Auction cars, Program Cars, Used Cars

I see that there is a lot of buzz about "auction cars". Sometimes to make them seem more appealing dealers will call them "program cars" and you need to know the up and downs of buying one.

First of all, a lot of "auction cars" are actually "former rental" cars and by law a dealer needs to tell you that. Most do not so you need to ask. Some of these vehicles may not have accurate "Carfax" reports on them because some rental companies do not send them out to an outside body company when they are wrecked. They fix them themselves so they are "under the radar" of Carfax.

Second, there is a used car dealer saying that they sell you the auction car for $395 over the  "blah blah reserve price". If you read the fine print it does not say its $395 more than they paid at the auction,  it says "$395 over the cost of bringing the car to market". The cost of the dealer's Rolls-Royce and house in the Cayman Islands could very well be in the "cost of bringing the car to market"....... so beware.

Third, auction cars have no "factory" window stickers. When you look at a late model auction car you need to compare the auction car versus a new car. Why? It may be in your best interest to buy new. I have many customers who insist they will only finance a car for 5 years and they may be looking at a 2 year old car. I suggest if they are thinking about financing 5 years on a 2 year old used auction car they may want to consider 7 years on a brand new one. You get new tires and brakes, a full 3 year 36,000 mile bumper to bumper warranty and you know where the car has been. You may be able to get a significantly better finance rate. Why do dealers not tell you about this?  It's simple, they make more money if you buy the auction car.

Fourth, do not go to a dealer to buy a new vehicle you saw in the paper only to be lured into a "program car". It is the oldest trick in the book. You may unwittingly be talked into a car driven by a bunch of kids during Spring Break and looking like a well worn dorm room before the dealer had his nephew spend two days cleaning it.

You need to be aware!