Yo,
I happen to work at shoreham vehicle auctions.
I have only been there for 3 months but it is a great place to be. Not good money at all but it's an easy job to do.
Most cheaper cars are part exchanges from local dealers with a few private entries. It is pot luck what may or may not be wrong with them.
We also have a contract with motorbility and these cars are normally 3 years old or newer. They are more expensive but cheaper than the private or trade market. The most frequent problem with these are scratches, dents or just pure filthy inside. Some however are immaculate.
A few local dealers and even some of the bigger car supermarkets (no names) buy 10-20 per sale.
One of the worst things i find having to move these cars around our place is some of them absolutely honk. Fish, sick, cheese smells are evident in maybe 1 in 20 cars. It really gives you an insight into how these people live.
Over all though, i see major benefit from buying an auction car due to the low cost. While 'sold as seen' is correct, all major and some minor faults are disclosed and if a problem exists that is not advertised, refund or discount is available.