Typically a dealer gets a buy-bid when they take in a higher end car like an M3, so they're usually sold before the paperwork is even finalized on the trade-in. I'd say there's no reason to worry about buying from auction if M3 in question is 4 years or more old or has 40k miles or more because a BMW dealership most likely isn't interested given the fact they can't/don't want to CPO the car. If it's a low mileage 1 or 2 year old M3, I'd be a little suspicious.
Example of that is a local outfit that buys from auctions at wholesale or below and then passes the savings onto its customers. Or that's what they claim anyway. I hit them up about an e90 sedan that sounded too good to be true. Pulled the Carfax and it was a Lemon Law buyback down in California and had just been to a local dealer a week or two ago to have the ECU examined. No. Thank. You.
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