How To: Buy a Car at an Auction
Car auctions have been gaining in popularity the past several years. If you have some cash and a little time and patience, you can score a great deal. But, you will want to familiar with the basics of auctions before you get started.
Finding the Right Auction
Not all auctions are alike. So, the first thing you need to do is find the right kind for you. For example, some auctions only sell to people with a dealer’s license, while some are open to the public. Some auctions sell cars that have been inspected and certified; others do not. A quick search on the internet at sites like www.auctioncarused.com will help you locate the best auctions for you.
At most public used car auctions, the cars are all sold as-is. There are no guarantees or warranties. For this reason, you must get there early enough to check the car out yourself. Unless you are somewhat of an expert yourself, it’s a great idea to take along someone who knows about cars. (Some people actually hire a mechanic for a couple of hours to help them evaluate the available vehicles.) You may be surprised to find that small car auctions are not like the big auction houses you see on television. Things go pretty fast, and if you don’t understand what is going on, you might not get what you want.
The most important thing to know about buying a car or truck at an auction is that all bids are final. If your highest bid on a car is accepted by the seller, you must pay for the car. Most auctions ask for a deposit of at least five hundred dollars. If you decide that you don’t want the car, the auction will keep your deposit. The way auctions work is that the seller sells the car to the auction, which then transfers the car to you. If you decide not to pay, the auction still must pay the seller. You can be sued for the full amount of the vehicle. That is why it is so important to know what you are doing.
Also, you will need proof of I.D at the auction. You will not be able to buy any vehicle without a license or passport.
Car Auction Tips
1. Every public auction has an inspection period that offers you a period of time to view the vehicles and maybe even start them (you will not be able to test drive them). Be sure to attend the inspection period and to note down the vehicle identification number of any car you are interested in.
2. Ask about the history of any cars you’re interested in and see if it’s possible to run a background check. Most car auctions now offer buyers the chance to run a check and often have stands set up for this purpose. If the auction doesn’t offer this service, you are well-advised to track down the car's vehicle history report on Carfax. This will tell you the car's ownership and service history, and also alert you to previous accidents or problems that the car has experienced in the past. Of course, it will also assure you whether the car has a clean title. But using Carfax to obtain the vehicle history report will require you to pay a fee to use the service.
3. Don’t forget that your bid is not the final amount of money you will pay to get a car at an auction. You must take into account the registration fee you will pay to join the auction as well as what is referred to as a “buyer's premium”, which is a specific amount of money that goes back to the auction house for its services and can range from a set price to a percentage of your bid. (5% to 10% are customary) So, Check the Premium added to the price of the car. The premium can turn a great deal into a so-so deal and you’ll want to know what you’re committing to before you go to pay.
4. Bring a copy of the Kelly Blue Book, NADA or some other type of vehicle value guide with you. You’ll want to know the fair market value of the car to make sure you get a good deal. (You can also use the website at kbb.com.) You’ll find this very helpful when determining your bid. Once you know which vehicle you want, you will need to get registered with the auction. They will give you a number that you will hold up to bid with.
5. Bid what you feel comfortable bidding. Keep in mind your own budget and only bid what you can afford to spend because if you win, you will need to pay the full amount that you bid for the car that same day.
6. Finally, you might also consider adding an extended warranty. Since most vehicles sold at auction are sold "as is" it will be difficult, if not impossible to get any sort of recompense if you should have problems with your purchase. It is not possible for you to simply return the car or get your money back. There are no guarantees offered for the vehicles sold at public car auctions.
Good luck. Happy bidding at the car auction and don’t forget to give us a call at Auto Service Protection for the protection you need to sit back and enjoy your new ride.
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