Using Auction Services
Many RV dealers frequent auctions, looking for bargains they can retail to customers. So, RV PRO recently asked dealers nationwide which auction companies they use, which auction events they attend, what they purchase at those events, and whether they like online auctions. Dealers even offered advice about what the auction houses could do to improve the experience for dealers.
Dale Tea, co-owner, Town & Country RV
“We are typically at ADESA Cincinnati monthly and ADESA Bay City, Mich., monthly. (We attend) another auction in Greenville, S.C., throughout the winter; it is America’s Auto Auction, an independent that will run up to 400 units an auction.
Dealers survey a Class A motorhome at ADESA’s Cincinnati-Dayton facility in this file photo from 2007. Dealers tell RV PRO they use auctions to purchase anywhere between 10 and 25 percent of their used inventory.
“We started going to Greenville in 2008, when the economy got soft. We were looking for alternative ways to make money, and the selection was great. When we go to any auction, we look for what will sell and balance our inventory.
“We bought five travel trailers and three motorhomes in this last month. We bought a 2008 Bounder gas, a 2005 Bounder diesel and a 2004 Winnebago Adventurer gas. In travel trailers, we bought bunkhouse units, including a couple Jayco travel trailers and hybrids.
“When we first started in this, we were predominately buying motorized, both gas and diesel, and we were all over the map with that. There weren’t a lot of new buyers when the economy was soft in 2008, but there was a lot of nice stuff available in the repossessed market; we would bring it home, put it on the Internet and turn it as fast as we could to turn a profit.
“We have a 2008 Winnebago gas coach now that we bought at an auction, which a man from California is picking up next week. We’ve also sold coaches to buyers in Key West, Fla.; Prince Edward Sound, Canada; and Los Angeles. When you get the right products, people will travel to buy them. My dad’s philosophy a long time ago was ‘You don’t make money when you sell it; you make money when you buy it.’ If you buy it right, people will travel to get it.
“We are a new Winnebago dealer, so we always gravitate to that. The problem is many people gravitate toward Winnebago because of how well it’s constructed. The consumers seem to have a lot of confidence in Winnebago as well. We try to buy at a ‘deal,’ and it’s hard to buy a Winnebago at a ‘deal’ in most cases.
“We’ve bought some products out of eastern Tennessee through an online auction: ADESA Eastern Tennessee. A rep did the walk-around for me at the auction. We don’t like to do too much of that, but if you get a good rep to help you with the walk-around and you ask the right questions, you can get a pretty good idea about what’s out there and create a buying opportunity …
“We’ve purchased online from ADESA, Manheim and America’s Auto Auction. Premier Auction was bought by ADESA, but we purchased from them before the sale and we still do some stuff with them; they are marketed to a bigger audience now …, so now the prices are higher because more dealers are aware of the company.
“Of our used inventory, 10-15 percent of it comes from auctions. That percentage is higher in the spring and higher in the late winter than it would be in the summer if we’ve done our job right.
“They are getting there, but the auctions need to improve their condition reports. The condition reports are completed by different people and you get varying opinions of what is considered an issue or a nonissue on a unit. It’s no different than movie critics; one guy thinks it is fine, while the next guy thinks it’s terrible. The condition reports need more uniformity, and it’s very hard to trust a condition report without looking at the coach.
“Buying from auctions is a constant process, and not something that you can do one month, then not do a month, and then do a month. You have to be all in … the market changes so quickly from auction to auction and from month to month.”
Don Fults, sales manager and inventory control manager, Guaranty RV
Junction City, Ore.
“We attend Brasher’s, which holds auctions in our hometown. Brasher’s is the largest on the West Coast, and it definitely specializes in motorhomes and trailers. On Tuesday nights, Brasher’s runs all the highline motorhomes; on Wednesday’s they run all the rest of the units. We’ve also traveled to Brasher’s in Sacramento, Calif., and to Manheim in Los Angeles.
“Since we are a full-line dealership – carrying luxury motorcoaches to very inexpensive coaches – what we look for varies depending on what’s in our inventory; we want to buy to round out our inventory. (Right now), we would like to purchase some midline diesel coaches; primarily Monaco and Winnebago products, since we carry those brands in new coaches.
“Everything is going back up in price. We had quite an influx of coaches that were repo-ed off of dealers’ lots and from the ultimate consumers, but those have dried up quite a bit. Pricing has started to go up quite a bit, and it limits what we end up buying at the auctions. We attend auctions about once a month.
“I don’t buy from online auctions because there are so many variations when you start looking at coaches. If you physically can’t see it, you really don’t know what could be wrong with the coach; as good as auctions try to be when describing a coach, they might say a coach is a ‘three’ on a scale of one to four, and I might call it only a ‘two.’ There could be more work needed to a coach than I anticipated; there are small details that actually make a difference, such as cracks in tires.
“When going to auctions, you really need to take a close look and be sure to take someone with you who really knows the mechanics of the coach. Know what you are getting into before going forward.
“Auctions could provide better condition reports. Another thing they could end up doing is offering either a virtual tour, or better – true photos of each coach. That would allow people to do more online research.
“If we are looking for both towables and motorized units; we probably average between 30 and 50 coaches purchased at an auction.”
Cindy Schmucker, owner, Brock Geist RV Sales
“We’ve been going to Manheim Missouri, the one in Springfield, Mo. It’s now been moved up to Kansas City.
“They usually have about two sales a month and we probably attend 10 to 12 times a year. We are looking for good deals on fifth wheels, travel trailers and the occasional motorhomes; I like to stay with 2005 and up, but I don’t have particular ones I look for – except I don’t go for the real cheap-end stuff, even though there is quite a bit of that out there.
“I like that people at the auctions are friendly. We usually go and buy 10 to 15 (units) at a time, and that makes them happy. We can find good deals, and most of them are repo-ed units because it’s been hard times for a lot of people.”
Randy Bowling, owner, Bowling Motors & RV Sales
“I go to Manheim, which just moved its auction from Springfield, Mo., to Kansas City. I also go to ADESA’s Cincinnati-Dayton auction just about every month, except in the winter months.
“Auctions give you inventory when you need it, which is the most important thing for me, because April and May and June and July are the peak selling months for us, and to have that adequate inventory enables you to have more sales.
“Not everyone can afford new, so auctions give you a good outlet to buy used. We’ve actually implemented a specialty finance department, and people have to purchase 2004s or newer to qualify for bank financing and the price range is usually between $10,000 and $15,000. We are auction purchases of those years and those dollar amounts. The auctions give us just-in-time inventory; typically, it’s stuff that people are looking for. It’s hard to trade for something specific, but you’ll buy something specific if you have that availability.
“I think the inventories are shrinking at the auctions. Back in 2007 and 2008, auctions were really dominant with inventory because of all the repossessions and all the bank units, but you don’t see as many of those these days. The motorhome selection is down, and the quality of motorhomes is down as far as the conditions and the shape of the vehicles. But prices are down on motorhomes, too, which doesn’t make sense; if inventories are low, you would think that prices would be higher.
“Motorhome sales have been soft for us this year. We bought a bunch of diesel pushers back in January, and we are still sitting on a lot of that inventory.
“When you are dealing with used, it’s hard to go to an auction and be specific; you don’t want to say: ‘Do you have a 34-foot Montana in a 2007 or 2008?’ because the chances of finding that are usually slim and none. I try to go to an auction a day early, and try to go into every unit there, and make notes so that I know exactly what’s there. What I want to buy are late-model units that are clean and that I can retail without having to fix a lot of problems.
“I have traveled to Florida for auctions and I used to go to Arizona. Florida has more motorized products and a better selection.
“I have purchased some units online, but you can’t smell dogs, cats and cigarette smoke online. It is ‘buyer beware’ online. I think it’s nice that they have that service, but there are more chances for problems. … Condition reports are helpful, but you really need to look the units over; campers are a lot different than cars because people live in them and have their pets in them.
“ADESA is opening a new auction in New York, and that sounds like it will be good. I don’t know if I get there or not in the near future, but it’s a possibility.
“Both ADESA and Manheim do a pretty good job of managing the inventory and getting the inventory online. Conditions reports could be better, but there’s always going to be something that they missed or I missed. They tend to be given the general descriptions of water damage and carpet stain, even when they are not, just because they don’t want to get in a bind for missing something. That makes it harder to buy units online, although there are people who do it; there are a lot of online shoppers.
“The Cincinnati/Dayton auction attracts Texas dealers, Louisiana dealers, and those from Arkansas, Illinois, Missouri, Ohio and Indiana. I think the sale in Dallas, which would be closer for many of those from the South, has higher prices. The quality also may be better in the Midwest because you aren’t going to have the sun fade.
“I’ve been told the prices at Manheim auction in Florida in Lakeland and the prices at the independent auction in Greenville, S.C., are both dropping and the prices are more like what you’ll find in the Midwest.
“My advice to other dealers would be: Visit an auction or two in your area, and see what prices the units are bringing. Experiment a little before committing to attend auctions. Auctions help your turn, your bottom line and your profitability.”
“I’m a fan of auctions. We have a small dealership, and I don’t go to a lot of different places because I have a family, but we do find good deals when we attend auctions.”