Buying cars, just to be buying cars..
I’m looking at my auction results today, and reminiscing back to earlier in this decade..back when I was buying cars just to be buying cars. I trade cars wholesale, that means dealer to dealer, auction to dealer, or dealer to auction. Those are the three methods of transactions in the wholesale used car business.
I sold 14 units today at the Dallas Auto Auction, and averaged $124.15 per unit. is $1700 bucks I have now, that I didn’t have before, but before what? Before I invested $140,000 in 14 cars, transported them, detailed them, reconditioned them, transported them to auction, and sold them. Hell, I’d charge me $1,700 bucks to do all that work, much less take the 140,000 risk. This goes back to what I say on the air all the time “You make your money when you buy” In this case, I’ve been busy, I got in a hurry, and bottom line is, I should have either passed on some of the buys, or negotiated harder. The good news is, that the cars made money, but a good wholesaler will run a net average of 500 a unit, not 120 bucks.
I didn’t look at the cars hard, I didn’t research the market on these particular units, I just big balled it, walked up, nodded my head and bought em. The curse is that more times than not, that wreckless/experienced buying style has made me MUCH more money than it’s ever lost me. This day, it didn’t. I’m not crying over spilt milk, I just thought to blog about it. Many of you email me wanting more details regarding my tales of trading cars, so when I think of it, I’ll start blogging here more often.
The part that pisses me off, is that if I just passed on two of those units, that would have brought that average up 300 per unit across the package. But the two big whopper loosers in the group, have passed across the auction block 3 times now on my dime, and the market is not going up. Meaning I can blow them up today, or wait another few weeks, and loose even more when the market on edgy miles begins to retreat, getting ready for the fall/winter new market pricing.
One of those losers, I had already tried to blow up at another auction, and it was arbitrated so excessive engine smoke. Today it came across the block with that same announcement, so it cannot be arbitrated for that, but it brought 21,000, instead of 23,000. Actually, the first time I sold it for 23,000 it made a little money.
There’s another auction tomorrow, I typically do better at the Thursday (DFW) sale, than Wed (DAA) sale. Which is ironic as hell, because I’ve sold over 100 million dollars worth of inventory at DAA, that was my bread and butter for a decade, and the DFW sale was a dog with fleas. Just as markets change, so do trends and buying habits at auctions. I’d have bet you ten grand a year ago if you told me I’d be selling my cars higher day in, and day out at DFW, than DAA, but I’ll be damned if that’s not the case.
All in all, the wholesale marketplace is still hopping, just as it should be, this early August. However, I think we’ll see a full scale seasonal adjustment come Texas State Fair-Halloween time this fall. Don’t be caught holding the weenie when Big Tex talks this year, becuase the first words out of his mouth will be ‘Howdy Partner, your sh*t (cars) aint worth today what it was worth yesterday, have a good time at the fair”
Big Tex always had such a way with words. Moral of the story, don’t be buying cars, just to be buying cars (speculation) in late October, because when the levee breaks, you’ll be happy if you can just loose $1,000 per copy. Breaking even would be an early Christmas gift.
I’ll see you on the radio