Buying a car can be expensive if you don’t know what you’re doing. New vehicles lose a significant amount of value the moment they’re driven off the lot. Used cars offer more pricing flexibility but lack warranties and can have hidden issues that are hard to spot when you’re first car shopping. If you’re looking for the best bang for your buck, vehicle auctions provide another alternative where you can choose from a variety of vehicles all the while getting a great price.
Buying a Car at an Auction – Things to Consider
Here are a few things one must keep in mind while bidding on a car at an auction!
- Research Auction Options
The auto auction industry spans a range of event styles and consumer access. Broadly, auctions fall into:
- Dealer-Only Auctions – These auctions are often restricted to licensed auto dealers and the public cannot attend. These auctions have a large inventory of cars but it’s hard to get your foot in the door.
- Public Auctions – Open for anyone to attend and bid. Requires an auction membership or buyer’s fee to participate. More diverse selection of vehicle types, conditions, and values.
- Online-Only Auctions – Virtual auction events hosted over the internet. Convenient but cannot physically inspect vehicles before bidding. Risk of hidden issues.
- Live Auctions with Online Bidding – Hybrid model where vehicles are housed at a physical location but bids are placed electronically in real-time both on-site and online. Combines physical inspection with reach of internet bidders.
Smaller regional public auctions are likely the best starting point when you’re picking your first auction to attend. These smaller auctions often feature an assortment of vehicles sold by private individuals, dealers, leasing companies, banks, and government agencies. Even though there aren’t nearly as many vehicles as those seen at larger auctions, the smaller audience gives you the chance to bid against fewer people and you can then build out a successful bidding strategy.
- Inspect Vehicles Thoroughly
The cardinal rule when buying vehicles sight-unseen is caveat emptor: as a buyer you must beware! Auction houses provide limited information and no guarantees about the cars up for auction. Some have vehicle history reports available for review, but bidders need to verify vehicle records independently through resources like Carfax and Kelley Blue Book.
Visual vehicle inspection should cover all mechanical, electronic, and cosmetic issues. Look for leaks, rust, paint flaws, tire wear, brake pad thickness, irregular tire wear patterns, and check all systems such as lighting, electronics, air conditioning system, and more. Mileage and condition should be aligned with each other. Bring a socket set, flashlight, and OBD scanner if allowed. Test drives are rarely an option, but you should be able to at least listen to the vehicle start up.
These are all reasons why it’s so difficult to value a vehicle without an inspection. Even if you need to refinance a vehicle or get a title loan without an inspection, these options are always challenging if you don’t let your lender inspect the vehicle to confirm it matches its current resale value!
Equally important is to verify all the relevant vehicle documentation such as title history, accident history, flood damage, odometer accuracy, lemon law status, and service records. AutoCheck and NMVTIS reporting provide additional information. Without these checks you can be left with a vehicle that you don’t own or one that’s worth far less than the price you paid.
- Understand the Auction Process
While specifics vary across auctions, standard protocols create an orderly bidding process:
- Vehicle Display – Cars available for auction are parked in assigned rows at the facility. Attendees have a multi-hour window to inspect before bidding begins.
- Block Bidding – The auctioneer groups vehicles into groups of 5-10. Be sure to listen carefully to know which vehicle is up for bid.
- Reserve Prices – Consigners can establish a minimum selling price unpublished to bidders. If reserves aren’t met, vehicles are “passed” unsold.
- Fast-Paced Bidding – Vehicle auctions count on a fast-paced bidding system. Auctions can get very expensive and you must know what the bid increment is.
- Winning and Payment – The highest bidder wins the right to purchase the vehicle for the final bid price, although auction fees are also added on. Arrange financing beforehand, as payment is usually required within 1-2 business days.
- Set a Budget
When entering those adrenaline-fueled bidding wars at car auctions, seasoned participants know to armor themselves with ironclad budgets. Without clear limits spelled out ahead of time, even veterans risk getting caught up in the heat of battle and overpaying wildly.
Be real – factor in all those tacked-on fees and potential mechanical rehabs down the line. Plant your flag on a sensible ceiling price and refuse to breach that line, no matter the provocations.
- Bid Strategically
Navigating auctions’ fluid tempo demands blending vigilance with restraint. Wise bidders open cautiously, testing the waters on lower-priority rides before taking the plunge on prize models. Watch to see what others bid, then strike decisively when the time is right.
Rash spur-of-the-moment leaps rarely end well, whereas incremental escalations tend to serve. And should prices spiral beyond reason, summon the strength to disengage rather than chase sunk costs. Knowing when to pass on an auction isn’t a weakness, it’s the hallmark of any vehicle auction participant who lives to fight another day.
Conclusion
Play it right, and you can get a great deal at a vehicle auction and gone are the days when large companies and auto resellers dominated these auctions and got the best bids. But dream outcomes hinge on preparation when it comes to vehicle values, strategic bidding, and never losing perspective, no matter how much you want a specific vehicle. Set boundaries on the highest price you’ll go at any auction, stay disciplined and you’ll come out on top, most of the time.
