The likelihood that a vehicle you may have already purchased in your lifetime originated from an auto action is high. Almost 10 million vehicles are purchased every year at car auctions – mostly dealer auctions, but many are open to the public. It is a huge industry. The volume alone is incredible and the format is probably the rawest form of capitalism one could hope for. The opportunity to find a great automobile at a fairly low price is quite a draw.
There are incredible bargains to be had at auto auctions, but there are also some important things to be aware of. Everything is not as it seems from the buyer perspective.
From an old Yugo going on another round of TLC to expensive luxury vehicles almost anything is available. For many this is pure joy, for others it may very well spell disaster.
Average car buyers must use caution when entering into these venues. Much is smoke and mirrors to be kind. The beautiful SUV with a price that seems reasonable could be a time bomb- fuel injection issues, maybe transmission slippage, even some sort of electrical problem. Would you know?
In the world of auto detailing and band-aid repairs almost anything can be covered up temporarily. Long enough for you to take possession and be on the hook for fixing it or trying to sell it to the next victim. Looks pretty grim huh?
It is probably best to deal with a reputable dealer rather than put yourself and your money at risk. That said, if you still want to experience the excitement of a car auction keep these things in mind.
• Are you knowledgeable enough about cars to jump in? It may seem harmless enough but there are hundreds of makes and models. There are quirks and unique issues with many of them. Factor in that there might be repairs that are being hidden to fool you into paying more than the vehicle is worth in great condition.
Be sure you or someone you trust is mechanically inclined and a fairly good sleuth when looking over merchandise at a car auction. It could save you thousands down the road.
• Try to get to know the sellers. Find out their reputation, maybe call some references, check out the Social Media entries about them. If they are ripping people off there will undoubtedly be someone who has posted a gripe or twenty!
There will be banks and loan companies in this business too. These type of sellers are happy to sell at a price that helps them reduce losses on bad loans. You will want to check these out first, generally it is the best inventory and probably the least tainted.
New car dealers would be the next line of seller to consider. Most of these guys keep good trades to sell but not always. A specific make, say a Honda dealer would probably not want to figure out the repairs or preparation on a Fiat or a Volvo. this is where they may feel it is better to sell at an auto auction.
The independent car dealers sell used cars, pre-owned as they sometimes say. When they can’t sell a vehicle or the price they need in a retail transaction is too high to make it worthwhile, they will use car auctions to cut bait.
The issue here is they already tried selling the car to the public, maybe even tried selling it to another dealer or a wholesaler, now, as a last resort they want you to buy it.
• Always do some research first. Seriously, subscribe to an online service Carfax, Edmunds or similar. This provides you with some third party data about the car. History reports are available- this gives you some insight as to what has been done, how often and often by whom.
You can even see how many time the car has been sold, was it a dealer maintained vehicle or just a lemon waiting to squeeze you.
• Learn about the auto auction itself. You will need to register and place a small deposit when you get there. You should find out about the fees- sometimes these are sort of hidden, not the thing you want to find out after you buy.
Always drive the car if possible. I know maybe you’re buying a pile of Model T, but anything else give it a spin just like any other car you would buy. There are specific times and places to examine and test drive at the car auction.
• Who owned it? A little old lady? Probably not. But you can play Sherlock and look them over really well. What are the stations on the radio? Hip-Hop or Classical. Seat covers? Devil emblems or Hello Kitty? You get the idea. The past owner tells you a lot about the lifestyle that wore it out before you.
• The signaling system is something to figure out for sure.
The “Red” light is an “as is” deal. You buy it it’s yours with all the baggage. Unless there was some damage that was from undisclosed floods, fires, etc. Maybe even a tampered odometer, but general mechanical, yes, even severe, is your hot potato.
The “Yellow” light is a care that will have information disclosed at bidding time by the seller. This is to disclose all of the problems so that a buyer can assess whether they are up for the challenge of bringing it up to par.
The “Green” light allows inspections. You get a chance to go over the rig for an hour or two after the deal to be sure it is what it appears to be. this is when that expert mechanic friend along is nice. You don’t get to pick cream puffs only, but there is some room for dispute if it is “off” and the auto auction officials agree with you.
The “Blue” light has to do with a situation “title attached”. This often means the title isn’t there and the car auction has 30 days to get it to you or the deal can be called off. You get your money back, no problem.
Always best to pay by check- this assures you have some basic recourse and a record of the transaction nailed down better.
• Best to think like a pro. Look at the cars as commodities, not puppies in need of a home. Always keep in mind that the auctioneer is there to assist the seller. They make there bread when you buy.
The car auctioneer is trying to get the prices up. Everyone else want the prices low. You can begin to understand the nature of this animal. Beware of getting emotionally involved.
• You always can walk away. Most deals are good ones to be fair. If you get a pile of crap you can address the car auction officials and depending on the situation you will likely get an opportunity to back out if the vehicle was misrepresented in some way.
Always a good idea to be nice and professional with everyone concerned. Getting all frantic and demanding never gets you too far, there are a lot of personalities at the auto auctions. Be a good one.
Nobody want to get taken at a car auction. The tempo of an auction may change when there are folks from the public participating, but not always. Try to be a good car auction citizen and you will get respect and likely escape with a great deal or with your money.
Most of all have fun! Good Luck!