For the first part of this article, go to government seized car auctions.
It’s no secret that you can get quality cars for very low prices at seized car auctions. So far we looked at a few agencies that hold these. One big player that I haven’t covered so far is the Internal Revenue Service.
For some folks these are three words that may almost make you cringe, but the truth of the matter is that their auctions offer great value.
So how do they get the goods?
Easy answer………..Tax evaders. The IRS has the authority under various section codes to seize and confiscate the property of individuals and corporations that have not paid their taxes. These seizures include everything from real estate, collectibles through to cars and other vehicles. They will generally tend to confiscate the property most likely to liquidate easily and therefore satisfy the outstanding tax bill.
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These IRS car auctions are conducted on a district by district basis with quite a lot of information available on-line. There is a list that the IRS makes available before every auction which is known as the IRS Bidder’s List. This list is an extensive inventory of recently seized property and items that will be put up for sale. Prospective bidders can also contact the Collection Division of their IRS district for information. Generally these offices will have a good knowledge of the upcoming seized car auction activities and may even have a dedicated officer responsible for this.
Another department to consider is the Small Business Administration. This is a government initiative to assist smaller business with funding for growth and expansion. These business owners offer certain assets as collateral and sometimes default on their loan obligations. In this case, their collateralised assets are auctioned off by the SBA to pay for the defaulted loan.
Some tips on Valuation
The above agencies are just 4 of many that offer auctions across the country. They are a great way to start, or can compliment you other auction activities.
So let’s assume for a moment you’ve been able to short list a few seized auctions that you’re interested in. They key is to do good research on these vehicles before you start bidding. It would be useful to mention a few things on a car’s residual value, as this will be a key factor in being successful at seized car auctions.
There are 4 different ‘value indicators’ that I use to determine if a car is relatively inexpensive. A Good rule of thumb to follow is this – if the winning bid is 10% lower than the lowest of the four values, you’ve picked up a bargain. These are:
Trade in Value: this is the price that car dealers are ready to pay for any given make, year and model of a car. This is within reasonable bounds such as acceptable mileage, no severe body faults, etc.
Wholesale Value: This is a different price altogether. This refers to the price that a car would fetch if a private deal were struck between two individuals. It is the market created by placing an ad in the newspaper, driving around with ‘for sale’ stickers, etc. No institutions, dealers, etc are involved. You can easily get a feel of this market by consulting your local newspaper.
Loan Value: This is a good value to have, as it is the amount a bank will loan on a specific car of a certain age in a sound condition with no excessive mileage. Banks and other financial companies are considered to be good at valuing vehicles, so obtaining this value is also a good reference.
Retail Value: We have all at least driven past a car dealer’s lot. You’ll find loads of cars with prices advertised. These prices are referred to as the retail prices, in other words the price that dealers would generally sell the car for.
If you can find a car below these values, you’ve done well. The beauty is that most vehicle auctions have these almost daily!!
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