This week I bought a used car at the Mainheim auction in Riverside, CA. I used a friend with a dealer license and paid him for the service (since only dealers are allowed to bid in the auction). I think this is a fairly common thing for dealers to offer.

I was able to search the http://www.manheim.com/ site (with his password) and found 19 vehicles that matched my criteria (BMW 530i 2005, with the premium+sport packages) selling at the next weekly auction. The MMR (average historical sale price) was approximately 24k @ 40,000 or so miles. My contact went to the auction, looked at all the cars, and eliminated all but six for various reasons.

I paid $25,500 for my first choice which had only 19k miles (with increased the price somewhat). Add on the auction fee of $375 and what I paid my friend for the service ($600) since he had to drive from San Diego to Riverside to bid, and again to pick up the car, in total $26,475 + tax. etc.

Was this a good deal? Well, you’re bidding against other dealers that see the vehicles as generic pieces of metal. In other words, you’re pretty much assured that you won’t get caught up in a bidding war since over 1,500 vehicles were being sold that day and the dealers have no particular interest in the one you’re looking for as opposed to the next one.

Looking at Kelley blue book, the trade-in value in Good condition (this car looked brand new… it was rated by the inspectors as 4/5 at Manheim which is very good), the trade-in value is $29,665.

There appears to be a huge disparity between dealership prices (the dealers I checked with wanted $35-40k for the same specifications) and the prices the cars sell for at the auction. My car was sold by “BMW Financial Services Remarketing, Inc” -- presumably a prior lease vehicle.

Since it appears that all the dealers get their cars from the same place, it doesn’t seem that there would be any difference in quality vs. buying the car from another source.

I’m not sure whether I saved any money vs. going another route, but it was a very nice experience since the Manheim staff creates a condition report of each vehicle and notes every little scratch, ding, repair, etc. along with estimated repair costs. They also note if there was ever any unibody damage and so forth. I was very impressed with how the auction focuses on pointing out the flaws of each car. In the end, when I got the car, I could not spot any of the flaws noted – the inspectors are incredibly picky and they will note things that a normal person would never even notice.

There’s also an incredible selection so you’re almost assured to find multiple matches for whatever you’re looking for at any given week.

It’s presumably not a deal per se. since I paid almost exactly market value, but it was certainly nice to be on even terms with how the dealers pick up their cars.

I will probably buy my next car the same way.

An archived thread touching on the same subject:

http://www.fatwallet.com/forums/messageview.php?catid=52&threadid=752848

Since only dealers are allowed to bid, did he have to buy the car in his name then transfer it to you? Did you pay Manheim directly, or did you pay via the dealer?

The city of philadelphia confiscates a lot of cars due to unpaid tickets and the like every year, and these are sold at auctions put on by the city every few weeks. While you do not need a dealer license to bid on them, you are not allowed to drive the vehicles away from the auction as they are unregistered, hence you need to have a tow truck standing by to remove them from the lot that day. This alone makes it out of a lot of people's reach, hence you can pick up cars for fairly cheap at them. I doubt there'd be any late model BMWs, though.

Had a similar experience, went with a freind to Manheim in riverside back in Jan of 2006 and bought
a 2003 HOnda odyssey exl with dvd 49k miles for $18.6 + $500(to friend) + tax +title license.

at the dealers were selling this van for $22-24k

DDD777 said:Just curious, would your friend be willing to do this for a stranger in the San Diego area once in a while for a simlar fee?

I usually shop around for 3 year old, off-lease luxury cars in the area when it comes time to trade. I spend more time than I like negotiating with the local dealers for cars that they picked up at the auction, and usually end up having to give them a little more profit than your friend was willing to take for his low risk transaction (since they took all of the risk in spec. buying the car to begin with, without a buyer in tow.)
I would assume so. I think he does it a few times a month. If you give me your contact info I'll pass it along to him.

I hate to tell you but the fact the BMW was selling the car auction means that it couldn't be certified.

Be careful of future problems.

Does anybody know any of the dealers around D.C area who charges similar price? I am in the market to buy a M3. Any lead would be appreciated.

Great post OP, very informative. I would imagine a person with a dealer's license would have to do this sparingly to avoid getting caught (assuming there are some limits to it or else anyone with a license would be spamming Craigslist 24/7). Hopefully by the next time I need to buy a car I might know someone who has a dealer's license.

ArbolLoco said:isn't there a risk you could be buying a $25,000 timebomb?

Dude. Just make sure there is no ticking sound.

many times an manheim cars are sold that are ex-rentals. My family did the same few years ago at the PA manheim. Dealer we went with asked for $500 and included all the reg fees. Interesting thing he mentioned is you have to be very careful with manheim cars. He(and others) sell many after accident cars there with rolled back milage and he spent the whole day explaining which cars he knew for sure were with rolled back milages, just from experience.