i know most used car dealers hit a home run on most cars they buy and sell or they would not be in business.
Not accurate at all. Some dealers may be around for decades many more quit within a year. They ALL eventually sell, some for a little loss, some for a big loss and if lucky, for a nice profit. Auction would be the last resort unless there is something major wrong with it that it couldn't be sold to a customer.
The industry term is WHOLESALED. The dealer may shop it around to other dealers hoping for a bite or calling in a favour. If nothing, they may ask employees if they want it for cost, and if nothing there then off to auction.
Dealers make thousands off of 6 out of 10 cars, hundreds on a 2 or 3, and often lose money on 1 or 2 . A good manager won't hang on to a dud for very long, and will move it out to free up cash for the next profitable deal. A bad manager will be so scared of losing money that he will hang on to the car for months, miss out on multiple profitable deals, and end up losing more money anyway ... until he learns, or gets shown the door.
I remember a handful of cars I thought wouldn't sell when I worked for a Chevy dealership. One memorable one was a teal colored Aveo sedan. I always joked that it looked like an Easter egg. Then one day a couple just as weird and quirky as that car came along and bought it... from me! They all sell eventually. Sometimes retail, sometimes at a loss, some at auction, and some to employees.
Everything has value. The key, is to find out what the market will bear, in a timely manner. You might get $10K for your sedan, to the right buyer, 3 years from now, or you could sell it right now, for $6k.
You can either lower the price, or ship it off to auction and get rid of it, for some cash flow.
Some good responses on here and I agree. I'll add that when you trade your car in at the dealer, the dealer already has a very good idea of what they'll get for that car (or if they'll get anything for your car), and they are already negotiating that into the price you'll be paying for your new car as you're sitting there trying to get money off. They're ahead of you.
Once in a while you may run into a dealer that is somewhat level with you. Or at least you they may be halfway level - my last buying experience felt like that - they told me my trade in would go to the auction and fetch between $5,000-$7,000 grand...that they would try to sell it to an employee first. I felt the same way. I figured the most I could get for the car in a private sale was $8,000. They gave me $6,000 for the trade...they initially offered me $4,500.
In the end I'm sure I lost, but I was buying a new truck with a lot of rebates. They said I got a "great deal". The manager told me that, personally (lol)...said they didn't make much off of me, but that they were a high volume dealer and they would sell ten of these trucks this week...that it was a rainy day, the owner was on the property and personally had to approve the deal because...it was slow for a Saturday...yada yada yada. I actually kind of believed him.
Been flipping cars for awhile now, most go to auction.
Don't forget that many used cars or damaged cars that are auctioned
sell to foreign exporters.
Less than 3% of used cars are sold by individuals for a reason.
Many junk cars sell for more than their retail counterpart because of the strong export segment.
Afterall you gotta fill the empty Super Cargo ships with something.