Buying a car at auction is a great way to save money. If you know what you’re doing, it’s relatively easy. Learn about the pros and cons and how to keep safe.
Buying a car at auction has increased in popularity with first-time car buyers finding a large range of different makes and models to choose from with low kilometres too. You see, many car auctions are going on around the country every day including online car auctions too. Many specialize in repossessed, seized or foreclosed, surplus, government including ex-police and general fleet vehicles. Let’s take a look. Also, salvage vehicles including flood-damaged cars.
How Do Car Auctions Work?
A car auction is a public event where dealers, individuals, and even government agencies can buy and sell cars. Dealers need to have the cash on hand to buy their inventory of cars. Individuals may be looking for a specific car that they want to buy or sell. Government agencies may need to get rid of seized vehicles or repossessed cars.
There are two types of auctions: live auctions and online auctions. Live auctions are the most common type of auction because they allow buyers to inspect the items before bidding on them. Online auctions are good for sellers who cannot attend the live auction themselves, but it is more difficult for buyers to examine what they are buying because they can’t see it in person before bidding on it. keep reading for my bonus tip on how to minimize the risk when buying from an online car auction.
But the thought of buying a car at an auction can be somewhat scary and it has its negatives for example you can’t test drive. So this car auction guide takes a look at the pros and cons of buying a car at auction and gives you expert tips and tools so you can minimize the risk.
What Are The Advantages Of Buying Cars At An Auction?
Buying cars at auctions is a great way to get the car of your dreams. It is also a good way to get a car without having to pay the full price.
Many Types Of Vehicles To Choose From
The benefits of buying a car at auction are that you can buy any type of car that you want, and there are no restrictions on what you can buy. With car auctions, you can get savvy by doing all your research from the comfort of your own home or office. You can check out all the types of vehicles online with new makes and models being listed frequently and check the auction condition reports as well.
Knowing what you need and want the vehicle to do for you, family, work, or business before categorizing the vehicles into specific groups, like SUV, 4WD, and commercial vehicles will help you get started.
You Can Get Great Deals
Trying to find the real bargains can be difficult for those that are not professionals like car dealers. Let’s face it they will always have the advantage because that’s what they do all day every day. So that’s why you need to focus on large reputable car auction sites that are open to the general public.
You have the opportunity to purchase vehicles for less than their retail price, which can be beneficial if you’re looking for a deal. When you buy cars at an auction, there are no hidden fees or charges. You know exactly what you’re paying for because all charges are included in the final bid price.
If you’re buying near new vehicles it may still be covered under the manufacturer’s warranty. Kind of like having the best of both worlds.
Can Be Quick And Easy
After you have done your homework and gained the knowledge and confidence it’s usually a straightforward process to buy an auction car. Some auctions are open 24 hours
What Are The Disadvantages Of Buying Cars At An Auction?
Can’t Always Test Drive
Not being able to test drive the vehicle can be a little hard to accept but if you do all the checks mentioned below and follow the steps in my free Street Smart Tool Kit the risks can be minimized. Also, remember to look for tell-tale signs of how the vehicle has been used and prepared for sale.
Also, you may see the terms, vehicles sold at auction “where-is” and “as is” emphasizing consumers usually have no come back if something major is wrong.
Not Everyone Can Buy A Car At Certain Auctions
Some auctions are dealer auctions only so they’re not open to the public. Just check this before attending so you’re not wasting your time.
How To Buy A Car From Auction?
After you have done all your research online and you want to attend an auction be prepared by registering to attend before you arrive to cut the queue. Note down the lot numbers of the items, print out the auction catalogue, and check out payment options like do they accept credit cards and what are the charges. Also, make sure it’s a public auction, not a dealer-only auction.
I also suggest you take advantage of the free buying guides that many companies offer. This will help you attend an auction and not be overwhelmed with the process. After reading you should have a complete overview of the process and understand the ins and outs to make you a confident buyer.
If you know exactly the type of car you need or want, have educated yourself in the market, and know exactly how much you want to pay for the car and you have an absolute upper limit (can’t exceed) you are nearly there.
Most auction sites encourage you to check the vehicle out in person to eliminate any possible misunderstandings but this also favours the auction sites too because inexperienced buyers can end up buying with their emotions and paying more. So go in with a clear plan, and budget and stick to it!
Are Buying Cars From Government Auctions Good Idea?
Government auto auctions offering ex-government vehicles are usually the best vehicles to buy at auctions. If you’re buying your first car this can be a good way to get a late model car with a 5-star safety rating. The vehicles are more likely to be one owner, have good service history with a full documented service book, and limited wear and tear around the interior. There are government auctions held around the country all the time like QFleet vehicles for Auction.
Fleet Car Auction Cars Sell For Less Than Book Value
Fleet car auction where most vehicles are used as a sales rep’s car. These vehicles may have higher than average kilometres but they’re still a great buy because at an auction they sell for less than their book value. They nearly always have a full dealer franchise service record and the interior is usually in good condition. Most times the back seats have never been sat on.
There are also vehicles from ex-rental companies that can be worth checking out. They usually have good service history too.
Buying A Repossessed Car At Auction
Ever wondered what happens to vehicles seized by authorities because of various reasons? They end up at a Repo auto auction where you can save thousands. These vehicles may have been seized because of a raid or just too many traffic tickets.
Well, once the government no longer needs the evidence or banks have to foreclose on a debtor the vehicles usually find their way back onto the market via an auction. This is how you can save thousands on the most popular makes and models.
Of course, there are certain risks when buying from repo car auctions but the risk level is what you make it. You have already started to lessen the risk by reading this article, and if you continue to read you will be able to locate, research, and buy vehicles in a much smarter way.
Repossessed car auctions are usually held once a week depending on your location. Repo firms prefer auctions as a way to recover their loss easily and quickly. For the buyer, it usually means significant savings. These vehicles are usually near new and are being sold at repo auto auctions because their owners didn’t make their payments, and not because they have mechanical problems. But be careful as some owners may damage the vehicle before it is repossessed.
Advantages Of Buying A Repossessed Car
The obvious advantage of buying from repo auctions is the price but like all auctions, you still have to follow my free used car inspection checklist and control your emotions when bidding to make buying from repo auto auctions worth it.
- Most vehicles are late model and are in new-like condition
- There are many European prestige models like BMW, Audi, and Mercedes-Benz to choose from
- Many different types of vehicles like SUVs, ATVs, trucks, motorcycles, buses, and even boats you can bid on
- Most vehicles have depreciated in value significantly since leaving the dealer showroom and you can take advantage of this
Where To Search For Repo Car Auctions Online?
You can go to popular sites like Pickles car auctions. Here you can find repo cars scheduled for the live auction.
How To Find A Mechanically Good Car From A Repo Auto Auction?
Now, let’s be honest I reckon you’d have to be pretty lucky to find a repossessed car in perfect condition but that doesn’t mean they don’t exist either. The first thing is to do a complete vehicle history check. You can do this from the comfort of your own home so it’s a good place to start. By doing a PPSR check you can get an understanding of the vehicle’s history and see other important information that you need to know before continuing.
Once you have done all the checks you can do from a computer on the vehicle you’re interested in then use your free used car inspection checklist that you got earlier so you can spot the lemons and make sure the vehicle is mechanically sound.
How Much Cheaper Are Cars At Auctions?
For cars bought at auction and prices paid for cars recently sold in your area see Manheim auctions. Their guide gives you the make, model, year, location, and other information. You can use this to compare auction prices with vehicle market value for popular makes and models to see how much you can save.
What To Look For When Inspecting A Used Car Before You Buying A Car At Auction?
The best thing to do is to make sure that the car has a clean title, which is issued by the state for cars that are not salvaged. Once you have gotten the Vehicle Identification Number (VIN) from the vehicle for sale you can follow my step-by-step guide on how to do a vehicle finance check and get the complete car information (most important) too.
Also, if you don’t know what to look for when inspecting a used car before you buy it from an auction, then grab my used car inspection checklist and follow the steps.
Take the time to inspect the vehicle and establish if the vehicle’s condition inside, outside, and underneath are consistent with the age and kilometres travelled. Also, does everything match the auction’s condition report including kilometres travelled?
Ask to view the logbooks and more importantly the service book. Look for the servicing dealers or service centres then call them to verify:
- Recalls that have been done and any outstanding
- Any reported problems
Some Car Auction Buyer’s Tips
- Make sure you know the absolute maximum you are prepared to spend and know more! Remember you have to include the administration fees, car insurance, and other on-road costs so make sure you calculate that in. Knowing how much to pay is important but you have to try and offset the risk at the same time. Especially true if you’re buying from an online car auction sight unseen.
- Make sure the savings cover any surprises when you drive away. What I mean is, because you usually can’t test drive the vehicle you’re interested in you may find some mechanical issues when you drive away. Like, in the drive-line or transmission or the clutch may be slipping. If you have paid well below market value then it doesn’t hurt so much when you need to put money back into it.
- Just remember the maximum price you are prepared to pay and stick to it. Also, remember there will always be another opportunity if you miss out.
- Avoid salvage titles unless you are made aware of the true underlying problems with the vehicle. These are cars written off by insurers due to a variety of problems ranging from accidents, water damage, vandalism, etc
Should I Buy A Car At Auction?
In summary, I think if you’ve read this article,
- Done all the necessary online VIN checks to make sure there are no red flags on the car history report.
- Inspected the vehicle in person so you have minimized some risks
- Have a budget – the price you’re prepared to pay for the car and stick to it
- Control your emotions (easier said than done)
then you should be more confident to bid on the car. Of course, if you don’t like a risk I understand buying a car at auction may not be for you.