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Follow up: buying a used car at a wholesale auction (like Manheim) - a few cautionary observations

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The main Manheim thread has now become an endless collection of posts from people looking for a broker or asking for MMR data. So, I thought I'd start a new thread on this topic, in which I wanted to share a few cautionary observations and experiences.

After months and months of looking (we were looking for a very specific year, color, mileage and options combo) we just bought a luxury SUV through OVE. In the process, I learned quite a few things and wanted to share a few cautionary things with people, as well as to create a sister thread to the main thread above in which people can actually resume discussing the wholesale buying process rather than beg for MMR data.

I am not a dealer (I bought mine through a very experienced broker who specializes primarily in certain luxury cars) but have full OVE and Manheim access, which proved to be invaluable. Without it, even if you are using a very experienced broker, you are really flying blind, as even with Manheim/OVE access you really have to be very detail oriented to properly read inspection reports, which takes a lot of practice and more than one set of experienced eyes. For instance, inspection reports are supposed to list the number of keys that come with your vehicle. Occassionally, however, they fail to list this altogether. If you are not used to reading inspection reports and fail to notice it and inquire about it prior to the sale, you could be out some money, as an additional key, especially for some luxury cars, can easily run you $275-$450 PER KEY.

I also found it interesting how so many dealers out there recognize the fact that a lot of potential buyers who don't know the market seek to buy cars at "wholesale" prices through OVE and/or Manheim. Hence, the reason that a huge percentage of dealer listings on OVE is at or even above retail prices, as so many buyers have the mistaken impression that they are automatically getting a great price just because they are buying through a wholesale engine, such as OVE or Manheim. Even if you are using OVE/Manheim to purchase a car directly from the manufacturer, you have to be aware that a huge percentage of manufacturer listings fail because the manufacturer intentionally sets a very high floor (even by retail standards) on some units. Hence, you really have to do your research to know what is a fair price for each car, after taking into account all the numerous variables associated with it. Once again, just because a car is being sold on OVE/Manheim, absolutely does not mean that you are getting a good deal on it.

Interestingly, in shopping for our SUV, I also noticed how pronounced some of the regional price trends are. There were several cars that we were outbid on by franchise dealers in areas in which these cars sell at a significant premium. It's kind of crazy that a retail purchaser, such as myself, would get outbid by a franchise dealer looking to resell a car at a premium but it happened several times and, at times, the amounts by which we were outbid were fairly significant (as in $1,500-$2,000).

Please feel free to use this thread to discuss the wholesale process. Please refrain, however, from begging for MMR data or broker contacts here.

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did you get a good deal in the end?

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STEALfromCAGgive2FW said: did you get a good deal in the end?Yep, I did, but it took months to find just the right car for us at a good price. People who think that they can save tens of thousands of dollars and buy a great car in one or two weekends this way are likely to be very disappointed in the end. If you aren't as particular as we were about everything about the car and aren't looking for a difficult to find year/options/mileage/color combo, it's obviously going to be far easier but this is no easy path to riches, especially if you haven't done your research.

At the same time, if you do your research, this is an excellent way to buy well maintained cars in great condition for less than what a dealer would charge you. Buying these cars privately can still be better (especially in situations such as mine, as I live in a state that exempts private party car sales from sales taxes and I usually take advantage of this by buying cars privately) but if you can't find the car that you want privately, this can be a great option as long as you take the time to educate yourself about it.

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A few more thoughts. To me, one of the most valuable things about purchasing a car through wholesale channels is availability and information. If you are very particular about the car that you want to buy, buying a car this way gives you access to several times as many options, especially if you are willing to consider non-local simulcast auctions.

Further, if you know how to read and interpret the information, wholesale channels provide you with an incredible amount of useful information about each car. One of the main reasons that I hate buying used cars from dealers is because it is often so difficult to determine how a car was treated in the past. It is all too easy for dealers to clean up a car and cover up evidence of previous neglect and abuse, which can be difficult to uncover even if you pay a professional. This is true even for certified cars -- time after time I have witnessed (through simulcast, so you are watching the whole thing on your computer) franchise dealers purchasing cars that I wouldn't touch with a 10 foot pole, clean them up and then offer them for sale as "certified" through their regular retail channels.

If you are buying a car through Manheim/OVE and know how to read their inspection reports (which isn't as easy as it sounds), you will have far more information about each car than you'd be likely to get any other way. Every single scratch, every single dent and every single curb rash, if any, is noted. You are told if any panel has ever been replaced and/or repainted. You are told how well various things are repaired. You are told if any of the maintenance items are overdue and/or if any liquids are low/need to be urgently replaced, etc... You are told how much tread life is left on the tires, which is of particular importance if a car requires expensive tires. You are warned if there is engine sludge. All this information allows you to figure out just how well or how pooly a car was treated by its past owner/owners.

Again, reading and properly interpreting the information isn't always easy though even if you have a helpful and experienced broker who is interested in helping you rather than just getting you to quickly buy a car because he gets a flat fee regardless of how long it takes. For instance, although Manheim's vehicle ratings are very helpful (0 is the lowest, 5 is the absolute best, 3 is average), there can be numerous and expensive differences between two otherwise identical cars rated, let's say, a 4. For instance, the SUV that we bought was rated a 4.5 out of 5, but I previously rejected SUV's that were rated a 4.1 and a 4.6 because of some of the things that I saw in their inspection reports.

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I guess my question is...who makes up these inspection reports? Can I hire one to inspect cars for me?

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FWIW, I'll share my OVE experience too...

First, it was a process that lasted several months (between early Nov, when my old car was stolen, and early Feb, when I finally pulled the trigger). I only got access to Manheim/OVE by mid-December, but it still took me a long time to make a decision I knew I'd be comfortable with (see the thread on "mazimizers", I'm one of them). In all honesty, I do enjoy the whole research process a lot, so I did not see it as a burden and I was in no hurry to buy (wife & I have very short commutes and were able to share a single car for as long as needed).

Got the OVE login from a guy advertising on Craigslist in a different part of the country – he was asking for a fee if you bought from wholesale auctions thru him and was giving people access to Manheim/OVE websites as well. While I was willing to travel for the right car (& price), I happened to find what I wanted at a local dealer – I just emailed him, told him I was not a dealer, but I'd be interested to buy the car at BIN if it checks out mechanically. Got there, took a look at other cars (just for fun), then took the car to my mechanic, had it inspected, went back, got the paperwork done in 15 minutes (paid cash – well, certified check) and was done, all pain-free.

In the process I had sometimes noticed the very same car (not the one I bought, different cars) listed on a dealer's website for $17,000 (described "like new"), on eBay at BIN (w/ best offer) @ 14,000 (with a more realistic description), and on OVE @ 12,000 (BIN) – with all issues clearly listed. I also saw cars on OVE that were at insanely high prices... I'll attest listing details are very cool – I couldn't believe how expensive those key fobs are, for example (see geo's comment).

In case you're interested what car I bought... a very well equipped 2007 VW Passat 2.0T (personal preference, really liked the car) with high miles (90k), selling price in Jan 2007 $33,900 + tax, bought it in Feb 2010 for $8,800 + tax. Had complete maintenance records, drives & looks like new (I receive fairly regular compliments from complete strangers – and no, I'm not a hot girl, I'm a guy!), and I do feel comfortable with the soon-to-come maintenance expenses (mainly the timing belt + water pump), as I kept them in mind when choosing the car/agreeing to pay the price. Could I have negotiated the price down a bit? Probably... but it was what I wanted, also kept in mind that there were no travel/shipping costs involved and I felt OK with my choice (FYI, car was listed on the dealer's public website for $12,999... and an older body style 2004 Passat, with 95k miles was listed for $11,999... sadly, I'm sure somebody will buy the latter for $11,500 + a free tank of gas, @ 15% APR....)

In the end, it was a very smooth process, love the car and I'm planning to make my next purchase the same way. Oh, and I emailed the guy with the login info, told him I used his info to find my car and asked for an address where I could send a check as a 'thank you'. he was pretty much shocked one would do that (or that one would let him know in the first place), refused to accept it, said he'd only get paid if I bought thru him, but in the end I did send it – felt like the right thing to do.

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wilkinru said: I guess my question is...who makes up these inspection reports? Can I hire one to inspect cars for me?Manheim's inspectors do. They are independent and tend to be incredibly thorough, so the information that they provide you with is far, far, far more thorough and comprehensive than anything that you'd get by inspecting a car on your own. These inspectors do this for a living and their inspection reports are relied upon by dealers.

This is not to say that they or anyone else (including your own mechanic) is infallible. If you are purchasing a car that's still under the manufacturer's warranty, like mine, this is obviously a lot less of a concern. Regardless, you can always pay for a post-sale inspection to be done by Manheim's mechanics, which can provide you with an in-depth mechanical report showing that the car is okay and give you the right to return the car or have Manheim/manufacturer pay for the damage if it's not. Post sale inspections are typically only elected for cars that are no longer under warranty, but you obviously can do it on any car.

Having said that, my broker for instance, just had a situation in which he helped a client purchase an expensive Porsche. The car was still under the manufacturer's warranty, so no post sale inspection was used. Although the inspection report said that the car came with 2 keys, the car initially came with only 1. The broker ended up buying another key for his client ($425 for that key) and Manheim immediately reimbursed him for it. Interestingly, they later found the missing key, which was stuck somewhere in one of the warranty books.

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Speaking of inspection reports, one of the reasons that I mentioned that you have to know how to read them is because they can scare you off if you are not used to reading them. This is because if you are not a professional, you likely would never notice an overwhelming percentage of various issues noted in these reports, so a list of "defects" can make it seem that the car has more problems than it really does. That's the reason that it really helps to have looked at a lot of inspection reports before you buy and to work with an experienced broker who can help you. It can also help to look at inspection reports that come with new or nearly new cars -- you'll be shocked by all the issues spotted by the inspectors even on new or nearly new cars.

Knowing this really allows you to properly evaluate inspection reports. For instance, the inspection report for our SUV (a 4.5 out of 5) only noted two light scratches on the rear bumper cover that it said would polish off, one light scratch on the right passenger side door that would also polish off and two very small door dings without any paint damage that can be easily removed with PDR (painless dent removal). None of these issues were even noticeable to anyone other than a professional.

At the same time, a car can still be rated very highly but have things such as a missing navigation disk, a missing key and tires that need to be replaced. If you are only looking at each car's numerical ratings and aren't paying close attention to the details, the above issues can easily cost you close to $2K, especially on a luxury car.

By the way, one of the reasons that it helps to have an experienced broker is because he can help you make your car looking showroom ready at wholesale prices. Manheim's facilities can offer you to address just about any issues on your car at a fraction of a cost that you'd pay through regular retail channels. You'd also get much higher quality this way, as many of these people are used by the manufacturers to address these types of issues and manufacturers are a lot more anal and particular than consumers are because manufacturer reps notice blemishes that regular people do not.

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Can you give me pricing for a 2003 Porsche Boxster S

Thx in advance

Hehe, sorry, couldn't resist making that joke. Anyway, thanks for the very helpful info. Any advice on how those of us who might not have a connection could at least get access to log in to see the data? Could be helpful for even if we weren't going to ultimately buy the car from one of the auctions.

I am not a dealer (I bought mine through a very experienced broker who specializes primarily in certain luxury cars) but have full OVE and Manheim access, which proved to be invaluable.

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greieras said: FWIW, I'll share my OVE experience too...

First, it was a process that lasted several months (between early Nov, when my old car was stolen, and early Feb, when I finally pulled the trigger). I only got access to Manheim/OVE by mid-December, but it still took me a long time to make a decision I knew I'd be comfortable with (see the thread on "mazimizers", I'm one of them). In all honesty, I do enjoy the whole research process a lot, so I did not see it as a burden and I was in no hurry to buy (wife & I have very short commutes and were able to share a single car for as long as needed).

Got the OVE login from a guy advertising on Craigslist in a different part of the country – he was asking for a fee if you bought from wholesale auctions thru him and was giving people access to Manheim/OVE websites as well. While I was willing to travel for the right car (& price), I happened to find what I wanted at a local dealer – I just emailed him, told him I was not a dealer, but I'd be interested to buy the car at BIN if it checks out mechanically. Got there, took a look at other cars (just for fun), then took the car to my mechanic, had it inspected, went back, got the paperwork done in 15 minutes (paid cash – well, certified check) and was done, all pain-free.

In the process I had sometimes noticed the very same car (not the one I bought, different cars) listed on a dealer's website for $17,000 (described "like new"), on eBay at BIN (w/ best offer) @ 14,000 (with a more realistic description), and on OVE @ 12,000 (BIN) – with all issues clearly listed. I also saw cars on OVE that were at insanely high prices... I'll attest listing details are very cool – I couldn't believe how expensive those key fobs are, for example (see geo's comment).

In case you're interested what car I bought... a very well equipped 2007 VW Passat 2.0T (personal preference, really liked the car) with high miles (90k), selling price in Jan 2007 $33,900 + tax, bought it in Feb 2010 for $8,800 + tax. Had complete maintenance records, drives & looks like new (I receive fairly regular compliments from complete strangers – and no, I'm not a hot girl, I'm a guy!), and I do feel comfortable with the soon-to-come maintenance expenses (mainly the timing belt + water pump), as I kept them in mind when choosing the car/agreeing to pay the price. Could I have negotiated the price down a bit? Probably... but it was what I wanted, also kept in mind that there were no travel/shipping costs involved and I felt OK with my choice (FYI, car was listed on the dealer's public website for $12,999... and an older body style 2004 Passat, with 95k miles was listed for $11,999... sadly, I'm sure somebody will buy the latter for $11,500 + a free tank of gas, @ 15% APR....)

In the end, it was a very smooth process, love the car and I'm planning to make my next purchase the same way. Oh, and I emailed the guy with the login info, told him I used his info to find my car and asked for an address where I could send a check as a 'thank you'. he was pretty much shocked one would do that (or that one would let him know in the first place), refused to accept it, said he'd only get paid if I bought thru him, but in the end I did send it – felt like the right thing to do.


This is precisely the type of information the other Manheim thread was lacking; thank you for taking the time to post your experience. As someone who has only bought one car in their life, I didn't know that it was relatively easy to search for specific cars on these various sites to see the pricing differences. Not to bog down this new thread with requests, but are there any people with access to Manheim/OVE websites that wouldn't mind PM'ing individuals with the information? Personally I'm not looking to buy a car now, but would like to see just how drastic the pricing differences may be.

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Geo: How did you get the login credentials for Manheim/OVE? Also, what is OVE, I'm not familiar with it.

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This thread is way better than the other one! Green for OP.

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robbierob03 said:
This is precisely the type of information the other Manheim thread was lacking; thank you for taking the time to post your experience. As someone who has only bought one car in their life, I didn't know that it was relatively easy to search for specific cars on these various sites to see the pricing differences. Not to bog down this new thread with requests, but are there any people with access to Manheim/OVE websites that wouldn't mind PM'ing individuals with the information? Personally I'm not looking to buy a car now, but would like to see just how drastic the pricing differences may be.


I wouldn't say it's easy, sorry if I made it sound like that; but if you have a fairly limited target in mind (max 2-3 models) and you start researching all these sources, you'll see that the very same cars are listed in more than 1 place – dealer's name & location, pics, mileage– they're all the same (except for price and parts of the description) and very soon you realize that you saw that car on a different site the day before, but at a higher/lower price.

But all that process made me wonder even more what the heck is the dealer's cost for these cars after all? I'm sure that even in my case they made a profit (definitely smaller compared to selling at retail), but still...

Re: getting access to Manheim/OVE – the only idea I have is Craigslist (actually craiglook, so you can search all US) – use keywords as wholesale, Manheim, auction in the "services" and "automotive" sections.

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ltcm said: Also, what is OVE, I'm not familiar with it.OVE is an online dealer-only auction engine, which functions like Manheim's simulcast.

Manheim's auctions function the way that you think of a regular auction (live bidders and simulcast bidders engage in a live bidding contest). OVE's engine is similar to that of eBay in that it holds online auctions but also allows sellers to offer the "buy it now" option to buyers.

Overwise, OVE and Manheim's auction formats are very similar. Manheim's engine automatically displays the MMR for each vehicle, while OVE's engine displays both MMR as well as Black Book values. Both MMR and Black Book values only reflect the vehicle mileage and condition but not any of the options on each one (with some makes and models, this isn't true), which can cause their numbers to be really skewed.

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I realize I'm only talking about a sample of one here, but at least in my case I had the feeling that approaching a dealer about a car listed on OVE reduces the likelihood they'll start BS-ing you, trying to upgrade you to a more expensive vehicle, selling unwanted services, warranties, protections etc. I think you basically show that you're a knowledgeable buyer, one who has done his homework etc... so they'll keep their sales pitch for the next guy.

Oh, and on a side note... PLEASE don't take your kid (if you have one) with you when buying a car; I was in the dealership waiting for my insurance card to be faxed there and saw a family with a 6-7 y.o. boy. The parents were planning to test drive a Jetta, but the kid wouldn't get out of a Passat CC and started screaming that he wanted that car (which is what, 10-12k more expensive?)... you wanna guess what car they test drove after all? (not sure what/whether they bought something, I was gone by the time they were back).

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greieras said: But all that process made me wonder even more what the heck is the dealer's cost for these cars after all? I'm sure that even in my case they made a profit (definitely smaller compared to selling at retail), but still...If a dealer purchases a vehicle through Manheim/OVE, you know exactly what they paid for it if you watch the sale. Manufacturers sometimes run relatively small specials, such as transportation assistance if you buy more than a certain number of cars at the same auction. For instance, Mercedes fairly often offers $500 or $1,000 transportation assistance (total, not per unit) if you buy two or more units through OVE/Manheim. These types of things typically get factored into sales prices right away, so you are going to pay a little more for cars that have these transportation assistance offers.

Manufacturer's reps also have some discretion to offer some small unadvertised transportation assistance. By contacting a manufacturer's rep, for instance, my broker could get $200 in transportation assistance by buying just one unit at one of the Hi-Line auctions.

With both advertised and unadvertised transportation assistance offers, their cash value is typically pretty small, so they have a lot more effect on dealer profit margins but a lot less effect on those of us looking to make a retail purchase this way.

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By the way, I am not sure whether this is true with all manufacturers, but at least with the manufacturer of the SUV that we were interested in, Manheim/OVE is usually not the manufacturer's first method of sale. At least with that manufacturer (and I suspect with most others, as it makes a lot of sense) franchise dealers get the first crack at lease returns, which is one of the reasons that you'll often hear franchise dealers bragging that they get the cream of the crop.

What franchise dealers won't tell you though, is that while they do get access to the cream of the crop, the manufacturer's floor prices during that round of sale offers are higher, so relatively few cars are acquired by franchise dealers that way. Instead, franchise dealers wait for the same cars to be listed on Manheim/OVE with lower floors and then buy them if/when the price is more reasonable. As I mentioned in the OP, however, manufacturers often play the same games on Manheim/OVE, by setting very high floor prices on their units and waiting if anyone (especially poorly educated retail buyers with bad brokers) bites. When that sale fails, the car is re-listed at a lower floor price, etc...

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n/m

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I've received a couple of PM's asking me, among other things, how much the savings are if you buy a car this way. As you would expect, the answer is "it depends." As I mentioned in the OP and in a number of subsequent posts, if you don't take the time to do your research and understand how the wholesale process works, it is very easy not to realize any savings and even to pay more than retail.

Assuming that you don't make the mistake above, your savings will vary anywhere between roughly $1,000 to about $7,000. At least this was the approximate range of savings for makes and models that I looked at. The greatest savings are obviously realized on cars that because of their make/model/equipment/mileage/color happen to be in very short supply in your area, so that dealers can get away with charging a very large mark-up on them because a potential buyer can't just buy the same car from another local dealer (or perhaps even a non-local dealer) or private party.

Hence, the reason that this method tends to be particularly attractive to luxury car buyers who are looking for something very specific in their cars, as the wholesale method gives them a lot more availability and more competitive prices than those that they'd otherwise see by going through regular retail channels.

Having said that, just as I mentioned above, if you can find a car that you want privately, you can often do better that way (especially if you are in the same situation as I am and live in a state that exempts private party car sales from sales taxes, which is something that I've always taken advantage of until now).

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I am glad that you took time to note the time committment involved in a getting a car that meets your standards. When you bid on these cars your are competeing with used car dealers who are also looking to buy the "best" cars to sell on their lot. Thus, it can take a serious time committment to get a good quality 3 year off lease car that has been well maintained.

I have a friend who works for a small motorcycle shop that also sells used trucks bought from Manheim. The owner of the shop will also help people buy cars directly from the auction for a fee. If you want to a buy a $6000 retail beater truck/car for around $3000, these auctions are great.

Now, if you want to buy a 3 year old of lease Camry, Accord, TL, Civic, etc in near perfect condition - you have a much harder battle ahead. The used cars lots with hundreds of cars on those lots ALSO want those cars - and you will end up in a bidding war with them.

My friend purchased a used Acura w/ a retail price of around $15,000 for a little under $10,000 from Manheim. Now, what did that $10k get him? A mechanical sound car with low mileage BUT the glove box does not shut correctly, the leather seats are heavily worn, the paint has a bunch of light scratches, one door lock does not work, etc. The car that I would want would not have these defects and would cost another $1000-2000 at the auction.

Could I get that $15k retial car for $12k at an auction. Sure, but it might take two months of my time, lots of 2 hour car trips to/form the auction, stress, time from my family, etc - perhaps that extra $3k I pay the used car dealer for the same car starts to make sense?

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sloth911 said: Could I get that $15k retial car for $12k at an auction. Sure, but it might take two months of my time, lots of 2 hour car trips to/form the auction, stress, time from my family, etc - perhaps that extra $3k I pay the used car dealer for the same car starts to make sense?I wholeheartedly agree with everything you mentioned in your post. I just want to make one clarification, however -- it is not actually necessary to travel to/from auctions to buy these cars. All the information and all the inspection reports are available online and it is actually often easier to just bid on them online. For live auctions, you can set up proxy bidding, so you don't even have to be present during the auction or worry that you'll miss the car that you want (each car spends about 30 seconds on the auction block).

If you are bidding on a car that's not at your local auction, your broker can have an auction rep go to the car that you are interested in before the auction to answer any specific questions that you may have about its condition that aren't otherwise answered in the inspection report. Prior to the auction you can also get firm transportation costs online (OVE includes a quick tool that automatically provides firm transformation quotes for each car), so you'll know exactly how much it'd cost to get it shipped to you.

In general, although it can certainly take quite some time to educate yourself about the process and then to find the right car at the right price, the process of deciding whether a particular car is a candidate is actually WAY easier and faster with the wholesale process than having to go to various local dealerships to physically take a look at each car, try to figure out how it was treated by the previous owner and then spend time negotiating with the dealer (although you don't have to negotiate face to face). With the wholesale process, 99% if not 100% of things that you would need to decide whether you want a particular car can be done from your home/office as all the information is at your fingertips. The bidding process itself literally takes seconds.

Having said all of this, there is certainly a pretty steep learning curve that's associated with the wholesale method and plenty of risks that you'll face if you don't do your research. Hence, I completely agree that if cars that you are interested in are readily available locally, particularly from private parties, it will often make more sense to buy one of those than to go through the wholesale method. Personally, having gone through this process on this car, which was not available locally (well, the combo that we wanted was not available) and could barely be found nationally, I will be very comfortable buying our next car through the same wholesale channels, if a local private party search doesn't produce any results.

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i have one question, i am in a market to buy a car and my Friend happens to know a person who goes to the Auctions in PA i don't know if that is the same as this one. If not which is a better option? Another is does this happen on the weekends? I live in Northern VA.

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tia

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This thread should be joined with the other. If you don't want to look at broker/MMR stuff, browse the thread at higher rating and all those posts disappear.

Manheim is almost like eBay. If you are a real expert on something and have the time to continuously check inventory, you might end up with decent savings - particularly if you don't have a specific car in mind. Otherwise, the best thing to do is treat Manheim as a place with huge inventory where you can find the car you are looking for at a fair price similar to private party sales or a bit higher.

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Witold said: Manheim is almost like eBay. If you are a real expert on something and have the time to continuously check inventory, you might end up with decent savings - particularly if you don't have a specific car in mind.This is actually incorrect, especially if you are looking to buy directly from the manufacturer/manufacturer's finance arm. Every manufacturer on OVE/Manheim has sales events on specific days and, depending on the event, inventory shows up at a specific time. For the manufacturer that I was interested in, for certain sales events I knew when new inventory would be released within +/- 5 minutes, so there was no need to waste time continuously checking inventory. Instead, I would simply log in when new inventory showed up and spend a few minutes checking it out. If I wasn't interested, the whole process would probably take 5 minutes.

For the periodic Hi-Line auctions, new inventory could be released at any time but would only be sold on specified auction dates. Hence, prior to the auction I would log in and check out the entire inventory that I was interested in and then, if I was interested in bidding on a unit, have my broker submit a proxy bid.

Again, once you get the hang of the process, it actually becomes a very quick and easy one. It's the initial research that takes quite a bit of time. Unlike eBay, which is a pretty chaotic site, Manheim/OVE are extremely well organized and all the information is standardized, so once you've figured out how it works, the whole process becomes very quick and efficient.

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I've been asked to share the details of the SUV that we bought. There is no big secret here and the only reason that I haven't mentioned it is because it didn't seem particularly relevant to a general discussion of the wholesale car buying method.

We bought an '08 Mercedes ML350 with 25K miles, Premium II, running boards and a number of other toys. With the broker fee and shipping but without sales tax our total ended up being slightly above Edmunds' "trade-in value" and fairly substantially below KBB's "trade-in value" if you use "Good" condition as a guide, although this SUV is about as close to "excellent" as one gets (not that Edmunds' and KBB's prices are representative of market prices). An ML350 itself is not a difficult to find SUV. What is difficult to find is the color/options/mileage combination that we were looking for (the vast majority of ML350's out there only have Premium 1 and black interior, both of which didn't work for us). For instance, we really wanted one with running boards, which, if they weren't installed at the factory, cost $1,000-$1,400 to add after the fact.

Since the US dollar has been so low, ML350's have been exported very heavily to other countries (this has been happening with a lot of MB's, not just ML350's), so there's been a lot of demand for them, which has kept their availability fairly tight and prices relatively high.

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I have gone to a Manheim auction recently, and it was a real eye opener. Highly recommended, for the sake of a good life experience.

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I agree that using a good auto broker who charges a flat fee to shop Manheim for you can save you a lot of money on the luxury car end end of the spectrum and less so on the popular mid priced car.

The other use is to find out what a dealer paid for a car recently added to his lot.Using car fax info or the VIN I was able to search recent Manheim sales by make and color and then by mileage I could almost always find the car that was on the dealer lot. I was surprised how many used cars were actually from this auction and not trade-ins. It also made negotiating far easier when I could say "This car was sold at Manheim Florida last Wed for$XXXX.

For a while there were several back doors into Manhiem thru Russian websites but these have all been closed off

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LAwoodtiger said: I have gone to a Manheim auction recently, and it was a real eye opener. Highly recommended, for the sake of a good life experience.For some reason, I've always thought of car auctions as dirty, nasty places full of dirty cars and exhaust fumes. The reality was completely eye opening to me. Manheim's facilities are totally state of the art, ultra clean and extremely well organized.

If you like cars, you will feel like a kid in a candy store. There are thousands of great cars (all of them unlocked), including some ultra, ultra, ultra expensive, unusual and exclusive ones. After walking around Manheim, car shows will forever lose their luster.

If you are interested in this experience, it's best not to go on auction days, which are always crazy. It's a lot better to go on a Hi-Line auction preview day. Obviously, you'll have to be snuck in by a licensed dealer with an auction access pass, as these places are closed to the public.

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I've been asked to comment regarding any issues that I've seen with Manheim's inspection reports and, in particular, with respect to the car that we bought. On the car that we bought, the only thing that I could notice was one very small door ding that was shown on the inspection report. It was so small (the only reason that I noticed it was because it was on the inspection report and I was specifically looking for it) that I told my broker not to even worry about getting it removed. I couldn't see any other very small issues (the car is a 4.5 out of 5 and the list of issues was quite small anyway) that were noted on the report.

The SUV was shipped without floor mats, however. It's not a big issue, as they are only $130 at a Mercedes dealer right next door but I still had my broker contact his Mercedes auction rep. The Mercedes rep said that floor mats were apparently there when the previous owner turned the SUV in, that Mercedes had removed them to shampoo them and that they apparently got lost in the shuffle. They said that in the next 24 hours they'll either find the old mats and get them to me or just get me a different set of mats that matches the interior color. Please note that this is the way that Mercedes is handling the issue (it's not Manheim's problem), so there's no guarantee that another manufacturer would do the same thing. Then again, this is a very small issue anyway.

Another thing that I was prepared for is to do the next scheduled service on the SUV fairly soon, as it would not have made sense for the previous owner to do the service right before turning the SUV in. Interestingly, Mercedes actually did the service for me without noting it on the inspection report, so I don't even have to worry about it. This was a small but pleasant surprise, as it saves about $250.

The previous owner was also quite meticulous about service and was doing services every 5K miles instead of the Mercedes recommended 10K miles. It's an interesting thing to do, especially since he presumably knew that he was only going to turn the SUV in at the end of his lease, but I certainly appreciate that.

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geo123 said: I've been asked to comment regarding any issues that I've seen with Manheim's inspection reports and, in particular, with respect to the car that we bought. On the car that we bought, the only thing that I could notice was one very small door ding that was shown on the inspection report. It was so small (the only reason that I noticed it was because it was on the inspection report and I was specifically looking for it) that I told my broker not to even worry about getting it removed. I couldn't see any other very small issues (the car is a 4.5 out of 5 and the list of issues was quite small anyway) that were noted on the report.

The SUV was shipped without floor mats, however. It's not a big issue, as they are only $130 at a Mercedes dealer right next door but I still had my broker contact his Mercedes auction rep. The Mercedes rep said that floor mats were apparently there when the previous owner turned the SUV in, that Mercedes had removed them to shampoo them and that they apparently got lost in the shuffle. They said that in the next 24 hours they'll either find the old mats and get them to me or just get me a different set of mats that matches the interior color. Please note that this is the way that Mercedes is handling the issue (it's not Manheim's problem), so there's no guarantee that another manufacturer would do the same thing. Then again, this is a very small issue anyway.

Another thing that I was prepared for is to do the next scheduled service on the SUV fairly soon, as it would not have made sense for the previous owner to do the service right before turning the SUV in. Interestingly, Mercedes actually did the service for me without noting it on the inspection report, so I don't even have to worry about it. This was a small but pleasant surprise, as it saves about $250.

The previous owner was also quite meticulous about service and was doing services every 5K miles instead of the Mercedes recommended 10K miles. It's an interesting thing to do, especially since he presumably knew that he was only going to turn the SUV in at the end of his lease, but I certainly appreciate that.


Thanks for taking the time detail you experience, I found it interesting and potentially helpful when I buy my next car. I can also see why you can afford a nice car, you learn about your topic and you are emotionally stable unlike some people who attack a topic with scathing one liners full of emotion but little substance. Sadly, that's me sometimes too but I'm trying to learn

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How do you find a broker who can do this and what is a fair fee to pay them.

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jroros said: How do you find a broker who can do this and what is a fair fee to pay them.I can tell you how NOT to find a broker. Don't randomly use a broker that contacts you after you post in the other Manheim thread and don't just use Craigslist for those things. Just like with everything else, many brokers out there are perfectly legitimate, reputable and hardworking but if you are just doing it randomly, you have no way to distinguish them from scam artists or just lazy brokers who are just interested in pushing you to make a quick purchase so they can pocket the commission.

Just like with other things, personal references can be quite helpful when it comes to finding a good broker. If you are looking for a specific high end car, you may want to browse through the enthusiast forums to see if there are discussions of reputable brokers with experience with those cars.

By the way, although not absolutely essential, it is extremely helpful if your broker is very familiar with the cars that you are interested in. You will be leaning on your broker quite heavily in your search, so one who isn't familiar with the car you are buying is going to miss a lot of issues and may not even always be able to accurately tell what options a car has.

From what I've seen, a typical broker fee is $500-$600 depending on the car that you are buying. My broker, for instance, charges $500 for cars under $25K, $600 for cars over $35K and, I believe, $700 for cars over $50K. He also specializes in Mercedes, BMW and Porsche's. These fees are "all in" fees, meaning that there shouldn't be any additional "documentation" or any other junk fees.

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I've been asked to post a follow up regarding any issues that we've by now seen with the SUV that we bought as well as my thoughts regarding some of the bidding that I've come across. As far as our SUV is concerned, it has been absolutely perfect (not that I was overly concerned, since it's fully covered by the manufacturer's warranty). Last week I took it to a Mercedes dealer to address a small nick that I noticed in the aluminum part of the spoke in the steering wheel, which is a warranty issue. The service advisor took a very close overall look at the SUV and commented to me how impressed he was by its condition. He even admitted that very few of the certified Mercedes' that he's seen can match its condition, which isn't surprising considering how long it took us to handpick this one as well as the fact that most other SUV's that we've seen that were purchased by franchise dealers to sold as "certified" weren't in nearly as good of a condition.

The missing floor mats that I mentioned above were never found by Mercedes, so they sent us another set from another ML350 that matches the interior color of our SUV. Although the floors mats aren't new, you'd never know by looking at them. There's no wear on them and Mercedes had them shampooed before sending them out, so there's no way to tell that they aren't brand new. As I mentioned above, this wasn't really a big issue either way, as a brand new set of floor mats would've only cost us $130, but it's obviously nice not to have to pay it. Just keep in mind that if you find yourself in a similar situation, there's no guarantee that it'll be resolved in a similar way, since it depends on the manufacturer and the relationship between your broker and the manufacturer's rep. Hence, the reason that if you are buying at an auction and even if the car is under warranty, you need to expect to have to spend a couple hundred dollars to address some small issues. In our case, Mercedes had actually done all the needed services on the car without putting a notation on the inspection report (this is highly unusual) and replaced the missing floor mats, so we literally didn't have to spend another penny on it besides getting it detailed. You shouldn't be shocked, however, if you aren't as fortunate.

As for bidding, I've already mentioned a lot of the issues above. Specifically, even at dealer-only auctions you aren't truly bidding only against dealers, since there are enough people who do the same thing that I did and bid through brokers. You also have to keep in mind that the fact that the same car can sell at a discount in one part of the country and a premium in another part of the country also introduces bidding issues, since it's very easy and relatively inexpensive to have a car shipped. Hence, the reason that it's not at all uncommon to have cars sell at dealer-only auction at prices that are almost the same if not higher than retail prices in your area. Hence, the reason that you really need to know how to evaluate the market value of the cars that you are interested in and to properly factor in all the different variables.

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geo123 said: I've been asked to post a follow up regarding any issues that we've by now seen with the SUV that we bought as well as my thoughts regarding some of the bidding that I've come across. As far as our SUV is concerned, it has been absolutely perfect (not that I was overly concerned, since it's fully covered by the manufacturer's warranty). Last week I took it to a Mercedes dealer to address a small nick that I noticed in the aluminum part of the spoke in the steering wheel, which is a warranty issue. The service advisor took a very close overall look at the SUV and commented to me how impressed he was by its condition. He even admitted that very few of the certified Mercedes' that he's seen can match its condition, which isn't surprising considering how long it took us to handpick this one as well as the fact that most other SUV's that we've seen that were purchased by franchise dealers to sold as "certified" weren't in nearly as good of a condition.

The missing floor mats that I mentioned above were never found by Mercedes, so they sent us another set from another ML350 that matches the interior color of our SUV. Although the floors mats aren't new, you'd never know by looking at them. There's no wear on them and Mercedes had them shampooed before sending them out, so there's no way to tell that they aren't brand new. As I mentioned above, this wasn't really a big issue either way, as a brand new set of floor mats would've only cost us $130, but it's obviously nice not to have to pay it. Just keep in mind that if you find yourself in a similar situation, there's no guarantee that it'll be resolved in a similar way, since it depends on the manufacturer and the relationship between your broker and the manufacturer's rep. Hence, the reason that if you are buying at an auction and even if the car is under warranty, you need to expect to have to spend a couple hundred dollars to address some small issues. In our case, Mercedes had actually done all the needed services on the car without putting a notation on the inspection report (this is highly unusual) and replaced the missing floor mats, so we literally didn't have to spend another penny on it besides getting it detailed. You shouldn't be shocked, however, if you aren't as fortunate.

As for bidding, I've already mentioned a lot of the issues above. Specifically, even at dealer-only auctions you aren't truly bidding only against dealers, since there are enough people who do the same thing that I did and bid through brokers. You also have to keep in mind that the fact that the same car can sell at a discount in one part of the country and a premium in another part of the country also introduces bidding issues, since it's very easy and relatively inexpensive to have a car shipped. Hence, the reason that it's not at all uncommon to have cars sell at dealer-only auction at prices that are almost the same if not higher than retail prices in your area. Hence, the reason that you really need to know how to evaluate the market value of the cars that you are interested in and to properly factor in all the different variables.


Apples to apples you will not find a vehicle at manheim selling higher than retail in any market. What you may find is a car that is above average condition and low low miles at manheim selling higher than one of far less conditon selling on a lot somewhere. We just purchased a 2008 mercedes ml550 and saved a ton. Find a small local dealer in your area is the safest bet if you want to purchase through the auction. And only buy a vehicle that is rated. Its real simple. If you google there are web sites that will give you access to manheim statisics and auction listings for 20 a month.

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bboy1234 said: Apples to apples you will not find a vehicle at manheim selling higher than retail in any market.Sure you will, as I've personally seen those. It's not uncommon to get two bidders who don't know enough about the market driving the price of a car to be way higher than its retail price. I have personally observed a couple of such bidding wars (via simulcast, of course, without leaving my office).

It was pretty interesting to see a fascinating bidding war that erupted over an ML350 a couple of months ago between two small dealers, one of whom happened to be in my area. That dealer won the auction but ended up doing so at an absolutely insane amount that was substantially higher than the vehicle retail price. After spending the next several months unsuccessfully trying to unload the car on the Autotrader, the dealer put it on OVE with a notation that essentially explained the mistake. The notation said something along the lines of "the price is higher than MMR, but this is such an unusual color combo." There was nothing unusual about the color combo (white on tan and it was only a Premium 1) and the dealer just didn't know the market. After quite some time and several price cuts, the car did sell -- for $4,800 less than what the dealer had paid for it.

There are way more dealers out there who don't know what they are doing than a lot of people realize. I saw an auction a while back in which a Suzuki dealership that decided to diversify its vehicle base badly overpaid for two ML350's with Premium III. Just out of curiosity, I subsequently spoke with that dealership. The manager who had made the decision to purchase those mistakenly thought that he was buying an unusual and desirable highly optioned model, which is what lead to the decision to pay as much as he did. What he was not aware of was the fact that the Premium III package includes MB's highly unreliable airmatic suspension and that, for that reason, most Mercedes buyers stay away from them unless they sell at a substantial discount. I don't know how much the two cars ended up subsequently selling for, but I did see the Suziki dealership put one of the ML's on OVE for something like $2K less than what it was purchased for.

I've also seen situations in which bidding got completely out of control because it was quite apparent that there were inexperienced individuals bidding on the same car for themselves using brokers and they just had to have that particular model. This is especially common with foreign buyers, who want to export Mercedes' to their home countries because, although they lose the warranty in the process, the weak US dollar is still making it so much cheaper for them to do so than to buy it in their home country that they don't care too much about the price and care primarily about getting exactly what they want in a vehicle.

We just purchased a 2008 mercedes ml550 and saved a ton.Congratulations, that's a great car!

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I thought I'd come back to this thread to post the reason that people need to be so careful with cars and really know what they are doing. Mercedes-Benz Financial is currently selling a 2008 Mercedes ML350 with only 14,709 miles. Here are the comments made by Manheim's inspectors (the bolding is mine): "Needs Rear Sam-Not Warranty, Fuel Gauge Inop-Not Warranty, Books, Frame Damage R Side, R Fender Replaced, Previous Paintwork, Defective Seats, Water Damage." There is also a list of various defects about half a page long.

There will be a dealer somewhere who will buy this car and will subsequently re-sell it to somebody who'll be jumping up and down from joy thinking that he/she just got a great low mileage car at a great price.

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Geo:

Great thread. Thank you for it.

Questions:
1) What is OVE? Edit, found it here: https://www.ove.com/login
2) How did you go about finding a broker willing to work with you? What did you do to secure your purchase?
3) What did you pay in terms of fees / markup on the broker side?

4) Were you dependent upon the Manheim reports? Did you trust those reports? I'm reasonably able to do an on-site inspection for any repair/collision/ body damage - but obviously you can't do a mechanical shake down.

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anyone tried register at www.auctionaccess.com successfully and then use the ID to register at OVE/Manheim successfully, thereby getting online access to auction listings/results?

Would love to know if this gets you access to auction info, which is all i want at this point.

Thanks.

Skipping 106 Messages...
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The logistics of such a deal can make it difficult to execute, especially long distance, not to mention that most buyers have unrealistic expectations of how much money they can save going this route. No, you can’t get a 2 year old BMW or Lexus that sells for $40,000 at a dealer, for $30,000. You can save $1000, maybe $2,000 or even $3,000 depending on the vehicle. Also, are you willing to send a $500 or $1000 deposit before they bid and to pay in full before you pick it up? Most people back out after hearing that.

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