I always here about government auctions of seized cars, boats, homes, etc. that can be bought for next to nothing. I am sure this is a gross exaggeration, but is there any truth to this at all? A web search reveals a bunch of companies that want to sell you information and guides, but no free information on where to find these auctions.
Do these auctions really exist?
Where can you get information about where to find them?
Are any of the guides that people are selling worth it?
The auctions exist, but as you might have gathered, the deals are typically not as good as the little ads make them out to be. Typically, when they say things like, “Jeeps as low as $50”, they are talking about either the floor bid, or the actually selling price of an auctioned Jeep at some point in the past. Needless to say, that Jeep was probably a wreck that wasn’t worth the money to haul it away.
I have known a few people who bought aircraft at government auction, and while their purchase price was quite low, by the time they had been refurbished and certified for civilian use the overall cost was comparable to just buying one on the market in the first place.
But all auctions have their great deals. If you start going to them it can be quite addicting, because at almost every auction you’ll see something go for far less than what it’s worth, just because there doesn’t happen to be two people who want it and bid against each other. The last auction I was at, a complete Nortel Meridian PBX with 8 new phones went for $300. That system was worth about $5,000, and the guy who bid for it was ecstatic. I was tempted to bid for it even though I had no use for it, because I could have sold it wholesale to a distributor I know for probably $2500. But it was clear that the guy had come there just to buy that system, and lucked out when no one else showed up to bid against him. Had I started bidding, he would have kept going with me right up to the wholesale price. So I let him have his deal.
I know a guy who owns a Chinese restaurant in Sydney. He went to Hong Kong to have thousands of chopsticks printed with the name and address of his restaurant on the wrapper. When he came through customs they placed a hefty tarriff on them that he simply refused to pay. They went up on the auction block the next month and he bought them all for £5. Who else would want several thousand chopsticks with the name and address of his restaurant?
All you need to do is get your camcorder, buy some late night 30 minute spots on your local UHF TV station and create the following three characters whom you will interview during your infomercial:
I was a high school dropout, could barely speak English, and was working for minimum wage as a busboy when I was first introduced to the money making system. In less than a month, I was making $30,000 a week. If I could do it, you could do it.
They laid me off after 30 years at the company. I was broke, had bad credit, and my medical bills were piling up. But now, we just bought our 5th home using the system. Now my wife and I can take vacations in Hawaii twice a year, and because we only have to work part-time, we get to spend more quality time with our kids.
I was tired of living from paycheck to paycheck, making someone else wealthy. But then I found out about the money making system. Of course, I was skeptical at first, but I went ahead and tried it. To those who are sitting at home watching this like I was, I’d say, “What have you got to lose? This package is worth a fortune and there’s no risk.”
Occasionally break away from an interview to show video footage of scantily clad women, yachts, jewelry, elaborate mansions and expensive cars. Be sure to drive home the points:
“Anyone could do this.”
“You only have to work a few hours per week to make big $$$”
“Do you wanna go on living from paycheck to paycheck?”
“You have nothing to lose.”
Yep, that’s basically the formula. It’s amazing how so many of these auction/real estate/MLM infomercials conform so precisely to this formula. The really savvy ones know just the right buttons to push.
I have only attended the local aution of towed cars here in Austin Texas, sometimes there have been some good deals, but most of the time people get carried away and pay way too much. One thing I never thought about before I went to my first auction is that a lot of the cars come without keys. You have to replace all the locks and you also have no way of knowing if they will even start.
Here in Austin we have had so many dotcoms go out of business that an auction company that specializes in liquidating them has opened up an office. The day after the better known companys are auctioned off, the local paper always runs a story on how the auction went. Sometimes people get bargains, but all too often they pay way more then retail for an outdated computer system or some piece of fancy office furniture. At the Agillion Inc. auction last month, someone paid something like 1200 dollars over retail for an outdated Dell desktop system. It all comes down to knowing what you are buying and knowing when to stop bidding and walk away.
My SO and I got some decently priced stuff at auctions when we first moved in together, and had no furniture or appliances to speak of.
Sam Stone has some good points. It depends on where you go, and who you are bidding against. We had really good luck at small auctions, buying small stuff. I used to know people who would go to auctions all the time and sometimes would walk away with really good deals on stuff, but you have to remember that they invested a lot of time in it, and went simply because they enjoyed them.
As Raving Nude Hermit pointed out, you have to know the retail cost of whatever you are bidding on, and think about possible hidden costs.
At the larger and more valuable auctions, you are also competing against institutional buyers - these guys are pros who travel to auctions looking for deals. They know a LOT more than you do about the stuff you are bidding for, unless you’ve done the legwork they’ll do. If they are bidding for a car on behalf of a car lot, you can bet that they’ll have gone through the vehicle already with their own mechanic.
When I ran my own company I would often attend auctions to pick things like printers and mechanical hardware. And I saw the same people at each auction. Buyers for used furniture stores, office equipment rental places, large companies, you name it. They know what the wholesale prices of this stuff are, and how to discount it for lack of warranty and overall condition.
So you, as a ‘hobby’ auction attendee, are at a significant disadvantage.
You read those things because those people are going to sell you information that you can get from the US gov for nothing. So you pay for the auction information when you could just as well get it yourself on the net from one of the US gov sites now for free.
Government auctions do exist… but as everyone has already noted you won’t necessarily find a deal since there will be 500 other people there trying to find the same deal you are… and will bid up the price. Sometimes there is an item that nobody wants and you can pick up cheap but would you really want to buy a car blind? You won’t have the history of the vehicle and there are no warranties provided. You may not even get a key so you will have to have it towed away. If you take it home, fire it up and the next day it blows a head gasket that will more than make up for the $500 you saved.
If you want to buy a good used car look in the newspaper for someone selling a car. They will often take lfar ess than what they are asking and at least you can ask for the maintenance documents and check it out before you write them a check… by the way, most of these auctions only take cash.
I bet some of them don’t come with smog checks, smog equipment & whole lot of other stuff they don’t mention.