What Does No Reserve Mean at a Car Auction?February 22nd 2018
What does reserve mean in an auction?
When it comes to auctions, a reserve is the lowest price a seller will accept for their vehicle. Prior to the auction, the seller will confirm their reserve price with the auctioneer. This price will not be made public, although you may be advised that the “reserve is off,” or that the car is “selling,” once bidding exceeds the reserve. A car will only sell if the highest bid meets or exceeds the reserve price. If a reserve price is not reached during bidding, it remains at the seller’s digression whether to sell for the for the highest bid. For example; a seller might have a car with a reserve price of $5,000. If bidding finishes at $4,200, the seller will decide to accept the lower offer or not. Otherwise, once the bidding exceeds $5,000, the car will always be sold.
What does no reserve mean at a car auction?
Ever wondered what “no reserve” means in an auction, or how no reserve car auctions work? In this type of auction, the auctioneer will sell the car regardless of the price it reaches. There is no minimum amount required for the car, so it will sell for whatever price the auction determines. It is a risk, and you may be wondering why a seller would opt into a no reserve auction. It may be that the vehicle is from the estate of a deceased person, or that the seller simply has an urgent need for money. Whatever the reason, when bidding finishes, the vehicle will always be sold.
Strategies for Reserve Auction
When it comes to live auctions, setting and sticking to a budget is very important for reserve price auctions. Write down before the auction how much you’re willing to pay for a vehicle, and never allow yourself to bid over this amount. It can be tempting during an auction, when a reserve hasn’t been met, to bid more than you wanted, believing that the reserve must be only marginally over your budget. Try to avoid getting caught up in the moment, or you will likely overpay for the car. Once the bidding has finished, a seller can be asked to reduce the reserve, so just because your bid was too low, doesn’t mean you haven’t won the vehicle. You may be notified by the auction centre that the seller has agreed to sell the vehicle below reserve, but for another fixed price. It will be up to you (the buyer) whether to accept this price before leaving the auction centre.
Strategies for No Reserve Auctions
No reserve auctions give you the potential of purchasing cars at bargain prices. Because there are no minimum prices to meet, if not many buyers are bidding, you can walk out with a gem for the price of chips. A good no reserve auction, therefore, can really pay off when it comes to saving yourself big money. One tip is to think about the timing of your bid. It is a good strategy to bid late in the game, letting the other bidders drop out of the auction before swooping in with the winning bid. Bidding late is advantageous as this will hide your interest in a car. Bidders can often be spurred on by other people showing interest, which can quickly push up the price. Swooping in at the last minute can prevent this and help you do well in no reserve auctions. Just be sure to not get your bid in too late, or you might miss out entirely!
You may also be interested in reading our article on buying vehicles at auctions. Auto auctions are becoming increasingly popular in Australia, and you will have the greatest chance of finding the best deals by learning their ins and outs.