You might assume when you see your first auto auction that all those cars belong to the auction house.  For the most part, that is not generally true. Auction houses cannot predict the price for which a car will sell, so it is not in the interest of the auction house actually to purchase the cars it sells unless, of course, it already owns them.

Attending car auctions can be an eye opening process when you consider the synergy occurring between multiple business entities. Many parties are involved with the selling process including the various parties selling vehicles. Some auto auctions purchase cars from various entities and resell them to make a profit. Others allow the separate entities to sell the vehicles and charge a percentage of the sales price as compensation.

For example, your city’s police department may host an auto auction to rid themselves of old fleet vehicles, which would provide people with cars only from the police station. Another major auctioneer is the local car dealership. You have never seen the dealership turn down any “trade-in” toward another car. Once they get your trade-in, the dealership determines if the car can be resold on their own lot, be sold to another lot, or sold by the local auction house. The local auction house then processes the trade into the auction listing where other smaller dealerships and potential purchasers bid on the car. Lastly, the auction can sell your car if you’d like them too. More than likely, it’s going to cost you more than you’d like to spend, but you can do it. Your car is listed on the auction listings and sold to the highest bidder. I would advise listing your car on another platform such as or craigslist to ensure you receive the best possible deal on your vehicle. Other auction types include military auctions and liquidations from city surplus. 


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