You are at the salvage car auction. Palms begin to sweat. Eyebrows high, with a pulse to match. Leaning so far forward that you are breathing down the neck of your competitor. Syllables pouring forth from the auction podium like a stream frothing and crackling as it tumbles over a waterfall.
- Is that guy in the garage uniform going to stay in this?
- How about that woman who came from her office job, still in her pinstripes?
- Is that young dad with the baby on his chest going to hang in there?
So How to Win Salvage Car Auction? (And Keep Your Shirt)
If this situation sounds familiar to you, then you have been a participant in the auctioneer’s fantasy: the bidding war. Most likely, you have been its victim, returning to your garage, lot, or private driveway muttering, “How could I have paid so much more than I had planned for this middling set of wheels? And how on Earth am I going to find somebody who will want it more than I did – an hour ago? I wonder if I can get my deposit back?”
The auction is based on gripping psychological principles. We’re going to explore these principles, and how you can fight back, over the next few weeks. For today, a brief summary using the scenario we began with will get you started off the crumbling path of victimhood and onto the Autobahn of victory.
If you don’t want to throw your money down a CESS-pool, it is worth committing the acronym C.E.S.S. to memory, Staying out of the CESS-pool means you know about Competitive environments, the twin principles of Endowment and Social Proof, and the fact of Scarcity. Take the CESS out of your auction strategy and put money in the bank.
At RideSafely, we are committed to making the auto auction process as smooth as possible for both buyer and seller. Our online auto auction systems create the largest possible vehicle market for our customers while drawing buyers through a wider selection.
You recall that in our last post, we spoke about the pulsing, tense frenzy of the auction floor. The business of RideSafely.com evolved from our deep understanding of the auction environment, so we are able to take some of the cold sweat out of the process. Less stress means more buyers for your inventory.
The business model that RideSafely.com is reinventing creates a CESSpool of panic, competition, desire, and fear. In this series, we have broken the auction floor into four psychological factors, which comprise the acronym “CESS.” In this post, we discuss the “C,” competition.
Competition: Think of the hapless bidder in the opening paragraph of the previous post. Can you feel him boiling with the combination of hostility and panic toward the three competitors? He’s practically shouting his bids, full of spit and venom at his rivals. The auction is designed to make this happen. You get locked in a struggle and you must have that car. Period.
The Fix: Breathe. Relax. Take in an auction or two from outside the bidders’ ring in order to see the auction at work. Remind yourself, “I am here to make money, but no deal is better than a bad deal.” The other bidders are not your competition. The battle between profit and loss overshadows any other consideration.
For the Dealer: Your ideal situation is to have an auction floor that holds thousands and thousands of potential bidders, but that doesn’t scare away your potential customers. Those people who like the cutthroat environment of the live auction will create the experience in their own minds. Think about the world of online gambling. As I write this, two giant Atlantic City casinos are in bankruptcy, and two others are already closed. Is the East Coast turning into a group of temperant evangelicals?
No, casino gambling in Atlantic City is under overwhelming attack by two forces: local casinos in North Jersey, Philadelphia, and Maryland, and gambling from an even more local source – the comfort of one’s own home. All we are saying is that those customers who are in the auction for the thrill of winning can pay top dollar from the comfort of their own home, without the dealer having to give up as much profit to maintain a physical auction house.
RideSafely.com provides an online solution that takes the inconvenience out of the buying experience. We also minimize the auctioneer’s fee. By making a more efficient market, RideSafely.com can provide buyers with the widest selection and a low-price guarantee for all “buy-now” listings.
In this series, we have been shining a light on the live auction environment, the inspiration for our business. We spoke about the pulsing, tense frenzy of the auction floor. In the last post, we even compared the auction floor to a casino. The business of RideSafely.com evolved from our deep understanding of the auction environment, so we are able to take some of the cold sweat out of the process. Less stress means more buyers for your inventory, and if you are a buyer, less stress = better deals.
The business model that RideSafely.com is reinventing creates a CESSpool of panic, competition, desire, and fear. In this series, we have broken the auction floor into four psychological factors, which comprise the acronym “CESS.” In this post, we discuss the “E,” endowment.
Endowment: As soon as you commit to bidding on a vehicle, you begin to view it as yours. You see it in your garage, your lot, or your personal driveway. Then, because you feel “endowed” with the right to own that set of wheels, you “defend” it from other bidders as if they were raiding your daughter’s wedding gifts. This is what drives so many eBay buyers away, when they know that with less than a second left on an auction, a sniper program will outbid them by a penny and take the item away.
The fix: Think about your money when you place your first bid. Think about something else that you could use that two grand for. Do you need a new inventory management system? Is your retirement puzzle still missing a piece that you had to pull out to survive the Great Recession? If your business is buying autos at auction and selling them to the end driver, you need to make sure your time investment is paid for by the profit you will generate by reselling the car. Think of your own day and the value of your time. Are you starting to crave that repossessed Mustang a little less now? Keep reading; we have an answer if you still want that Mustang.
For the Dealer: You probably found the cars that you thought about selling through an auction house as “ugly ducklings,” not imagining that a buyer or multiple buyers will bid aggressively on the “ugly duckling” when it gets its moment in the sun. Think about the imbalance of information at the auction. You want as many people as possible to see the car, not just the men and women in the front row.
At RideSafely.com, we find a wide array of Ugly Ducklings, which according to the rules of the retail automotive trade, can’t be sold to the consumer directly. These are called “Salvage vehicles,” including cars that have been in accidents, suffered water damage in a flood, or been exposed to fire. You, as a person who knows cars inside and out, are better qualified to determine what constitutes a good ride than some bureaucrat in a state capitol. You can find that Mustang, or several, because you know what to look for.
RideSafely.com provides the broadest range of cars, including perfectly safe vehicles that bear the “salvage” label, with a lowest-price guarantee on all “buy-now” listings.
In this series, we have been examining the live auction environment, the inspiration for our business. We spoke about the pulsing, tense frenzy of the auction floor. In the last post, we discussed what happens when a buyer bonds with an item at auction. He defends it as if he already owned it, and there is a horde of thieves lined up to take it away. The business of RideSafely.com evolved from our deep understanding of the auction environment, so we are able to present your inventory in a way that a buyer will step up with the sense of endowment, claim your vehicle, and defend it.
The business model that RideSafely.com is reinventing creates a CESSpool of panic, competition, desire, and fear. In this series, we have broken the auction floor into four psychological factors, which comprise the acronym “CESS.” In this post, we discuss the first “S,” social proof.
Social Proof: There is a current ad campaign featuring a woman who is using her cell phone to scout all the products she sees on an airplane. The implicit message is that the other passengers know what they’re doing. In the live auction example that initiated this series, our hero sees the guy in the mechanic’s uniform and says to himself, “This has to be a good car; why else would this mechanic be here?” Then, our guy blows his budget by 25%, guaranteeing a bad outcome. This is a perfect example of social proof in action.
The Fix: First, be prepared. In Pennsylvania, auction houses have to list the cars in advance. You can list the cars that interest you, and get there early to kick some tires and start some engines. You should have a target price on anything you might bid on. Some people advise that you set a firm point at which to drop out. Your calculation has to include your expected resale price, the cost of your time, tax, tags and title work if you are not a dealer, and a reserve for lemons.
For the Dealer: You want social proof on your side. If you own a live auction house, you might have your people, or paid acting students, bidding on the cars on which you want to make the most profit! The best social proof that we can offer online is comparable vehicles.
RideSafely.com offers buyers the opportunity to compare your inventory at a touch to Edmunds, Kelly Blue Book information, which invariably provides an optimistic view of the value of your cars and trucks. We are creating an environment where the customer will come to us first looking for quality and value, banking on our lowest-price guarantee on all “buy-now” listings.