The purchase of vehicles in auctions Auctions are gaining significant traction in the Brazilian automotive market because they offer substantial profits, as the cars sold through these transactions are priced much lower than those in the conventional market, which is measured by the FIPE Table. We've shown several times that the profit margin on auction cars is substantial. 

Therefore, as important as buying cars this way is, it's also important to learn how to calculate that profit margin and measure the return on investment in an auction car. 

It is precisely because of the prices practiced in this segment that more and more people have considered the possibility of profiting from the subsequent sale of automobiles purchased at auctions. 

Although cars are cheaper, it's necessary to know strategies to make this happen profitably and safely. 

In today's article, our experts will teach you how to measure profit from auction cars and how to increase your profit margins.

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Profit from buying a car at auction starts with the return on investment, also known by the acronym ROI. 

The acronym ROI originates from the English term – Return Over Investment. 

This is a metric widely used in marketing and financial reporting. 

The main goal of ROI is to measure the amount of money earned in relation to the money invested in a given operation or transaction. 

Furthermore, the tool can show which options offer the highest profit potential, which choices are more financially positive, and which should be reconsidered because they don't yield a good profit margin. 

In the world of auctions, this is an interesting indicator that allows you to take advantage of a range of opportunities and secure more profit with auction cars. 

The simplified formula for calculating the return on investment in a auction car It's simple. 

You need to subtract the price at which the car was sold from the price it was paid. In other words, revenue minus cost. 

After that, you need to divide that result by the cost itself and multiply by 100. This will give you the ROI you obtained from buying and selling the vehicle acquired at auction. 

Let's give the following example to make it easier!

If you bought a car for R$ 20,000 and then sold it for R$ 25,000, the ROI formula would be as follows:

R$ 25 thousand minus R$ 20 thousand divided by R$ 20 thousand multiplied by 100%.

The result would be equal to 25. That is, this means that your return was 25%. A pretty interesting profit from an auction car, isn't it?

To ensure you get the most profit from auction cars, you need to know the main characteristics of these types of vehicles. 

Contrary to what many people think, this type of event doesn't only involve vehicles with damage or defects; it's relatively easy to find models in excellent condition. 

Most of the time, the vehicle is made available by financial institutions when the previous owner has failed to pay the loan installments.

There are also judicial auctions, where vehicles are put up for auction to settle debts the former owner had with the courts or the tax authorities. 

In these cases, it is possible to find cars, motorcycles, trucks, pickup trucks, vans, and even buses in excellent condition, requiring no repairs or maintenance. 

These vehicles can cost up to 50% less than the prices charged in the market, prices are determined by the FIPE table, for example. 

After learning what return on investment is and how the calculation works in practice, and what the main characteristics of auction cars are, we will now show you what factors influence the profit margin when reselling an auction car. 

Understanding these points is crucial for conducting even better business in this area. 

The state of preservation is definitely one of the items that most increases the value and consequently brings greater profit to a car sold at auction. 

This means that, most of the time, even older models tend to be in high demand if they are well-preserved. 

Therefore, it can be a good idea to buy a car at auction and then carry out minor repairs, especially to the paint and bodywork. 

There's really no denying it.

There are some brands in the automotive market that generate more interest from buyers than others. 

Similarly, lesser-known or lesser-known car manufacturers can make it difficult to sell and eliminate profit margins on auction cars. 

Therefore, whenever possible, choose brands that have good sales volume. 

Just like the brand, the vehicle model also has a significant influence on the profit that can be achieved in the negotiation. 

The most popular, and consequently most affordable, cars generally end up being in higher demand in the Brazilian market. 

That's because those interested aren't always able to save up enough money to buy higher-end cars. 

Focusing on popular models that lead sales is one of the best strategies to guarantee a good profit margin with auction cars. 

Also known as optional extras, these are highly sought-after items in cars at the time of purchase, both those focused on safety and those related to vehicle comfort. 

Few people are willing to invest in a vehicle without power steering or air conditioning, for example. 

This doesn't mean you can't make a profit with "nude" models, but you'll likely need to negotiate a bit more, or lower your profit margin. 

Maintenance is another important factor in increasing profits from auction cars, as many people prefer to buy models that have at least had the maintenance scheduled by the manufacturers. 

If this is not the case with the vehicle you purchased at auction, it's worth finding a reputable mechanic and getting your car serviced properly.

Keeping receipts for maintenance work gives you greater negotiating power and consequently guarantees you more money. 

Securing or even increasing your profit with auction cars can be achieved through simple actions. 

However, to achieve ever greater gains, it is necessary to follow some essential steps and adopt some smart strategies. 

The first step is to carefully research until you find authorized and secure auction houses where you can purchase the vehicles you intend to sell. 

Next, you need to look for more popular models and brands to make your future negotiations easier. 

Finally, be sure to analyze the points we mentioned above that influence the demand for these vehicles. 

Now that you've learned how to calculate profit margin and return on investment for auction cars, believe me: This is the path to your financial freedom. 

The auction vehicle market is quite promising and offers excellent profit margins for those who know how to take advantage of the opportunities. 

If you're just starting out in the business of buying and selling auction vehicles, did you know there are mistakes you shouldn't make in this type of business?

To help you avoid mistakes and ensure good profit margins, our experts have created a guide so you can only make successful deals. 

To learn more, just click the button below!