How To Buy A Car At Auction

March 27th 2017

The show floor of a car auction

How Car Auctions Work

1. Register for the Auction - To participate in an auction, you must register for it. You’ll be asked for your Australian driver’s license. If you’re buying on the behalf of another person, you’ll be asked for proof of authority. Also note that you must register with that person’s or company’s name when you’re bidding on behalf of a third party.

2. You Have to Pay in Full the Next Day - When you win a bid at an auto auction, you must pay a certain percentage that same day. The remainder needs to be paid on the next business day. This is part of why it’s important to never bid money that you don’t have readily available for purchasing the car.

3. Buyer’s Numbers Are Assigned - Another thing you need to know about how do auto auctions work is when someone registers for a car auction, they’re given a buyer’s number. You can only bid on cars for which you have a buyer’s number. Buyer’s numbers differ for each sale.

4. Each Vehicle is Given a Lot Number - Auto auctions organise vehicles by giving each a lot number and then auctioning them off in numerical order.

5. Auctioneers Keep Track of Those Who Bid - Once you place your initial bid, the auction team keeps an eye on you to ensure they don’t miss you. Make your initial bid in an auction obvious to ensure you’re not skipped. Usually, lifting your hand is an obvious enough signal.

6. Raises Are Usually $200 - In an auto auction raises are usually $200. However, some auctioneers nominate either lower or higher raises.

7. Bids Cannot Be Withdrawn - One of the most important things to know about how do auto auctions work is bids cannot be withdrawn. You should never bid money you’re not able to part with immediately.

8. Bids Are Sometimes Referred - Occasionally, you’ll hear the auctioneer say a bid was referred. This means they must receive confirmation from the vendor to accept the bid.

9. Some Automobiles Have a Reserve Price - In contrast to an unreserved price, in which the car goes to the highest bidder, automobiles with a reserve price can’t be sold unless the bid reaches a certain price. Most auction houses don’t accept a reserve price that’s unreasonable, so it’s usually not something you have to worry about.

10. An Auction House Has Conditions of Sale - Auctions houses have conditions of sale that outline important information of buying a car, such as extra fees and taxes. You must always read the conditions of sale before bidding, so that you know what the full cost of the vehicle really is.

An almost-full car park

How To Get Into Car Auctions

1. Search for Public Auctions - Most auto auctions are closed to the public. They are for dealers only. To shorten your research time, enter this search string in search engines “your area or city + public + auto auction”. You’ll find more relevant search results.

2. Set a Cap for How Much You’ll Willing to Spend - A common mistake that beginners make in car auctions is not establishing a limit on how much they’re willing to spend. Emotions are high during the actual auction, which can lead to overspending when you don’t have a self-imposed limit in place.

3. Look at the Inventory Listing Before Going - Rather than attend an auction and browse the cars, you should check the inventory listing before auction day. Pick a few vehicles that you’re interested in buying. If it costs more than the highest amount you’re willing to spend at the auction, cross it off your list no matter how tempting it is to make an exception.

4. Attend the Pre-Viewing - Not all car auctions offer pre-viewing, but if an auction you plan on attending does, you should attend it. At the pre-viewing, you should check the cars you’re interested in for fluid leaks and other warning signs of a problem. Repair costs should always be taken into consideration in the car’s price.

5. Check the Car’s Value in Your Country - Another important step in researching cars for sale by auction is to check their current value in Australia or the country you live in. It’ll give you an idea on where your cap should be for bidding on the vehicle. Only check the prices of the cars you’re interested in buying to save on research time.

6. Read Auto Forums on the Models You Want to Buy - A particular car may look nice, but there might be a lot of customer complaints about the model. You should be aware of what the possible problems are with the vehicle, so always check auto forums on the models you’re interested in buying.

7. Attend an Auto Auction without Bidding - If you’ve never been to a car auction before, it’s recommended you attend one or two auto auctions without bidding. This will show you what the environment is like and what to expect. You’ll also feel less nervous when you bid because it won’t be an entirely new experience.

8. Observe the Crowd While Waiting for the Vehicles You Want - While waiting for bidding to open on the cars you’re interested in buying, observe the general mood of the crowd. Note who the frugal buyers are and who doesn’t seem concerned about how much they spend. It will help you bid more strategically.

9. Buy an Inspection at the Auction House If Possible - Some auto auctions offer buyer protection plans in which they inspect the car. If the car has a problem after you’ve won it, you can either renegotiate a lower price with the seller or return it under a buyer protection plan. Without this protection, you’re stuck with what you get.

10. Obtain a Motor Vehicle Dealer License If You Want in on Dealer Auctions - Many cars for sale by auction are only open to dealers. You can obtain a motor vehicle license for admittance in dealer only auctions. To obtain a motor vehicle dealer license in Australia, you must apply through Fair Trading and pay a fee. The cost depends on which specific dealer license you want, it ranges from $180 to over $1700.

Two full rows of cars

Where To Buy Auction Cars

1. Large Auction Houses - One of the best places to buy auction cars is large auction houses because they host auctions on a weekly basis. There is also a large variety of vehicles to choose from. Pickles and Manheim auctions are two of the largest car auction houses in Australia.

2. Small Auction Houses - Small auction houses tend to specialise in a specific area, such as classic cars or vintage cars. They are great to go to when you have a specific type of vehicle you want to buy.

3. Online Auction House - If you don’t like the thought of attending an auction and raising your hand to bid, then you’ll probably like online auctions. Even if you don’t mind the in-person experience, it’s worth checking an online auction for a good find, especially when you have a particular model in mind.

4. Repossessed Vehicle Auctions - Another place you can buy a car via auction is repossessed vehicle auctions. Auto finance companies that auction repossessed vehicles are usually trying to recoup the interest they are owed. At this type of auction, you need to be more alert for potential problems or damage to the car because some owners intentionally damage the car before it’s repossessed.

5. Newspapers - Many auctions you may not find through an online search have ads in the newspapers. The Brisbane Courier is a good newspaper for finding car auctions.

6. Government Vehicle Auctions - Government vehicles typically have low mileage and come from exed government leases. They are sourced from all levels of government: federal, state, and city councils. Specialised government vehicles like ambulances and emergency service vehicles are sometimes found at these auctions too.

7. Ex-Lease Vehicle Auctions - Cars at ex-lease vehicle auctions tend to be well-maintained because they are largely sourced from corporates that leased cars from vehicle manufacturers or finance companies. The time of sale usually coincides with the warranty’s expiration or the lease’s termination.

8. Commercial and 4 Wheel Drive Auctions - If you’re looking for a 4 wheel drive vehicle, then you’ll want to attend this type of auction. Government departments, mining companies, and other similar organisations often auction their used vehicles at this type of auction. Conditions of the automobiles vary widely, but many of the vendors have used them for off road work.

9. Salvage Car Auctions - Cars auctioned at salvage car auctions have either been written off by insurance companies or damaged by thieves. The cars may have been damaged by hail or other weather conditions. You will know if a car has been written off because auctioneers are required to disclose that information.

10. Dealer Auctions - Some auctions are classified as dealer auctions, which means it’s only open to dealers. Ordinary people, however, can still participate in a dealer auction if they acquire a dealer license. You don’t need to get into the business of selling cars to obtain a dealer license or participate in a dealer auction.

A red car parked next to a blue car

Buying A Car From The Auction

1. Double Check Your Details Are Correct When Registering - Receiving cars bought at an auction can be slowed down when there’s a typo in your registration information. Always double check your details are correct after registering.

2. Inspect Cars Before the Bidding Begins - You should always inspect cars you plan on bidding on before the auction begins. Many auction houses offer pre-inspections. If you’re not familiar with troubleshooting cars, then bring someone along with you who’s knowledgeable about automobiles to help you with inspection.

3. There Will Be More Opportunities in Common Vehicles - If you lose the bid for a car you really wanted that’s a common vehicle, then you can always try again next week. Common fleet cars are frequently auctioned. You won’t have trouble finding another auction with that model.

4. Understand Your Rights - Before you buy a used car at an auction, you should look up federal, state, and city council laws on car auctions to ensure your rights are protected. You’ll want to catch it if anything illegal occurs, although it’s unlikely. Most auction experiences run smoothly, but you should still be prepared to minimise stress in the event something goes wrong.

5. Auctioneers Are Required to Have a Chattel Auctioneer License - You should check if the auctioneer has a chattel auctioneer license before buying a car from the auction. This can be easily checked on a government website, such as Queensland Government.

6. Make Sure the Auctioneer Announces Their Name - By law, auctioneers in Australia are required to display their name at the auction site. If it’s impractical for them to display their name, then they are required to introduce themselves before beginning the auction.

7. A Buyer’s Premium Should Be Announced If It Exists - Most state governments in Australia also require that auctioneers announce the buyer’s premium before starting the auction. Online auctions must display the buyer’s premium on their website in a noticeable spot. The buyer’s premium is a fee that some auctions charge on cars bought. Not all places charge this fee.

8. Weathered Paint and Dents Usually Aren’t Bad Signs at Government Auctions - It’s usually fairly safe to buy a used car from a government auction. Signs like weathered paint and dents aren’t usually warning flags at a government auction. For public auctions, however, you should be more cautious when you buy a used car that has scratches, dents, or weathered paint.

9. Test Drives Usually Aren’t Allowed - Most auction houses don’t allow anyone to take the vehicle for a test drive. You must rely on looking at the car and popping the hood to check things like the oil. Auction houses typically allow you to start the car to make sure it turns on, but that’s as far as you can go.

10. You Need to Obtain a Certificate of Roadworthiness - When you buy a car from an auction that’s registered, state governments usually require you to obtain a Certificate of Roadworthiness. In Victoria, for example, you are required to submit a Certificate of Roadworthiness within 14 days of purchasing a vehicle from an auction.

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