Wednesday, June 17, 2009

Auto-Auctions: A Survival Guide (a.k.a: I bought a Jeep Commander)

I detest car dealerships. The whole experience for me is akin to using a porta-potty at a festival. You feel dirty the second you open the door and even if you get the business done successfully, you know there was a better way. I think I found it.

Several years ago, Melissa purchased a Mazda RX-8 via eBay. She got it for the opening bid amount which was roughly $6000 under Kelly Blue Book value. It seemed too good to be true but after a leap of faith and a flight to Florida, we had one of the best auto purchasing experiences of our life and got the car for a steal, I wanted this experience again.

I have known for several years now that it was time to get into a bigger car. 2-kids, 2-dogs, 4-bikes and all of the gear that goes to support us takes up a lot of space. I have been driving the 1999 Jeep Cherokee since the day before we brought our twins home from the hospital over 8 years ago. It's a great car and it took us to both coasts on multiple occasions but I just needed something bigger.

I spotted the 2006 Jeep Commander in 2005 at Boo-At-The-Zoo. I knew immediately that this would be my future car. The only problem is that I would have to wait 3-years. For anyone not in on the finer points of depreciation, most vehicles lose more than 50% of their value in the first 3-years. After that, it's a nice gentle decline until the vehicle no longer has sale value. It had enough room for all of us, including the dogs I didn't know we would have yet. I liked the idea of a 3rd row so my folks could come with us out to dinner and share one car. I liked that Jeep Commander and would patiently wait until 2009 for it.

Melissa started hitting craigslist and eBay looking for 2006 Jeep commanders earlier in the year and has been reminding me that the time had come. All of her experience told us that we were looking at about $22k for one with the features I wanted. The biggest requirement was a new technology called MDS that shuts off 4 of the 8-cylinders in the engine to conserve gas when the engine isn't stressed and the car is at cruising speed (e.g. road trips). This happens to only be available on the HEMI engine (no, that didn't hurt my feelings... HEMI good). We finally found one on craigslist and I called only to find out weeks later that the owner was going through a divorce and the ownership kept changing hands. I relayed this story to a gentlemen by the name of Davin at our quinennial garage sale. He told me he happened to be a car broker and had access to the local auto-auction where I could get a great deal on the vehicle I wanted...

Could this be possible?

I took Davin up on his offer to send me a list of the 2006 Jeep Commanders going at the following weeks auto-auction. The list I got in the email had almost 50 Jeeps! I used an online VIN decoder to determine which ones had the HEMI and shortlisted 20 Commanders.

On a warm Tuesday afternoon, we met Davin at the auction lot which was a bit of a drive near I-70 & Airport Blvd. It was really nice. There were thousands of cars as far as the eye could see, every one of them had the keys in the ignition and not a sales-vulture in sight. We located the rows containing the 20 Jeeps I wanted to drive and took them to the test track. It's not the racetrack you might think. More like a one-lane quarter-mile straight-away to test acceleration and breaking. The first one drove fine and had more features than I could have imagined. The afternoon quickly progressed into evening and we worked our way through the cars. I brought a notepad and wrote the ID number of each car, what I liked and how much I wanted to pay for it. We ended up there past closing time for the lot because I had to drive a 2009 Mustang Shelby GT 500 (come on, you would do it too if you had the chance). I got home, discussed the cars with Melissa and settled on prices. I emailed Davin the 5 ones I liked with the prices I was willing to pay.

The next day was Wednesday, auction day. Davin had replied that he thought my numbers were a little low. To be fair to him, every one of the prices I gave him were under Kelly Blue Book private sale. There is only one problem with an auction broker and that is how they get paid. Their pay comes from the difference between the price they get it for at auction and the price I give him that I am willing to pay. This puts us a little at odds with each other so I had to determine what his services were worth. I would have rather paid a flat fee for the service and had Davin be 100% on my side of the deal instead of trying to do backwards math on the selling price of the car.

I got a text message on my iPhone at 10:18am: -
Jim the 1st commander just sold for 19500.. The hemis are bringing all the money. Can we go to 20k on them? I can get one there.

Another 06 limited without the hemi just went for 19k

It had 31k miles on it..

This was not a good time for me to be rational, I ended up catching a bit of a cold from staying out the night before and had taken a healthy dose of cough syrup (the good kind) that morning. I relied on Melissa to keep me straight and replied back:
We can go 19.5k total including fees on ones under 30k miles

The next set of text messages were much the same, Commanders going for higher than my maximum. The good news was that this auction would happen every week so I wasn't in a hurry. I justified my patience... I could take the family on vacation in the Cherokee one more year. Oh, but I wanted a new car and the experience the night before was fresh in my head. I put my phone down, un-paused my movie and decided not to think about it anymore.

Several hours later my phone rang, it was Davin. "We got the 2nd to last one", he said. As the day had progressed, dealers had left after getting what they came for. The crowd was thinner and therefore competition wasn't as fierce. I pulled out my notepad and looked up the 2nd to last one. My notes:
06 24k miles - dark khaki - doesn't start (dead battery) - flat RR tire

Oh God, what had I gotten myself into. Davin had told me that all vehicles sold would run, have any flats fixed and anything missing replaced. They also went through a full mechanical and frame inspection before delivery. The Jeep was also under factory warranty until October or 36k miles. Davin said that I might not be able to pick it up that day since it took a bit of time to get them all through inspections. No problem, no rush (patience Jim, patience). Later that day he called and said the car ran great, it was loaded with features and I had gotten it for a steal. The one minor problem was some road noise while making gentle right turns. He was going to take it into the dealership to have that fixed.

Thursday - Still being repaired

Friday - Still being repaired

Saturday - Still being repaired

Sunday - Umm, closed.

Monday - It's ready! They ended up finding the problem being that the front drivers side tire had worn funny. Nothing mechanical. All was good. Melissa and I drove to Davin's office and signed the paperwork, very easy. I was a little frustrated with the $150 dealer prep and handling fee but decided to let it go seeing how much effort had gone into inspecting, repairing, riding the dealership and even detailing the car.

I love my Commander. It has more features than I could have imagined. I will have to write up a better detailed review in another post. For now, here's what you should do if you buy a car at auction:

  • Get a list of cars that match your criteria and map out your path

  • Set aside lots of time to try them out

  • Take lots of notes on the cars and don't set prices until you are home and thinking clearly

  • Use Kelly Blue Book to get a starting point and don't be afraid to go under their prices

  • If at all possible, get one that is still under factory warranty

  • Don't fall in love with any one car, be open to options

  • Prices on cars later in the auction (higher auction numbers) will be better with less competition. There is where you will find your deal

  • Get a broker you can trust

  • Remember that you don't have to get a car at the first auction. You may just want to get a list of cars that your broker can note how much they go for. For our auction, they had a bunch of Jeep's every week and I could have waited another week, or two, or three..

  • Have fun. The buying process shouldn't give you an ulcer. If you don't feel good about it, don't do it. Wait another day, another week or even another month.

Happy buying, please leave a comment if you have any more suggestions or to share your experience.

1 comment:

  1. I am happy I found your blog on msn. Thanks for the sensible critique. Me and my sister were just preparing to do some research about this. I am glad to see such reliable information being shared freely out there.
    Best Regards,
    Amsden from Riverside city