Car Auction InformationJanuary 30th 2019
Auto Auction Information
An auto auction is a method of selling used, and sometimes new vehicles. Like any other auction, the individual with the highest bid wins the vehicle. Auctions are gaining popularity every year in the developed world. Previously, many people shied away from motor auctions because they were restricted to licensed dealers only. These days, many countries approve auctions that are open to the public and Australia is no exception. Auctions are fast-becoming the preferred sale type in used car markets around the world.
The major factor holding people back these days is skepticism about the condition of the vehicle. Many are afraid of purchasing vehicles that are in a worse state than they anticipated. While this skepticism is not unfounded, a lot of people tend to overplay the occurrence of this situation. Those that have mastered the art of buying at an auction know that it is the best place to get great deals on car purchases. Many large established and trustworthy auction houses will give in-depth vehicle reports, some even better than your local mechanic provides. As long as you buy from a trusted company and do your due diligence, you can go home with a dream car at an unbelievable price.
The types of vehicles you see at auction
One of the beauties of buying at an auction is the variety. If you consider a large car auction centre, you’ll literally be spoilt for choice. There are different categories of cars, bikes, boats, caravans, motorhome, trailers and more that you can buy at discounted prices. Often, the auctioning company declares the state of the vehicle although they are not obliged to do so. Below are some categories of cars you can buy at an auction:
Off-lease: these are the class of vehicles that are returned to financial institutions when the lease term lapses. Usually, you would have some information on the mileage and maintenance history of off-lease vehicles.
Off-rental: rental companies take advantage of auctions to sell old models of cars when they acquire the newer models. This typically happens every year. Off-rental cars are the favourite of many people that buy from auctions. These cars are usually low on mileage and well-maintained. Moreover, they’ve only been driven for a year.
Fleet cars/company cars: various companies and public institutions own cars or trucks, and they may change their fleet from time to time. During such auctions, you’ll see large volumes of similar vehicles. The vehicles may be older than off-rental vehicles but they are usually adequately maintained. The mileage would also depend on the company and the type of vehicle.
Repossessed vehicles: financial institutions and dealers may repossess vehicles, especially if the buyer defaults on their payment plan or if the buyer has an undisclosed history of bad credit. Many of these vehicles are disposed of via auto auctions. ‘Repo’ vehicles usually sell for much less than their market value because the owners are more concerned about offsetting their loss than making a profit.
Salvage: these are the cars that have been involved in floods, fires, accidents, or similar scenarios. Usually they are purchased by insurance companies and passed on to dealers who will auction them. Sometimes the vehicles will be taken to auto mechanics for minor repairs before they are sent to auction.
Inspecting vehicles at an auction
For most auctions, you are allowed to inspect vehicles of interest. A few auctions allow test-driving as well as inspection, but you can expect the starting prices of bids at such auctions to be much higher. Most times, you simply have to trust the information provided by the auctioneers on the condition of the vehicle. You can also view information about maintenance history. Some companies you will need to ask in the office for access to the logbooks. Other times, you just buy your vehicle ‘As Is’. To be honest, this is the case with most auctions that are open to the public. That is why you need to attend and buy from an auction organised by a reputable company. You would at least be sure that there is a lower probability of getting a bad deal if the reputation of the company is at stake.
Bidding at an auction
If you are attending a live physical auction, everything is usually fast-paced and you should know what to expect before bidding. You will hardly have time to catch your breath, particularly if the auctioneer has many cars to sell. Thus, you should have a car in mind before the auction starts and you should have an idea of the condition and value of the car. The auctioneer opens bidding without announcing the reserve price. Registered participants are invited to bid and the individual with the highest bid wins. The auctioneer is obliged to sell as long as the highest bid is above the reserve price. Should the highest bid not meet reserve, the auction centre will contact the owner to option approval of the sale.
Once another participant outbids you, you shouldn’t increase your bid unreasonably, especially if the price is already higher than your valuation of the car. This is one reason why you shouldn’t be fixated on just one car. Have a standard specification in mind and be open to all options that meet your requirements.
An online auctions is about the easiest avenue to become a car owner without breaking the bank. The general process of online auctions is roughly the same as a physical auction. The main difference is that you get to do everything right from the convenience of your desk or mobile phone. As usual, you should start with thorough research of the auctioning company and available vehicles. Once you are sure the company is a reputable one, you should take a look at their inventory and see the cars that interest you. Check out the general appearance of the car if there’s a picture, although they generally always look good in the photos. Importantly, check the details of the vehicle, the mileage, vehicle report and notes, plus any maintenance records. Buying a car ‘As Is’ at an online auction is a huge risk; one you might be better off not taking, especially online.
Some online auction companies understand the fact that most of their customers have little to no experience about how an online auction works. These companies may provide auction specialists that would advise you so you can make informed decisions.
Car auctions are the easiest way for a motor dealer, business or private individual to sell the vehicle fast and hassle-free. As a buyer, it’s a platform for you to get a car that is worth much more at retail sale than what you’re paying for it. Whether it’s an online or physical auction, you need to understand how an auction works before choosing to participate in one. Many people see an auction as a hit or miss scenario and this view can hardly be faulted. However, you would greatly increase your chances of ‘winning’ if you do your market research. For the majority of motor dealers you’ll find at auctions weekly, as they know it’s the best place to get discount cars when you know what you’re looking for. Importantly, you should have your money with you before bidding at an auction. Most auctioneers do not offer any form of financing and you may lose your right to own the car if you do not make payment within a short time after winning the bid.