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How to Buy Cars at an Auction

Tips for Successful Online Car Auction Bidding - AboutBoulder.com

Buying a car can be an expensive endeavor. New vehicles lose a significant portion of value the moment they are driven off the dealership lot. Used cars offer more flexibility in price, but lack warranties and can have hidden issues. For the shrewd consumer looking to get good value on a quality used car, attending and bidding at auto auctions provides another alternative with its own unique set of benefits and considerations.

Buying a Car at an Auction – Things to Consider

Here are a few things one must keep in mind while bidding on a car at an auction!

1. Research Auction Options

The auto auction industry spans a range of event styles and consumer access. Broadly, auctions fall into:

  • Dealer-Only Auctions: Restricted to licensed auto dealers and the general public cannot bid. High volume of inventory but less selection compared to public auctions.
  • Public Auctions: Open for anyone to attend and bid. Requires an auction membership or buyer’s fee to participate. More diverse selection of vehicle types, conditions, and values.
  • Online-Only Auctions: Virtual auction events hosted over the internet. Convenient but cannot physically inspect vehicles before bidding. Risk of hidden issues.
  • Live Auctions with Online Bidding: Hybrid model where vehicles are housed at a physical location but bids are placed electronically in real-time both on-site and online. Combines physical inspection with reach of internet bidders.

When first attending auctions, smaller regional public auctions are likely the best starting point. They attract an assortment of vehicles sold by private individuals, dealers, leasing companies, banks, and government agencies. The smaller audience allows time to learn without getting caught in bidding wars.

2. Inspect Vehicles Thoroughly

The cardinal rule when buying vehicles sight-unseen is caveat emptor – let the buyer beware. Auction houses provide limited information and no guarantees about the cars for sale. Some will have car history reports available for review, but bidders need to verify vehicle records independently through resources like Carfax.

Visual vehicle inspection should cover all mechanical, electronic, and cosmetic issues. Look for leaks, rust, paint flaws, tire wear, brake pad thickness, irregular tire wear patterns, and examine all functions including lighting, electronics, HVAC system, and more. Mileage and condition should align logically. Bring a socket set, flashlight, and OBD scanner if allowed. Test drives are rarely an option but running the engine is standard.

These are all reasons why it’s so difficult to value a vehicle without an inspection. Even if you needed to refinance a vehicle or get a no inspection auto title loan, these options are always challenging if you don’t let your lender inspect the vehicle!

Equally important is verifying all vehicle documentation like ownership title, accident history, flood damage, odometer accuracy, lemon law status, and service records. AutoCheck and NMVTIS reporting provide additional information. Without proper due diligence, unpleasant and costly surprises can occur after purchase.

3. Understand the Auction Process

While specifics vary across auctions, standard protocols create an orderly bidding process:

  • Vehicle Display: Cars available for auction are parked in assigned rows at the facility. Attendees have a multi-hour window to inspect before bidding begins.
  • Block Bidding: The auctioneer groups vehicles into blocks of 5-10 scheduled back-to-back. Listen and watch carefully to know which vehicle is up for bid within the block.
  • Reserve Prices: Consigners can establish a minimum selling price unpublished to bidders. If reserves aren’t met, vehicles are “passed” unsold.
  • Fast-Paced Bidding: Auctioneers use rapid-fire chanting to prompt bids, usually seeking increases in set increments. Pay close attention, as bids can escalate quickly.
  • Winning and Payment: The highest bidder wins the right to purchase the vehicle for the final bid price, although auction fees are also added on. Arrange financing beforehand, as payment is usually required within 1-2 business days.
4. Set a Budget

When entering those adrenaline-fueled bidding wars at car auctions, seasoned participants know to armor themselves with ironclad budgets. Without clear limits spelled out ahead of time, even veterans risk getting caught up in the heat of battle and overpaying wildly.

Be real – factor in all those tacked-on fees and potential mechanical rehabs down the line. Plant your flag on a sensible ceiling price and refuse to breach that line, no matter the provocations.

5. Bid Strategically

Navigating auctions’ fluid tempo demands blending vigilance with restraint. Wise bidders open cautiously, testing the waters on lower-priority rides before taking the plunge on prize models. Watch to see what others bid, then strike decisively when the time is right.

Rash spur-of-the-moment leaps rarely end well, whereas incremental escalations tend to serve. And should prices spiral beyond reason, summon the strength to disengage rather than chase sunk costs. Knowing when to pass on an auction isn’t a weakness – it’s the hallmark of any vehicle auction participant who live to fight another day.

Conclusion

Play it right, and auctions can unlock great deals – enabling ordinary folks to land extraordinary wheels at prices once deemed impossible. But dream outcomes hinge on conscientious prep, strategic bidding, and never losing perspective, no matter how thrilling the ride. Stray past financial guardrails, and even seasoned players risk major turmoil. So, set your boundaries and stick to them.

John Mali Director of Media Relations

Director of Media Relations at AboutBoulder.com

john@aboutboulder.com

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