What is used vehicle auction?
Used vehicle auction is simply “bidding” which the used vehicle shop is able to participate.
Why is the used vehicle auction able to conduct their business successfully?
The reason the used vehicle auction is able to conduct their business successfully is because “both parties have a financial profit”. Let’s go over the advantages for both parties.
Advantages for auction houses
First, let’s go over the advantages for auction houses. By providing a place for the auction, auction houses will receive payment for “exhibition fee” and “contract conclusion fee” from the seller, and “successful bid fee” from the buyer. Since they gain profit by providing place, they will not have to worry about keeping defective stocks.
Advantages for sellers
As for the advantages of the seller, their vehicles will be seen by more buyers. Usually, the products will only be seen by the customer of limited area, if they keep their vehicles at their shops. By using used vehicle auction, the seller may obtain more prospective customers.
Advantages for buyers
As for the advantages of the buyer, they can check out more vehicles. Since they have a chance to check out more vehicles, they can purchase a used vehicle with better condition.
What are the specific process at the used vehicle auction?
First, the seller will bring in the exhibition vehicle to the auction house. When they bring in the vehicle, the seller will fill in “the exhibition form” which is a form to fill in basic information etc. The exhibition form shall be filled out without mistake, since they are writing important points such as the vehicle type, grade, seller’s appealing point, vehicle inspection date etc., which would lead to the buyer’s decision of purchasing the vehicle.
After bringing in the vehicle, the auction house will conduct vehicle inspection. They will carefully check whether the vehicle has any damages or dent, whether the engine works properly, and whether the mileage is fake or not. Checked contents will be added to the preceding exhibition form. Also, evaluation points based on the evaluation criterion of the auction house will be indicated on the exhibition form as well. This is a same kind of evaluation you see at the yahoo auction etc., where it says ‘Very good exhibitor’. The exhibitor with higher evaluation points will of course have higher possibility of obtaining a buyer later on. When the exhibition form is ready, exhibition turns at the auction will be decided. Once the exhibition number is decided, used vehicles will be moved to the exhibition yard to wait for the exhibition. The keys will stay with the vehicle at this time, so the agent who wants to purchase the vehicle may turn on the engine, and check out the vehicle condition. (They may not actually drive the vehicle). Pictures and information will be updated on the internet, so you will be able to obtain certain information even from far away.
After completing the pre-check, it will be time for the bidding. At the bidding, person who wants to purchase the vehicle will press the bidding button located right in front of he/she after confirming the bidding situation. The more the person press the button, the price will become higher, and once it reaches above the selling request price which the seller has set, the bidding will end and the successful bidder will be determined.
On the other hand, in case the bidding price does not reach the selling request price, it will not meet the reserve. This is called “unsold”. The unsold vehicle will be returned to the exhibitor, and will be decided whether to exhibit again, or to take it back from the auction house. In case the bidding ends, and the successful bid is made, the successful bidder will pay for the purchasing price, the seller will receive it, and the seller will hand the name transfer documents to the successful bidder. Once this process is completed, the successful bid will end, and the vehicle will become the successful bidder’s possession. However, in case there are any vehicle defects to be found within the prescribed term, the successful bidder may make a claim towards the auction house. If the claim is accepted, the successful bid price may be deducted, or the successful bid itself might become ineffective. To avoid those situations, the seller must mention all the necessary information correctly on the exhibition form.
What is the used vehicle auction agent?
Used vehicle auction agent, is as it is, the agent which earns a commission for making a successful bid.
What are the advantages of using the used vehicle auction agent?
The biggest advantage of using the auction agent service is definitely the fact that you can buy vehicles with cheap price. Since the agent will find you a cheap and good condition vehicle, it is not rare that you can purchase the vehicle with the price more than 10% cheaper compare to the general used vehicle shop.
Advantages of obtaining information
The fact that you can obtain more information is also a huge advantage. Looking for a vehicle on your own by checking each shops one by one, is a time consuming work. However by using the used vehicle auction agent, you can obtain various information of the vehicles exhibited at the used vehicle auction houses all over Japan. The fact that you are able to know the successful price, is another huge advantage. Usually if you are to buy a vehicle at the used vehicle shop, you will not be informed of the successful bid price. However at the auction’s auction agent, you will be able to know the successful price, and you can know if it was a satisfying price for you.
What are the disadvantages of using the used vehicle auction agent?
The biggest disadvantages of the auction agent service is that you cannot actually confirm the purchasing vehicle with your own eyes. Since only the agent can enter the auction house, the customer may not confirm the vehicle condition with their own eyes. However, auction house employee will confirm for you instead, so there are not much to worry about.
How much are the auction agent fee?
The fee differs between the agents, however the market price of the agent commission will be around \35,000 to \50,000. Some agent will ask for 10% of the successful bid price.
Will it be better not to buy a fixed vehicle?
Not exactly. Fixed vehicle is generally hard to find a buyer, so if you are looking for a vehicle with cheap price with decent quality, it might actually be a good choice.
Regarding the accident history
Since there is a system which the auction house will make a pre-check of the vehicle, it is almost impossible for the exhibitor to suppress the accident history at the used vehicle auction. If it is a small accident history, there are no need to worry in most cases.
I am worried that I cannot check the vehicle on my own…
We understand but there is no need to worry about. As we mentioned before, since the seller must fill out the exhibition form, and the auction house will check the vehicle, the possibility that the seller can suppress the fault is very low.
Comparison of reliance
Since the process will be done by human, we cannot guarantee that you will get an ideal vehicle 100%, however, that would be the same for purchasing the vehicle at the used vehicle shop. Since there will be a professional check, the auction agent could be more reliable.
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