10 Things You Should Know When Buying Cars at Auction
Be careful. This is where unsalable cars go to die.
As Edmunds.com puts it, “If a vehicle has been traded in, leased, repossessed or totaled, it will find itself among the nearly 9 million vehicles that are purchased each year in an auto auction.” That doesn’t mean every car on the auction lot is junk. It just means lemons are out there, so be suitably suspicious and thorough in your inspection.
Be prepared to pay cash.
You will need cash or an approved loan, if your bid wins. If you plan to pay with a loan you have already secured from your bank, be prepared to cover a deposit once your bid wins. Find out in advance which credit cards are acceptable for this purpose. There will also be taxes, title and registration fees. If you’re financing the purchase of your car, you’ll likely be required to carry collision and/or comprehensive insurance by the lending agency.
Cars are often touched up, buffed and polished to a sheen for auction. This does not guarantee a solid car. Always check the car history, and see if VINs match between the dash, door and other points of identification.
Sellers may hide problems.
There are all kinds of masks and foils that can make a faulty engine seem clean and sound. If you don’t know the tricks that sellers may use to hide trouble, bring a friend who does or stick to used car dealerships. There are no guarantees or warranties at public auctions.
Banks own the best inventory at the best prices.
…In general. Edmunds.com advises that these are the vehicles to look for at public auction. They are usually repossessed cars and trucks that the lender just wants to sell at a decent price to recoup losses. Make sure it is a reasonably well maintained car and that the interior is in good order, as these are often problem areas for repo cars.
Beware the used car dealers selling at auction.
Most used car dealers prefer to sell to customers, other dealers and dealer auctions. If a car is too far gone to sell in any of those ways, they resort to the public auction. Take a second, third and fourth look at used car dealer offerings at public auction. Things may not be what they seem.
This will get kind of crazy.
Car auctions move fast and carry a lot of intensity. It can be easy to feel rushed and pressured to make a decision, so be prepared to tell yourself to slow down if you feel unsure about a vehicle. It’s better to walk away and buy another day than to get a clunker you can’t sell.
Limit yourself before the bidding starts and stick to it.
Paul Duchene writes for Car and Driver, “Set your top price and don’t go above it. You need all your wits about you and not an ounce of pride to cloud your judgment.
Cars will be shown in a set order.
Arrive early and figure out when your favorite will be on the block. You can usually get a copy of the showing list when you check in. If you arrive late, you may not have a chance to inspect the car you’re interested in buying at the auction.
Remember to budget for shipping if necessary.
Leave room in your budget for shipping if you are buying out of state or far from home. The last thing you need is a cross-country trip in an unproven vehicle and a breakdown somewhere remote and expensive.