Cars may end up in auctions from a number of sources, including police impounds, bank repossessions, trade-ins, private sellers, and local dealers.
Buying from an auction can save you some money, but it doesn’t come without its risks. Here are some things you will want to do before you go to an auction.
Find the right one.
Some auctions are only open to car dealers so they can fill their inventory while other auctions are open to the public. Research the potential auctions in your area to find the best fit for you.
Determine a budget.
Before you get too deep in your car search, you will want to take a hard and honest look at your budget and decide how much you can bid on a car. Commit to keeping the budget you set for yourself.
Go as an observer.
Before you go to the auction with the intent to buy, it might be in your best interest to attend an auction with the intent to watch. Big auctions may have multiple lanes of cars going at once. The auctioneer speaks incredibly fast. The rhythm of the incoming bids may be overwhelming and foreign if you haven’t been before. Taking the time to familiarize yourself with the process can help you so you don’t become a deer in the headlights of the car you want to buy.
It is not unheard of for dealers to bid on their own cars to increase the price. By watching, you may be able to identify someone who seems friendly with the auction team and bids without buying. Becoming familiar with shills beforehand might work to your advantage before you are up against one.
You may also pick up on patterns of prices when multiple vehicles of the same make and model are auctioned. For example, you may find that the first and second of a certain kind of car go higher than the third, fourth, and fifth of the same kind.
Research the potentials.
Often the auctions will list the inventory online for you to peruse before showing up at the auction. This is very helpful as it allows you to create a list of potentials, especially since you won’t be able to test drive a car before bidding on it.
There are a few things you can compare from online listings:
VIN. With a VIN you can search for that specific car on Carfax or Autocheck. Check out the history of branded title cars to include the number of times the car has changed hands and its history with accidents, hail damage, water recovery, etc.
Value. Using Kelley Blue Book, Edmunds, or NADA, you can figure out a fair price range for the car.
Risk. Some auctions will rate their cars using a “stoplight” system, where green, yellow, and red lights let you know the desirability of the cars. If a car with a “green light” has a mechanical issue arise, it may be arbitrated. Arbitration is not an option for a car with a “yellow light” or “red light” as their defects are known and listed.
Make and model. To avoid lemons, search out forums where car owners discuss issues that are prevalent in specific models of cars.
Be open minded.
Don’t limit yourself to one car. Have a list of possibilities that would fit your needs to increase your chances of winning a bid.
Familiarize yourself with the rules.
Each auction is held differently, so it is in your best interest to become familiar with the process of the auction you’ll be attending. Be sure to know what forms of payment they accept. Find out if the auction requires a (refundable) deposit upfront. Calculate what fees are collected by the auctioneer so you can know your total bidding budget. Be prepared to pick up the vehicle and provide payment in their timeframe (which is typically the same day).
Inspect the cars.
Auctions will typically let you see the cars in person before the bidding commences. Utilize that time to see the cars from your preferred list in person. This also gives you a chance to check the VIN number if it wasn’t listed online before the auction. You can also see dents and dings with your own eyes that might not have made it to the description online.
Stick to your budget.
At the auction you will have to make big decisions in a split second, and the promise of a car can tempt you to tiptoe over the amount you decided. The best way to save money is not spending more than you previously decided to bid.
Keep in mind that cars bought from auctions are purchased as-is. You’re buying all the scratches and crumbs you see, as well as any mechanical issues that might be lurking under the hood.
If you want the benefits of buying from an auction, but the prospect of navigating one is too overwhelming, you can find what you’re looking for in our inventory. Far more than just buyers, our team has years of experience in rebuilding cars. When it comes to branded title cars, we know if there are small problems that can be easily fixed, or if the car has serious problems that should be avoided. We can pass on some of the biggest savings available in the industry along with our 150-point inspection and Peace of Mind Service Contract that relieves you of headaches and worries.