10 Tips When Buying at a Car Auction
Buying a car, or indeed any vehicle, at a car auction can be quite daunting, especially for the amateur or...
Buying a car, or indeed any vehicle, at a car auction can be quite daunting, especially for the amateur or first time buyer. When you arrive at the auction you will probably be surrounded by a lot of seasoned professional buyers as well as knowledgeable amateurs and part time dealers and, as with any auction, it is easy to get carried away and end up bidding far more than you originally intended to.
Having said that, buying at a car auction remains one of the most cost-effective ways to buy a car, especially if you are on a budget, but there are hidden problems with the process and, often, hidden costs. If you are seeking a “classic” car or one which is rare or unusual then auctions may well be the only place you can find what you are looking for, unless there is a specialist dealer within reasonable travelling distance of where you live.
Caution is the name of the game. Identify the vehicle(s) that you are interested in, set a price limit based on the vehicle’s value and do not go over it. Stick to just the vehicles you have shortlisted and don’t be tempted at the last minute to bid on a vehicle that you are not sure about or that you have not examined in detail before the sale.
Just making that one more bid can end up costing you dearly. Be disciplined and view the process as if you were a professional dealer. It is easy to end up being the proud owner of a car that you don’t really want as much as you thought you did at the time when you got caught up in a bidding war with someone else in the room.
One piece of advice that keeps cropping up again and again is that you should make an effort to attend at least one, preferably more, car auctions before you actually want to make a purchase or are ready to do so. This will enable you to familiarize yourself with the fast-paced and often confusing procedures at a car auction and to avoid feeling uncomfortable, confused or even going into a mild panic. Everything seems to happen at a fast pace at an auction, this is true of almost any kind of auction – the auctioneer is always in overdrive so that he or she can get the whole of the catalogue covered in the time available.
You should also bear in mind that, to all intent and purposes, a bid at an auction is a legally binding contract between you and the auctioneers – you cannot usually back out or rescind your bid once you have made it so, once again, exercise caution when in the auction room.
Here Are Our Top Ten Tips for Buying at a Car Auction
Be the Early Bird – Arrive in Plenty of Time
Try to arrive at the auction venue early, get yourself a copy of the sale catalogue and decide which vehicles you are interested in and how much you want to spend. Usually the auction catalogue will be available in advance, online or maybe offline too – some auction operators will send you their latest printed catalogues in the mail, (usually at a cost), but with the advent of online browsing this option has become less frequently available.
The period before the auction is your opportunity to inspect the vehicles that you are interested in personally. Don’t be afraid to look very closely at what is on offer.
Check under the hood and look for some of the obvious signs of damage such as the use of fillers, paint patches that do not quite match, bubbling under the paint surface – which indicates rust that has be concealed, and so on. Inside the car, check for wet carpets and any unpleasant smells that be a sign of leaks and other problems that can be costly to fix.
Get an Auction “Buddy” – a Second Pair of Eyes Is Always a Good Idea When Buying at a Car Auction
If at all possible, try to find yourself an auction buddy – someone who knows a bit more than you do about cars and the problems that should be looked out for. For example, if you have a friend who likes to do their own car repairs then he or she could be well worth asking to accompany you to the auction – they may spot something that you could have missed. You may well be able to find a willing advisor at the auction itself but be cautious as they may be dealers themselves or agents working for other car dealers so their opinions may not be quite as impartial as you would like to think.
Hidden Costs – What You Bid Is Not What You Will Pay
When budgeting for your purchase please bear in mind that the amount that you bid for a car at a car auction is not what you will finally pay. Most auction houses charge a “buyers fee” on top of the hammer price, this is usually around 8-10% of the hammer price but it varies according to the price band of the vehicle in question. You would pay less, as a percentage, on a higher value vehicle than you would on a lower value one.
Some auction houses offer a membership scheme, which normally involves paying a fee, but which gives you a discount on the buyer’s fee. Obviously, if your purchase is a one-off then this would not be cost-effective but if you intend to buy multiple vehicles over time it may well be – find out what’s available from the auctioneers that you intend to use and do the maths – you could save some money.
Make Sure You Are Eligible to Bid – Register First
You can’t always just walk into an auction room and make a bid on a vehicle. In many cases you will have to register first. It is something you should check because you don’t want to get to the time of auction for the vehicle you want only to find that you cannot bid. As part of this process the auction house may check your credit worthiness with a credit reference agency, especially if you are taking advantage of a credit plan.
Sometimes you may be asked to make a payment in cash after buying a vehicle although most auction houses will accept credit cards. Check the payment methods and options that are available from the auctioneers that you choose to buy from – before you make a purchase.
Once registered you will normally be given a bidding number, on a card more often than not, and you should raise this in the air when you want to bid so that the auctioneer can clearly see it. If successful, the auctioneer or clerk will make a note of your buyer’s number and the sale will be written down to you. At some auctions you may be competing with other buyers in the room and on the Internet, as well as with telephone bidders.
Examine the Chosen Vehicles Carefully – Another Reason to Get There Early
Always be sure to examine the vehicles in the catalogue that you are interested in carefully, well before the auction starts. Try to find at least two vehicles of the type and age that you are interested in so that you have a fallback position in the event of being outbid for your first choice of car. If you are not likely to have time to inspect the vehicles on the day of the auction, before the auction starts, it is usually possible to view them the day before. This should be done in daylight, if at all possible, as problems are much more difficult to spot in darkness.
It is not usually possible to test drive cars that are for sale at auction so a visual inspection, preferably by someone who knows what they are looking for, is even more important before you take the plunge and decide to commit yourself to buying a car at a car auction.
Listen Carefully to What the Auctioneer Has to Say Before Bidding on a Car at a Car Auction
Always make a point of listening carefully to what the auctioneer has to say before he starts to take bids on the car that you wish to bid on. The auctioneer will read out the details of the vehicle before starting the bidding and give a clear description of the vehicle in question. Take particular care to listen to the vehicle’s selling description – this is a summary of things which could affect your decision to buy and includes:
A list of any known, major mechanical faults – if the vehicle is described as having no major mechanical faults then the vehicle should not have any serious faults with regard to the engine or its gearbox, the clutch mechanism, the braking system, the steering or the transmission. Any faults in these areas could be expensive to fix and result in the vehicle being off the road for several days if parts are not easily available.
Faults specified by the seller – the auctioneer would normally read out any significant defects that have been notified to the auction house by the owner or seller of the vehicle.
Listen carefully for any vehicle that is described as “sold as seen” – this means that the vehicle is being offered for sale exactly as it is and with no warranty at all, either by the seller or the auction house. If a vehicle is described as “Without warranty” it effectively means exactly the same thing – you are responsible for any faults that may come to light so please exercise caution before bidding.
Many car dealers are happy to buy a vehicle with certain faults because they know that they can rectify those faults fairly easily and at minimum cost. They are likely to be able to buy the car at a low price because of those specified faults and have factored in the cost of repair when calculating how much they can bid and still turn a profit on the car when they sell it on.
Vehicles for sale with an engineer’s report – this means that the vehicle has been expertly examined by a qualified mechanic or engineer and is being offered for sale based on the description contained in the report, which is often prominently placed on the car’s windscreen before the sale commences.
Many Cars for Sale at Auction Have an Interesting History – Do Your Research
Although you are generally safe with most major car auction houses there is sometimes a rogue element at work and it is possible that some cars find their way onto the sales floor with a few skeletons in the closet. The most common facts about a vehicle which are not always easy to discover are:
- Has the car been stolen? – this is fairly easy to check and there are services that will do this for you.
- Has the car been in a major accident where significant repairs were necessary? – again there are services around who will check this for you, depending on where you live.
- Is the vehicle the subject of any outstanding, (read “unpaid”), finance agreement? – again, a reputable vehicle checking service will highlight this.
- Is the mileage being shown on the vehicle accurate? Although falsifying vehicle mileage is more difficult than before, and illegal in most places, it is not impossible and can have a significant effect on a vehicle’s value.
At Your Service – Check the Vehicle’s Service History as Well
Everyone knows that a car needs to be serviced at regular intervals and preventative maintenance measure put into effect so as to avoid future problems. Routine tasks such as changing oil, brake pads, spark plugs and so on can lengthen the working life of a car quite a lot whereas if these things are not done problems ca occur even in a vehicle which is not that old.
Many vehicles offered for sale at auction are ex-fleet vehicles such as company cars and those used by businesses and government departments. Usually these vehicles will have relatively high mileage but, on the other hand, they will have been serviced regularly s they are less of a risk than high mileage vehicles that have not been looked after so well.
What Happens After the Sale?
If you succeed in bidding for the car that you want and when the payment has been made, it is your responsibility to remove the vehicle from the auctioneer’s premises as soon as possible. They will often require this to take place within 24 hours of the sale ending and this should be clearly stated in their documentation. Most auctions operate with cars coming in all the time, so they require the space for the next auction. It is important therefore to be clear about how you intend to do this because if you fail to do so you could find yourself liable for storage fees which can be substantial.
Many car auctions are carried out by major auction houses that have a delivery service themselves or, if not, they can put you in touch with one where you may get a discount. This is another cost that you will need to take into account when making your decision to buy a car at a car auction. If you have a trailer or have access to one then this could save you a significant sum of money. If you are sure that the car you have driven is drivable and you have insurance in place then the preferable option is to drive it away after the sale.
Looking for a Bargain? Car Auctions Can Fit the Bill, but Not Always.
It’s a commonly held belief that buying at a car auction can mean picking up a car for less than it would cost at a car dealer where there are high overheads to build into the price. This may be true in many cases, especially where the buyer is aware of any problems with the vehicle and is able to fix them cost effectively, but, if not, you should not ignore the great deals that can be had from car dealers. Remember to factor in the fact that dealers will normally be able to offer a warranty on the vehicle, which you won’t get at an auction, and you will be able to take a test drive before handing over your hard-earned cash. A wider range of finance options may also be available.
Check the VIN Number (Vehicle Identification Number)
The VIN is a universally applied identification code that is unique to the vehicle it is issued to. It is repeated on the vehicles registration documentation and is as close as you can get to knowing that the vehicle you are looking at is what it is claimed to be. The VIN can usually be found in the engine bay and / or on one of the front door frames. It may also appear in other places on various different vehicles but there should always be one so if you can’t find it, walk away.
Related Post: How to Sell a Car at an Auction
- Tips For Selecting A Car At An Auto Auction – Capital Auto Auction
- Car auctions: the complete guide to buying a car at auction – Auto Express