Are you among those who keep on asking the same question to themselves: “How do I buy a car at auction?”? Many people think that car auctions are only for dealers when in fact many of these events are open to the public. A successful bid requires you to do your due diligence in advance and maintain a strategy on the day.
When applied correctly, this method can help you buy a new car to steal. If you want to get top dollar for your next car, here’s more information on how to buy a car at auction.
What is a car auction?
- Car auctions are events where banks sell repossessed or confiscated cars to the public. A repossessed vehicle is a vehicle that is repossessed by a bank from the original owner due to non-payment or other reasons.
- These auctions are usually organized by the banks themselves or by auction houses that specialize in selling repossessed and confiscated vehicles.
Why should you buy a car at a car auction?
There are several reasons why you might want to buy a car at a bank car auction. The main reason is that you can usually find well-priced cars in good condition. Banks want to sell these cars quickly to recoup their losses, so they often price them lower than you’d find at a traditional dealership.
Because vehicles are recalled or confiscated from different owners, you may find vehicles with different makes, models, and years of manufacture. Ultimately, buying a car from a bank car auction can be a simpler process than buying from a traditional dealership.
You can avoid the negotiation and sales tactics often associated with car dealerships.
How to buy a car at auction
Now that you know more about the different types of car auctions available to you, it’s time to take a closer look at how they work.
1. Do your research
Before you can buy a car at auction, you need to find an auction house, online or in person, and do some research. Find out the company’s reputation and the rules and regulations that govern how they run their auctions.
Once you’ve found an auction house you’re happy with, you can start looking at their vehicle auction catalogue. Many companies will list this information before the big day. Do your best to identify the cars available at auction and decide which one has piqued your interest.
2. Set a budget
Once you’ve shortlisted, you should have an idea of the fair market value and condition of each car you’re considering. This will help inform your budget. You can use industry guides like Kelley Blue Book (KBB) or Edmunds to get an idea of your car’s current value, as well as used car sites (like CarFax) to get a report about the history and current value of cars.
Remember that many cars at auction are sold as-is, so the cost of necessary repairs and shipping the car off the lot should also be factored into your budget.
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3. Register for the auction
Next is the time to register for the auction. For best results, make sure to do this well before auction day. Usually, signing up is simply a matter of filling out paperwork and applying for a credit card. A credit card will be used to pay the required registration fee.
4. Vehicle Inspection
On the big day, it’s extremely important to inspect any vehicles you have on your list. If you’re participating in an online auction, you’ll usually be limited to seeing photos of the car, so be sure to scan them carefully for any signs of damage. But if you choose the public auction route, you will have the opportunity to inspect the car in person.
Most auction houses won’t let you test drive it for liability reasons, but you can do a visual inspection. Remember to look for rust, dents or scratches, check the windshield for cracks and check the tyres. Also, don’t forget to look inside the car.
5. Receiving bids
Once the inspection is complete, it’s time to start bidding. Each auction house sets its own rules for how bidding works, and each auction house sets its own pace. Get familiar with both first.
Sometimes it’s a good idea to submit a low bid right after the auction starts, just to get a feel for how the process works. After that, it’s mainly important to follow your instincts, but also make sure to always keep your budget at the forefront of your mind.
6. Pay and transport the car
If you are lucky enough to win the auction, the next step is to pay and transport the car off the lot. Most auction houses expect to receive payment immediately, usually within 24 hours of the auction.
So make sure you’ve done your research on accepted payment methods and are ready to spend some money. From there, it’s your responsibility to complete the rest of the paperwork and transport your new vehicle to its final destination.
Types of Car Auctions
Not all car auctions are created equal.
Public Auctions
As the name suggests, public auctions are open to the public, meaning anyone can attend and bid on cars. If you plan to participate in the auction, you will usually have to pay a small registration fee.
You can find public auctions in your area by searching online or contacting local car dealers for more information.
Online Auction
Although public auctions take place in person, online auctions are available to anyone with an Internet connection, regardless of location. As with public auctions, you may be charged a nominal registration fee. You can find online auctions by searching the Internet or contacting local auto dealers.
Dealer auctions
Dealer auctions, on the other hand, work a little differently. Generally, they only allow approved dealers to participate in the auction, although some may open certain parts of the auction to the public. You can also work with an agency contractor who will submit bids on your behalf, but this service may incur additional fees.
In this case, you will typically need to provide proof of your license as well as pay a fee during the registration process.
Tips for Buying a Car at an Auction
If you’re considering buying a car at an auction, here are some tips to help you succeed:
Watch the auction as a spectator first
You don’t always have to bid when you bid at an auction. Consider attending one or two as a spectator first. This will help you get a handle on the rules without having to worry about risking your hard-earned money.
Bring a mechanically inclined friend
If you have a friend in the auto industry, don’t hesitate to take them to an auction. This can be especially useful when inspecting a vehicle.
Stick to your predetermined budget
When bidding, it’s easy to get caught up in the rush and agree to overspend. But there’s not much room for forgiveness when you buy a car with cash, so make sure you stick to your budget as much as possible.
Don’t be afraid to walk away
You don’t have to buy something at every auction you attend. If the bid on the car you’ve chosen is too high or you don’t see anything that catches your eye, you can put down the paddle and walk away. You may find better options in the next auction.
Conclusion
Buying a car from an auction can be a great option to save money on your next car purchase. By following the steps outlined in this blog and doing your research, you should be able to find a vehicle that fits your needs and budget. With a little patience and persistence, you can find a good price for a car at a car auction.
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