehicle, it will be bias.

  • It doesn’t matter how nice the dealer is, he is going to give only good points towards this vehicle. His stock is always "good" stock, even if it was a grade 3 or a grade R when purchased from the auctions.

  • Unlike an auction, there is no "independent" appraisal of the vehicle, you have to trust dealers word.

  • Dealers not mention the faults of the vehicle in the auction sheet even though they know about them.

  • Price: It is the most important factor, for a dealer to buy a car and sell in stock, there is a larger risk than purchasing in the auctions on order, There is a possibility that the car will not sell from his stock, he doesn't want that. Higher risk must be equal to higher returns, the dealer's / exporter needs to add value, not just commission to make this extra risk worthwhile.  That is why a dealer's / exporter's stock is more expensive than buying directly from the auctions.

  • Often this adds up to $100s even $1000s of dollars difference between buying from the auctions or buying from stock.

Now you are with all the pros and cons related with buying a car through both of the mediums, and now you can better decide which one to choose, comparing them help you to decide best one. 


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