Auctions are a great way to generate auto sales. Buyers get to purchase a vehicle at what the market dictates based upon competitive bidding. Sellers benefit from auctions because they do not have to pay for long term sales space, utilities, or employee sales wages. Common auctions in the U.S. take place on the Internet and at various locations across the nation.

Things You Will Need
  • Business Bank Account

  • Business License

  • Tax ID

  • Auction Location

  • Automobile Inventory


Review your current finances and make sure you are able to commit at minimum $2500.00 to start up costs that go towards licensing, marketing, and automobile inventory.

Make time in your schedule for auction and business development. According to the U.S. Government, most businesses fail in the first two years due to lack of proper management. Set aside no less than 3 hours a day to organize your auto auction.

Research your local competition and understand the role this plays on your business. If there are multiple auto auctions in your area consider moving your location.

Write a business plan outlining your business name, mission statement, annual goals, and method of auction. Decide whether you prefer an online auction or physical location.

Open a business bank account in the name of your auto auction. Do not commingle personal funds with company funds. Pay for business costs and deposit payments with your business account.


Register your business name and obtain the necessary business licenses from your Secretary of State's office. Each state has different requirements for obtaining business licenses but expect to pay from $100.00 - $500.00.

Obtain a tax ID from the department of taxation in your state. Understand your state's tax laws on auto sales and auctions.

Find a suitable location to hold your auto auction and inventory. Large empty lots that allow recurring events work best. Having a lot that allows you to come back and reuse the space saves you the time on scouting new locations. Consult a commercial real estate professional in your area if you are not familiar with short term land leases before entering into a contract.

Buy inventory for your auto auction. Keep in mind when purchasing inventory you need to buy vehicles below market rate in order to turn a profit. Consider government auto auctions and auto wholesalers as inventory sources.

Market your automobile auction. Send out mailers and print advertisements to prospective buyers. E-mail friends, family, and associates to generate interest in your auto auction. Hold promotional events and give away free items.


Open your auction for bidding. If you have an online auction, track results and reply to e-mails quickly. Hire an auctioneer or act as the auctioneer yourself if you have a physical location. The auctioneer conducts the auction and processes the sale.

Follow up with auction winners and make sure the payment is processed and the vehicle is delivered.

Keep records of all auction results, finances, and client contact information.


Educate yourself thoroughly before starting an automobile auction as it requires a financial risk.