Car Dealers Are DESPERATE! They're DUMPING CARS At Auction!

So today I'm at a used car dealer auction. Yeah, I'm sure that I'll buff out. Today I'm going to show you what dealers pay for a lot of these cars that are running through the auction. Alright, let's check this thing out. Look at this hood. All the clear coat is gone and then we still have all these scratches. What's going on here? It's a 2017 Cadillac Escalade. It's got 117,000 miles. Outside body, I mean hood, hood is bad. Look down that side, no dents, no dings. Look down this side, no dents, no dings. Tires are really good on it. I just don't get, I don't get that. Oh, there's a little, little hit there. Yeah, so we'll check this out. Just remember, remember these hoods whenever we're looking at these cars when they're going through. Alright, here's the Cadillac. Alright, trying to start at 19,500. No bids, no bids. Trying to start at 19,000. Drop down to 15,000, all the way down to 15,000. We got one bid. It's a nice car. I just don't understand. Did they make the paint that cheap where the clear coat would like always get baked off and then all those scratches would just happen? I still understand the scratches. But anyway, we'll check this out. Inside looks decent. Needs to be cleaned up. But other than that, it's pretty good. 2017, 117,000 miles. 15.1, 15.2, 15.3, 15.4, 15.5, 15.6. It's rolling out. Still getting bids. Alright, it's up to $16,000. Rolling out. We're still bidding on it. Alright, every time he yelps, he's got a bid. Up to $18,000 now. 18.4, 18.5, 18.6, 18.7. 19,000 now. 19.1, 19.2, 19.3, 19.4, 19.5. Alright, that fist means he's got the highest bidder right there. The other guy dropped out. Alright, 19,500 sold. 19,500 sold. Alright, so we're just now seeing reports and data showing that wholesale prices have been dropping. You can see all around me, all of the cars that are here at this auction, there's actually a lot more cars than what we typically will see at this auction. And we're just coming really right off one of the biggest selling times for a lot of these new car dealers. So what does that mean? That means they're moving a lot of cars. They're getting a lot of trade-ins right now. And they're sending them to auctions. So it's not been but maybe a few weeks ago where I was showing you a lot of empty spaces at this auction, maybe about a month and a half, two months ago, where there were a lot of empty spaces. And it's because the new car dealers were slower during that time of year. But now we hit the end of last year and incentives rolled in. They had to hit the end of the year goals, the end of the year sales, all of that jazz. We're getting to where, okay, they moved through a lot of product. And this is what happens. So going back to wholesale prices dropping and now the data showing it, this is what I've been talking about for quite a bit, is that as these new car dealers can sell a lot more of their inventory and get more trade-ins, it puts more vehicles in the system, as you can see here. And that allows the prices on the wholesale level for what used car dealers like myself are buying to come down. And this, I foresee, is going to be the trend at least for the next probably month, month and a half, until we hit like the big spring selling season. That's tax time for used car dealers. That's when prices will really spike. So right now we're actually buying as many cars as we can. I'm a used car dealer. I sell cars that are $5,000 and under, and we're trying to buy everything that we can see that we can sell for under $5,000. Because once that time period hits, we're not going to be able to buy anymore. At least we could come and buy a lot of these cars, but we end up paying almost retail whenever all the tax time craze starts to hit. And I love to see the numbers come down right now on the wholesale level. I love to see the data coming through the system, a lot of stuff that we've been talking about already before the data actually hits. But I think it's going to be very short-lived because of just regular seasonality of the car market. That's what we're getting back to. It's what I've been talking about a lot, where we have the end of the year on the wholesale level. It's slower for used car dealers, faster for new car dealers, more inventory in the system, less demand from these used car dealers because they're not really selling a whole lot on the used side. So that can push prices down. But again, short-lived. And here's one of the reasons why we check out cars before they go to the auction. You hear that ticking? I don't know if the mic's picking it up or not. But the motor is actually ticking. And when it goes to the auction, you'll hear just in a minute how loud it is in there. And we can't really hear that when it's going through the auction with all the yelling, all the other motors going all around it. It's in an enclosed building, so everything's echoing off the walls, the floor's cement. It's a big reason why we come out here an hour or two hours before the auction and check out the cars that we want to bid on because we could easily miss a problem like that. And when I'm selling cars that are $5,000 and under, I don't have very much room to mess up. So if we get a car that we buy and it needs a motor, in a lot of cases we're not fixing that motor. We're sending it back to auction and we're taking our lumps on it just because that's the way it goes with our cars. We don't have a lot of room to move, so we need to know before the auction even begins what's wrong with the car. 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All right, I want to check this Tahoe right here. It's a 2013. It's got 167,000 miles. But I want you to see how much something like this brings, even with something like this on the hood. Look at that. You see all those scratches. I don't even know how this happens. I know that we've shown another vehicle just like this before. And I got a bunch of answers where it maybe scrapes the trees. But probably what actually happens is this clear coat gets baked off. But see, I understand the clear coat getting baked off, but I don't know what causes all the scratches. See all that. It's like a machine. It's like the scratches were buffed into the hood. I'm not really sure exactly how that happens. This is a 2013. It's got 167,000 miles on it. Outside body, other than the hood, looks good. But, I mean, it's an LT. No dents or anything. And that hood can easily be fixed, even with a cheap paint job. But it's still something that the dealer's going to have to deal with. That's that Ram next to me, if you hear it. All right, here's that Tahoe. Trying to start at $9,000. Dropped down to $8,500. No dents, no dents. So this guy on the floor is holding up his finger. That's Kurt, trying to get $7,000. All right, dropped down to $5,000. They've got to be at a $5,000. Inside, dirty. Gross. Not as bad as we typically see if it's like a repo or something. But this is still not as good as you see most trade-ins either, though. So, anyway, we'll check this out. See what it brings. Tahoe, 2013, 167,000 miles. $51,000, $52,000, $53,000, $54,000, $55,000. It's going to roll out slower. Still bidding on it, still bidding on it. All right, we've got a bunch of hands raised now. Up to $6,000. Rolling out. $6,000, $62,000, $63,000, $64,000, $65,000, $66,000, $67,000, $68,000, $69,000, $70,000. $71,000, $72,000, $73,000. All right, up to $8,000, $8,000. All right, when he yelps, we've got to bid. Up to $8,300, up to $8,400. Up to $8,500, $8,600, $8,700, $88,000, $88,000. All right, we've got $8,800 sold, $8,800 sold. And batteries and alternators, big time issue, especially when it gets cold. You hear that clicking right there? That means battery's dead and they have to put the jump box on it to allow it to run because the alternator's probably also gone. So you have battery that's dead, you have an alternator that's gone. And as the weather gets colder and it's getting colder here in North Carolina right now, batteries just get absolutely destroyed. So often when I'm going to these auctions around January, February, March, you'll see that a lot of cars are dead. And the added complication that that gives to a car dealer like myself is I go out here and I try to check these cars before the auction, and if they won't crank, yeah, I can go grab a jump box, but that just takes so much time. And you can see how many cars we have to get through on a weekly basis to check them out. So if we want a car and we want to hear it run before the auction goes through, then we have to get out here very, very, very early to be able to crank all the cars that will not crank, so we have to go get jump boxes. And then on top of that, we are in a state, I'm in North Carolina, where I have to get cars inspected before I can sell them. And if a battery dies, then the computer gets reset, and you have to drive a car a certain amount of miles before the computer will reset itself to complete all the processes needed to be able to get it past the finish line to be able to get inspected. So in a lot of cases, if the battery dies on these cars, even if we crank them up, we hook our code reader up, we hook our scanner up to it, it will not give us an accurate picture of what the car is actually dealing with because any of the problem codes that still might be in that car, they might not surface until we drive that car for 100, even some cars 200 miles before that check engine light will pop on so we can see what's actually wrong with the car. I actually don't see very many of these come through the auction. This is a 2018 Lincoln Navigator, and I've recently been to a Ford and Lincoln dealership, and there were Lincolns stacking up absolutely everywhere. They had so many Lincolns at this dealership that they were putting them on the Ford dealership. So the Ford dealership was overrun, but the Lincoln dealership was even more overrun that they had to pull Lincolns from the Lincoln side and put them on the Ford side. But anyway, we'll check this one out. And the reason why I want to check this out too before we get into the actual car is that because Lincoln is overrun and you can see that there's a lot of incentives for Lincoln, a lot of these dealers are dropping their prices because they just have way too many of them, then you're seeing the prices come down, obviously. So that should also push the wholesale prices down too. We would hope, but sometimes what the market's actually doing, there's a disconnect from how dealers actually react. And there might be a dealer that doesn't know that Lincolns are not really selling on the new side and then that the prices are coming down on the new side. So they might pay too much for it and then they'll sit on it for four to six months and then they'll realize that, OK, maybe I bought this thing wrong. Anyway, we'll check this out. It's a 2018, 114,000 miles. All right, here's a Navigator trying to start at $26,500. It's a nice car for $25,000 now. No bids, no bids. Drive down $24,000. Still no bids, no bids. Let's look on the inside of it. I bet the running boards will come out. Yep, I love that feature. All right, inside of this thing, it looks sweet. All right, check this out. Oh, I like this. Maybe I need to buy a Navigator. Look at that. All that divided in the front. My son would love to have all those buttons. He would just keep pushing them. My son's six, so he wouldn't know really what he's doing in the first place, but he likes to touch buttons. Oh, massive sunroof. Yeah, this is nice. This is nice. I bet this will still go for a lot of money, but probably still more than what it should. Lincoln Navigator. What is it? 2018, 114,000 miles. All the way down $20,000. We got one bid at $20,000. I like the lit up emblem on the front. I didn't notice that. All right, we got a lot of bids coming in. Up to $21,000 already. $21,200 with $23,000. $21,200. I messed up. $22,000. $22,200. $22,300. $22,400. $22,500. $22,600. $23,000. Asking for $23,000. They got a high bid, $22,900. $22,900. They sold it, sold it, sold it. Here's something rare that I almost never see. I've been doing this for 13 years now. That's a Mustang with 205,000 miles. Now, I love Mustangs. I'm not saying anything bad about Mustangs here. This is a 6-cylinder model, too. That makes it even more likely that it's not going to hit that 200,000 miles. As a kid, I loved Mustangs. Even as a young adult, I owned one and loved it, loved it, loved it. The thing about it is with those sports cars like that, they got dogged out. I was notorious for that, too. The one that I had, I was going to hammer it. I was going to make it loud. I was going to redline it very close to the point of evaporation. That's the case with a lot of these cars that look like this. Now, it might not look great now, but back in its day, it was a hot, hot car. A lot of kids owned those cars, and they did exactly what my kid self did. We dogged cars. That's why not necessarily it was a problem with the motor from Ford, which you could argue it was a problem with the motor from Ford, but in a lot of those sports cars, you can blame it a lot on me, on the kids that drove them and dogged them out.