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Be Smart about Buying Cars at Auction

Be Smart about Buying Cars at Auction

Auto auctions provide the opportunity for smart shoppers to purchase a vehicle at a lower rate. On average, vehicles start at just a couple hundred dollars. Rarely does somebody pay more than $3,500 for an auto auction vehicle. This is because the purchase carries a certain degree of risk.

Auto Repairs Are EXPENSIVE


 

We’ve all been on the Internet at one point or another, doing a little car shopping research. When the budget is tight, we might find ourselves frustrated. How can I get a nice car without spending too much money? The answer could be by shopping at auto auctions.

 

Auto auctions are tricky, though. Many auctions post enticing photos of good-looking vehicles to lure the shoppers to the event. Later, there may only be one or two nice rides on the auction block. To make matters worse, there is little information available about the car. It could have a lot of problems.


 

Then again, for mechanics, car dealerships, and people who don’t mind a project, the auto auction is ripe with opportunity.

 

There are some questions that typically bubble up to the surface when somebody brings up buying a car at auction:

  • Are cars cheaper at an auction? By how much?
  • Are these auction cars good to buy?
  • How do auctions work for cars?
  • Why do people buy cars at an auction?
  • What do I need to bring to the auto auction?

 

All of these questions are relevant, of course. Buying a car at auction can be a gamble, but for some, it’s a move that pays off in spades.

 

How do I Purchase a Vehicle at the Auto Auction?

Buying cars at an auto auction can be an exciting process, or a grueling one, based on your preparation and perspective. In other words, if you go into it knowing what to expect, you will have a lot more luck!

 

Buying a car at a dealership is expensive in many ways. The dealership marks up the cars they may have bought at an auction. They’re looking for their cut in the transaction. However, they carry some liability in doing this. If the car is a total dud, you can (usually) hold the dealer responsible.

 

When you buy a car at an auction, you assume this risk. If the car is a total dud, your options are to find another willing seller or send it directly to the junkyard. 

 

At the end of the day, learning about an auto auction is a good idea if you want to shop at one.

 

Auto Auctions: Step by Step

The first step is to research whether your local auto auctions require a license to attend or make a purchase. In some domains, not everybody is available to participate. In general, if you see an announcement that says “open to the public,” you should be okay.

 

Dealer auctions are special auctions where only wholesaler auto dealers have access to the finds. These events do require a license.

 

Public auctions, on the other hand, do not. Anybody can come up. Many organizations require the buyers to pre-register, even if they’re not sure they’ll buy anything. It makes the transaction a lot easier for the auction organizers.

 

Another point to make is that auctions can be online or in person, especially in this day and age.

 

The typical cars you’ll find are repossessions (somebody didn’t make payments) or vehicles that were taken by a police department as a seizure or for evidence. Sometimes salvage vehicles (cars that should be going to the junkyard) make it to the auction block. Even totaled cars do sometimes.

 

Surplus vehicles might be sold at auction. The same goes for cars that were bought by a pawn shop, won in a bet, or cars that dealerships couldn’t unload at a price that suited them.

 

To make a long story short: Check out the cars on the market. Organize your bid, and get to buying!

 

What Do I Need to Do Before the Auto Auction?

Before the auto auction, you should organize your to-do list, especially if you are planning on buying a vehicle.

 

The number one tip is to research the cars you might see in advance. Some auction websites or postings list the cars that will be for sale. If the makes, models, and years interest you, see if the car is any good by looking up average repair costs, recalls, and common complaints.

 

If pictures are available, examine them closely. There are plenty of details that might not be caught by the untrained eye.

 

If the listings display the vehicle identification number (VIN), you are in luck. You can run that into a database to find out the car’s history, and that will give you an estimate of how much the car may be worth. For example, a perfect exterior could be covering flood damage and a salvage title.

 

You should also familiarize yourself with the current Kelley Bluebook prices (or Edmunds). If you know the ballpark values for used vehicles, you won’t be tempted to overspend on a car that isn’t worth it.

 

Open your mind! Flexibility, versatility, and quick thinking all need to be in your arsenal if you’ll be shopping for auction cars in the near future.

 

If you’re unfamiliar with auto auctions, look at the rules and policies of the one(s) you will be attending. If there are minimum bids you can’t meet, you shouldn’t bother attending. If you need to have a cash payment, you need to know that before you go.

 

Don’t be surprised if you are outbid on good cars. Everybody is there for the same reason after all- to get a great deal! If a car has very slow bidding, you may have struck gold. Then again, nobody could want it for a good reason. Be advised!

 

A good tip is to make a list of parameters you need and include those  must-have options. You should know right away if you won’t be bidding on cars that are more than 100,000 miles or require experience driving a stick shift.

 

A good rule of thumb is to beat the rush. 

 

By arriving nice and early, you’ll be able to scope out the cars (if allowed). You will also be able to check out the competition. Listen to conversations to see what people are thinking about bidding on. Be careful not to judge based on appearances.

 

Sometimes the people in the most regular of outfits are sophisticated buyers who know the market inside and out. Auto auctions are full of surprises.

 

There are no rules that say you can’t bring a friend who happens to be a mechanic if you aren’t one yourself. If you know somebody who’s great with cars, bring them along for the ride! They will be able to spot a dangling muffler from a mile away.

 

Even if the VIN wasn’t available in presale phases, you might be fortunate enough to find it during the walkthrough. This could mean that you’ll be able to do a quick search on a smartphone to see if anything bad turns up on the report (hint: Carfax).

 

How Much Money Should I Bring to an Auto Auction?

If you’re worried about bringing enough money to the auto auction, you’re likely ready to buy a car.

 

The main rule here is to create a budget, and don’t blow it. With cashier checks or cash only options, this can be pretty easy. There’s already a built-in limit. How much can you afford to spend?

 

Some auto auctions have minimum bids, so you should at least bring that much money. If there are other bidders, though, it won’t be enough. You’ll have to think twice about how much you’re willing to invest in an auto auction car before you head out to buy.

 

On average, auto auction cars don’t cost more than 3,500. This is because they would be too much of a risk after this price. However, classic cars, luxury vehicles, and special cases absolutely surpass this figure.

 

In other words, make a financial plan before you head to the auction. If you’re bidding, you don’t want to get swept up in the moment and make a promise to buy a car for more money than you can reasonably afford. Be prepared to back down! This is not the day to flex.

 

What are the Red Flags to Watch for with Auto Auction Cars?

Sometimes when we tell our friends and family that we’re considering buying a car at an auto auction, they try to talk us out of it! What are the red flags that will help you avoid getting ripped off?

 

You have to remember that the price that you’re thinking about paying might be higher after fees. 

 

Taxes and licenses may apply. You might also find you have to pay what’s called a buyer’s premium. In other words, this means that you will pay a price to the auction organizers.

 

In some places, it’s a flat fee. In others, it’s a percentage. Learn the rules and brush up your mental math.

 

Sometimes auction cars aren’t a great idea. What happens is related to psychology. We’re optimists, right? We find a car that LOOKS fantastic, and that minimum bid sounds too good to be true! However, if you are thinking of buying a FORD F-150 for just a few bucks, expect competition.

 

Another drawback is that picky drivers may not be satisfied. When it’s an auction, the inventory doesn’t allow buyers to choose what features they want on a car or to specify they only want a used car with a bluetooth radio option. You basically get what you get.

 

It’s highly unlikely test drives are allowed, so you’ll never hear how that engine purrs. This could mean bumps in the road, vibrations in the steering wheel, and squeaks in the brakes may be hiding behind the exterior of that flashy model.

 

If this happens, you could be stuck with a lemon. If the car is no good, but looks great, you could try to sell it again (not advised). You could also send it to a junkyard (moreso advised).

 

People who are against the auto auction tend to hate making large cash payments as is usually the case at these events.

 

Another concern should be about cars that were in a flood, salvage vehicles, totaled vehicles, and suffered in other insecure situations. 

 

Some people get lucky, but plenty of people drop a few thousand bucks on something that will find itself in shipshape. It could be a total loss.

 

In general, you should steer away from salvage titles unless you are a professional mechanic or know how to collect classic cars.

 

SOLD! An Auto Auction is a Gamble, but it’s Fun!

Auto auctions are thrilling places where newbies intermix with seasoned professionals to shop used cars, junk cars, salvage cars, and hidden gems. Buying a car at an auto auction could be a dream come true or a total nightmare.

 

Buying cars at auction gives some shoppers buying power they would know nowhere else. The events are also suitable for professional mechanics, dealership owners, and classic car collectors. 

 

If competing with this crowd scares you, or you’re worried about buying a broken car, don’t go the auto auction route.It’s simply not in the cards.

 

Instead, you could buy a vehicle from a dealership, Facebook Marketplace, or in a private sale. These options don’t have such high stakes.

 

Whichever route you choose, may luck be on your side!