Negotiation in used car auction

Hi there. Here is JPC’s Mail Magazine #9

This morning, a client from the UK requested us to conduct a negotiation with the owner of the Mitsubishi Delica wagon he had not been able to get the day before. This client placed bids for 3 of the same models the other day but did not win, so he tried again the day before yesterday. Not reaching the reserve price, the car did not make sale; but he did not want to give it up and asked us to negotiate with the seller. You know, we have a time difference between the two countries. Morning in Japan is evening in the UK. He could not get to sleep after losing at the auction, so he decided to call us in the middle of the night.

We do negotiations like this: the buyer’s representative who wants to buy a particular car has to contact the auction organiser with an offer, then the staff will contact the seller to see if they want to accept it. When both sides agree, the deal is completed. Sometimes the seller says “Yes” straight away, but sometimes the auction staff have to work in between a few more times to bring about an agreement. So following our usual process, we asked the client how much he was prepared to pay, waited for the seller’s reply, then made another offer and the seller accepted it. In the end, the seller agreed with the price \50,000 lower than the original reserve price; we felt lucky. As you know, each negotiation goes differently and of course we cannot always win; but we are professional. We check the auction database, ask some auction organisers about the seller, what he/she is like; then make an offer considering his/her feeling. We often reach good deals for both sides.

So when it was morning in the UK, I rang this client and told him about our successful result: we succeeded in buying the car \50,000 less than the original reserve price! He was screaming for joy and his wife thanked us too. It was a great news to hear first thing in the morning. They asked if they were still dreaming.

If you use this system, you can sometimes wisely buy the car you want. This time the buyer added a bit more to his previous bidding price and the seller gave him a discount. This sort of the thing happens quite often.

We sometimes take cars to negotiation strategically when they are very expensive ones such as latest Mercedes Benz, BMW or Audi. One of the main reasons for the sellers not making sales, in most cases is a lack of the numbers of bidders (not many dealers sell expensive cars like these anyway.) Another reason could be because there are not many of these cars in the database. Of course the sellers want to sell their cars for a high price. So they usually set the reserve price reasonably high for the auction. On the other hand, the buyers are looking for a bargain when they buy cars at auction. In a case like this, when there is not much data on a similar car, neither the seller nor the buyer have anything they can use as reference; there can be a big gap in their price expectations. So we usually wait till the bidding ends at the auction by not bidding right up to the budget. We keep our bidding low. If the cars do not make sale, we apply for a negotiation and wait for the seller’s reply. This could be the way to go. Even if we do not make the deal, we can use this experience to go to the auction again next week.

To buy cars for our clients for the price they want to pay, we sometimes go through a few unsuccessful negotiations until the seller gives in. However we will lose if someone else comes up with a higher offer, so a successful negotiation is not always possible. There is no guarantee of cutting a deal. As for standard Japanese cars, because there are so many cars of the same model available, the sellers are not as aggressive as the sellers of the expensive imported cars; you can usually get a good bargain at the actual auction rather than taking it to a negotiation.

As you can now see, we use different strategies when we go to used car auction depending on the types of the cars you are after. So if you cannot make up your mind on what sort of a car you want, please ask us for some professional advice. We will do our best to help you get a car as cheap as possible.

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(Editor)
JPC TRADE CO.,LTD.
Kato building 4F, 1-1-2 Furuishiba, Koto-ku, Tokyo
Japan Used Motor Vehicle Exporters Association (JUMVEA)
TEL : +81-3-5245-7731
FAX : +81-3-3643-4955