Pre-owned vehicles from a dealer auction; is this a red flag?

[RX_EVOLV]

Hey guys,

Sorry if this is a silly questions but love some insights.

We have been looking at used vehicles at manufacture dealerships (e.g. BMW from Calgary BMW or Lexus from Royal Oak). Most of the cars so far appear to be trade-ins or lease return, but we also see that some are from Dealership auction ( not public auction). Is this a potential red flag?

Thanks

[you&me]

Hey guys,

Sorry if this is a silly questions but love some insights.

We have been looking at used vehicles at manufacture dealerships (e.g. BMW from Calgary BMW or Lexus from Royal Oak). Most of the cars so far appear to be trade-ins or lease return, but we also see that some are from Dealership auction ( not public auction). Is this a potential red flag?

Thanks

No, not necessarily.

The vast majority of used cars end up going through a dealer auction at some point. There are a bunch of reasons - some cars are total piles of crap and end up being auctioned "as-is" to shuffle them off to someone else, while other dealerships and manufacturers mandate all cars go through the auction simply as a matter of process.

Any used car should be looked at the same way, with the same level of scrutiny. I wouldn't automatically pass on something just because it's been through a dealer auction.

Edit - in the cases where the vehicles are at "manufacture dealerships (e.g. BMW from Calgary BMW or Lexus from Royal Oak)", the ones you're seeing that have been through a dealer auction are likely lease returns that were bought at "closed sales", meaning they were only available to the manufacturer dealerships anyways (BMWs only to BMW dealers, etc). Typically, there are three steps to off-lease vehicle remarketing. First, the selling dealer gets an option to buy it upon return. If the selling dealer doesn't buy it, then it goes into an closed auction available only to manufacturer dealerships and then if it still doesn't sell, it goes into a general dealer auction. There are a lot of reasons and factors that come into play, and just because a vehicle goes through auction (at what ever stage) doesn't necessarily mean there's anything wrong with it.

[RX_EVOLV]

This is VERY helpful. Thank you!

[bjstare]

Interesting info.

On a somewhat-related note, I wouldn't touch a lease return with a 10' pole. Nearly everyone I know that leases a vehicle makes a note of pointing out how nice it is they don't have to take care of it as much as if they owned it (driving hard on cold starts, etc)... just my 2c.

[roopi]

Interesting info.

On a somewhat-related note, I wouldn't touch a lease return with a 10' pole. Nearly everyone I know that leases a vehicle makes a note of pointing out how nice it is they don't have to take care of it as much as if they owned it (driving hard on cold starts, etc)... just my 2c.

I've leased a few vehicles and always treat them as if I am going to buy them at the end of lease (but then I never do).

[corsvette]

The majority of under or just over 1 yr old vehicles are previous rentals (was just looking at a 18 530X that was ex rental with only 18k) If you can accept that there's nothing wrong with auction cars. The dealer auctions declare these vehicles as previous daily rental cars, usually this will show up on the carproof report as well for the consumer to see. It's usually listed under "vehicle detail" on a registration event.

[C4S]

"Thread: Pre-owned vehicles from a dealer auction; is this a red flag? "

Yes ... most the time.

[ExtraSlow]

Well, lease back or rental or other fleet vehicle most of the time. If that scares you, then I guess it's a red flag.

If you think any other used vehicles are more pristine, then I think you are gullible.

[dj_rice]

For insider tips, if your able to find out the STK # on the vehicle, you can determine what it used to be. Not all dealerships use this method to stock their vehicles in. Sometimes the STK # will be on the windshield sticker or on the Keytag

PWxxxx= Purchase Wholesale
PLxxxx = Purchase Lease
PAxxxx = Purchase Auction
18GAXXXXA/B/C = Trade In

[Tik-Tok]

Interesting info.

On a somewhat-related note, I wouldn't touch a lease return with a 10' pole. Nearly everyone I know that leases a vehicle makes a note of pointing out how nice it is they don't have to take care of it as much as if they owned it (driving hard on cold starts, etc)... just my 2c.

Most people who own their cars do the same thing though. Most people just don't give a fuck about taking proper care of their vehicle.

[ExtraSlow]

Most people who own their cars do the same thing though. Most people just don't give a fuck about taking proper care of their vehicle.

Truth brotha

[ShermanEF9]

if you're really worried about how a vehicle was treated in a past life, save yourself the anxiety and buy new. for the most part, unless people were REALLY negligent, it won't matter much.

[googe]

Not a big deal. Vehicles are tough. Problems generally arise from a shitty build or a model-wide defect, not owner neglect or abuse. Wear items are serviced, and you get a CPO warranty to cover anything that was missed if it’s only a couple years old, so don’t worry about it.

[RX_EVOLV]

Sounds great guys. Generally not too worried as we are looking for a SUV (not a sports car) that's only a few years old and still under warranty. I'm just not too familiar with dealer auction cars. Thanks for all the information!