Re-auction a car? To be avoided like the plague!

Inside a large Japanese used car auction

Inside a large Japanese used car auction

Sometimes, usually at least once a month at Provide Cars Ltd, we have a customer who would like to re-auction his purchase for whatever reason.  Re-auctioning vehicles in the Japanese used car auctions should be avoided if at all possible.  Let me explain why.

First the sellers fees in most auctions are a lot more expensive than the buyers fees.  Also you must pay every time you auction your car, even if you do not sell it.

But when you sell a car back into the Used Car Auctions you must pay every time the car goes through the auction, even when it doesn’t sell.  You can not expect your car to sell the first time it goes through the auction, often it needs to go through 2 or 3 times before potential buyers actually purchase.   But why is the selling price nearly always lower than the buying price?

Think of the purchase process.  You log into the online car auctions.  You search for your vehicle of choice.  You bid, a very good price, just above the market average because you don’t just want a 50:50 chance of buying the vehicle, you want a 90% chance.  As the bidding goes, slowly the bargain hunters fall away, leaving the number of companies bidding on this vehicle to 5.  Next the budgets are exceeded by the other companies until there are only 2 companies left, you and another company with a customer just as keen on the vehicle as you are.  For the last 200,000yen of bidding, it is just you and this other company bidding.  Finally the car’s price exceeds the other company’s limits, they give up and you own the vehicle you planned on purchasing.

Now, for whatever reason you have decided to sell your vehicle back into the auction, when it goes back in the 2nd time, guess what major bidder is NOT bidding on it?  YOU.

Now, a week later or whenever, when the vehicle comes back into the auction, the best case scenario is that the number 2 buyer, still hasn’t found another vehicle to replace the one he wanted to buy but lost to you.  Likelihood is that he or she has already found another one from the same auction or perhaps another auction.  But let’s assume for arguments sake that  he or she hasn’t found a different vehicle and decides to bid on yours.  At what price now is this buyer going to be the only buyer bidding on this vehicle?  At the price when just the 2 of you were bidding.  That means, all other factors being equal, that this buyer will be the only bidder 200,000yen lower than the price you bought it for.  Why?  Again because YOU AIN’T THERE anymore.

I hope you begin to understand some of the factors involved with re-auctioning a vehicle back into the used cars auctions, and why it should be avoided like eating cold Mac Donalds french fries.  It really is not a good experience.

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