Guide to Buying at an Auto Auction
The conditions under which auto auction cars are acquired usually render them difficult or even impossible to sell through any other means. The cars for sale at an auction have typically been seized by the authorities or repossessed when their owners defaulted on their auto loans. The temporary new owners of the cars put them up for auction in an attempt to jettison excess inventory rapidly and recover at least some of the resulting financial losses.
Consequently, auction cars are generally terrific bargains, but they’re not without substantial risks. If you make a bid without adequate preparation, you could get stuck paying too much for a car that ends up a lemon. In this post, you’ll find suggestions on how to make an informed purchase at an auto auction.
- Arrange the financing ahead of time. If there is a vehicle you want at the auto auction, you’ll probably have to pay for it with a bank draft or personal check. Make sure you have a large enough balance in your bank account to pay for the car you like before you make a bid.
- Have an auto value guide handy. Informed bidders conduct their own on-the-spot vehicle valuations at auctions, and in order to do so, you’ll need a Kelley Blue Book or other guide with you at the time. The NADA also publishes a vehicle value guide that may be helpful.
- Get to the auction early and don’t go until the event is finished. You can’t possibly know what cars will be up for bidding on any given day, but the best bargains tend to surface at the auction’s start and end. Getting to the auction first thing also allows you to inspect all the cars up for sale before they find their way to the auction block.
- Check the backgrounds of the vehicles that interest you. Find the officials at the auction and inquire about the cars on which you want to bid. Record each car’s VIN (vehicle identification number); this will allow you to perform a background check on each vehicle. In many auto auctions, kiosks or stands are placed throughout the auction hall that allow bidders to perform these background checks on the spot. Additionally, ensure that every one of the car’s VIN stickers is identical. The VIN on the hood, doors, trunk, dashboard, and other parts should match. If the VINs do not match, the car may have been reconstructed with black-market parts or involved in a serious accident.
- Ask about the auction premium prior to bidding. An auction premium is what you must pay in addition to the car’s sale price to account for the services of the auction house. An exorbitant auction premium will ruin even the best bargain, so find out precisely how large the premium is prior to buying. Usually, the auction premium is stated as a percentage of the selling price.
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