Online car auctions are the hot tips for the car buyer in search of a used auto. Auction events held live are another venue for the budget-conscious consumer hoping for a killer deal. Learn how to buy a car at auction without getting a lemon or losing your shirt.
Qualify for the Auction
Buying a car at auction is a bit more complicated than showing up with a wad of cash in your pocket. Some auctions are restricted to dealers; others are open to the public. Some auction houses offer financing as part of the used auto auction; others require that you come with cash, a credit card or a cashier’s check. Online car auctions work along similar lines.
Tip: Visit the website of your favorite auto auction and learn about buyer requirements. Make sure you meet these requirements before the date of the auction. This is also a good time to consider financing the purchase with outside lenders, such as credit unions or banks.
Know the Fees and Incidentals
Yes, it is true that buying a car at auction might lead to huge savings. It is not unheard of to get deals that fall well below the Blue Book value. That said, note that the auction house has the option of inflating the price after the fact. Know about the types of fees and charges you are required to pay, have the option to pay, and must pay — to third parties.
Tip: Ask about a buyer’s premiums. It is not unusual to be charged 10 percent of the purchase price. Other possible auction house fees are documentation fees, smog fees, and transportation fees. Choose your auction house wisely; plenty waive all or some of these fees to stay competitive! Note also that third-party charges may be inescapable; examples include the sales or use tax, registration- and titling fees payable to your state of residence.
Kick some Tires
Learning how to buy a car at auction is not too different than buying a vehicle from a private party. You go check out the car, kick the tires, look under the hood, and take a look at the VIN.
Tip: Online car auctions let you see photos of the cars and give you access to the VIN. Run a car history check! An in-person auto auction offers a preview period. Sometimes this is the week leading up to the auction; at other times the preview period is limited to two or three hours before the actual event. Unless you know what to look for in used cars, bring along a buddy who does.
Do the Homework, make a List and check it twice
If you are new to buying a car at auction, take advantage of the preview period. Go home and research the cars that interest you. Know what their Blue Book values are, how much it will cost to insure them, and also find out what your tax bill looks like. Verify that valid titles and paperwork are available for your chosen cars. From there, compile a list of 10 to 20 vehicles that really interest you and that fall into your general price range.
Tip: With this list in hand, check out online car auctions and other used auto auction venues for cars of similar makes and models. Is your target auction the cheapest in town? Remember to also compare auction house fees!
Bid like a Pro (or: Know when to fold ‘em)
Stand close to the auctioneer. The professional knows to look for serious buyers, but standing in the back can make it difficult to hear and you may be too late to bid. When the bidding goes beyond the Blue Book value, stop. Wait for the next vehicle.
Tip: Attend a weekday auction held in the morning. It limits the number of walk-in buyers. This in turn offers you a better chance at getting the car you really want.