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Are
Online Car Auctions A Waste
Of Time Or A Hidden Gold Mine?
Which is the better
bargain, "site unseen" online auctions like eBay,
or the dealer only wholesale auctions?
To find out if there is money to
be made selling cars through Internet online auctions I am going to test the
market by selling 20 cars ranging in price from $2000 up to $100,000 + through eBay.
Of the 20 cars I will try to cover as many different models as possible from an
economy subcompact import to a luxury or "high-end" car.
To give our eBay / dealer only
wholesale auction price comparison a fair chance I will list all 20 cars through
eBay and will continue to at a rate of 1 or 2 a week until I loose money on all
20 cars or a total of $20,000 (which ever comes first). I'm saving the
"high-end" car for last, I think it will be either a 1989 Porsche 911
Turbo Factory Slant nose Cabriolet or a 1987 Ferrari Testarossa.
To accurately get a feel for the
online used car market we need to keep as many variables as possible the same
for all 20 cars.
1. I will use eBay
to list all 20 cars. eBay is the largest
online auction source with the most buyers (and sellers). As of writing this eBay
has 989 cars for sale, I found car listings for a rusted
"clunker" with a high bid of $47 to a "very sweet" Ferrari
F50 for $750,000.00. This looks interesting, I am starting to get excited!
2. I will post pictures of each
car. This is the only way the buyer can see what they are bidding on so the more
the better.
3. I will only list cars that are
mechanically sound and will provide a short term (90 days or less)
warranty/guarantee to reassure the purchaser of the cars excellent mechanical
condition and clean/clear title.
4. I will disclose everything
about each car. I will post each VIN# so anyone can run a CarFax
(vehicle title/history search). I will also run a CarFax
and post the results (for those that are lazy) on a link (URL) that I will list
in each auction for additional pictures and information. I am not going to hide
anything about these cars, we want the results of the this market comparison to
reflect the true value of the online eBay market and then determine if it is
worth pursuing.
5. All cars will be listed with
NO RESERVE (no minimum bid). If the highest bid is $1 I am prepared to accept
the loss and sell it for that amount. I will NOT have anyone bid up the
price of the car or manipulate any of these auctions, the purpose of this
comparison is to find out if there is a market for making money by selling (or
buying, we will cover that later) cars through eBay.
Making a profit is not our goal at this time, if the eBay
online car market looks strong we will focus on making $$$ after we "test
the waters" with these first 6 deals.
6. The final determination of the
selling price will not be considered an accurate reflection of the market
until we have been paid in full and the deal is final. I have heard there is a
large percentage of people on eBay who will bid on an item and never follow
through with the actual purchase. If this happens the car will be re-listed and
the final value will be determined from an actual sale.
BIDS MEAN NOTHING UNTIL
THE MONEY CHANGES HANDS AND THE DEAL IS COMPLETE!!!
Our first auction listing is a
1988 2 Dr. Honda Civic with 116,500 miles. I bought it a while back and let a
friend borrow it, I forgot I owned it (woops). I can say it won't hurt
too much if I lose money on this one LOL :). I will post the receipt of
what I paid for the car at the dealer only auction and how much I made or lost
after the auction has ended. I do not want it to influence or disrupt the actual
bidding process... Remember, we are doing this LIVE! The
bidding activity has been slow with 14 bids and a current high bid of $1397.00
(to low). This car would retail for around $3000 - $3500 at my dealership.
I have noticed most of the bidding activity happens in the last 15 minutes of
the auction.
eBay, Success Or Failure?
If prices are "high" on
eBay we will buy cars at the dealer auctions and sell them on eBay. If the
prices are "low" on eBay we will know we can make money by doing the
opposite, buying cars on eBay and selling them at the dealer auctions! It
really does not matter. Our purpose is to find out exactly how the online car
auction market compares in value to the wholesale dealer only auctions and use
the difference between the two markets to make $$$. Any Questions? I will
go into depth about this after our market comparison is over.
"As I bought and sold my first few cars without
any guidance or help, sometimes I made money,
other times I made mistakes. Whenever I made a
mistake, I learned from it. Now as I look back, I
can see that while I made a little money on those
first few good deals, the knowledge I gained from
the bad deals has made me far more."
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