Belt Auction

How does the auto auction work?

When dealers buy cars from an auction how much are they paying for a vechicle compared to how much they can resell that vehicle for. EX. I recently bought a Jeep at KBB value from a local guy for $8600 and when the deal was done he told me he bought it for $5500 from the auction. That is 55% more than what he paid. Is that a typical profit that dealers expect to see when they purchase a car from the auction? I'm not worried about how much more I paid...but are the cars bought at auction usuallly problem cars? Again, what type of price does a dealer expect to pay compared to how much they can resell it for?

Public Comments

1. They like to make at least $2000.00 on a deal.
2. the profit margin might seem excessive but keep in mind that the dealer probably fixed all the problems the care had before the resale. Plus you have at least a 30 day warranty. I recently bought a used car. it had a new brake job and brand new tires. My point is there are other costs to the dealer besides the auction price. As long as you researched the price and got a decent deal and like your car I wouldnt be worried about the dealer's profit margin.