That may be dependant on what part of the country you're in, David.
The Yellow Checker Cab Co. we have here buys retired police cruisers exclusively. This is due to PI package-optioned cars having the external oil and ****** coolers plus a considerably beefier suspension makes them ideal candidates for the severe duty seen by your average taxicab (FWD cars make very poor cabs, btw...)
The woman that owns Yellow Checker here buys all her cars at auction in Longview (dunno what part of TX you're in so I dunno if you know where Longview is) from some retired judge over there that runs auctions on used/retired city and county owned vehicles - including the police units.
Excepting having all the decals, lightbars, and whatnot removed there's no difference between the cars that get auctioned there and the ones still in use by whatever law enforcement agency they came from.