What to know about buying a car at auction

Buying a car is a major decision for most of us. It’s one of those expenses that can dominate a large part of our lives, as we find ways to pay for it. However, before we consider what happens after we buy a car, we should consider all the aspects that come before. One way people purchase cars is through auctions. Let’s consider what this means and how it affects the way we purchase.

What is an auction?

Auctions are places where cars are sold off to the highest bidder. Prices are not set – instead people bid on a price and, if there is no competition, that’s the price the car goes for. The main reason people go to auctions are the deals it’s possible to get.

As Car Buyer notes:

“people buy cars at auction because they tend to be relatively cheap there. If the auction house is quiet and there aren’t many bidders, you could find yourself buying a car for significantly less than you’d pay a dealer, or even a private seller.”

Not all auctions are public, some are only available to people who have dealer licences. However, public auctions are open to anyone. For many the question is: “are auction cars good?”

That’s a complicated question.

Auction cars require a trained eye

Many cars brought to auction are there because they’re second-hand and require repairs. As with buying any second-hand car, it’s better for people to have a trained mechanic’s eye to know what to look for.

Auctions differ

Every auction has its own rules. Some allow people to view the cars beforehand and test-drive them – others do not. We should know what this means beforehand.

Auction car types

In many auctions, the kinds of cars available tend to be fleet vehicles sold in bulk, usually by fleet leasing firms. This means we shouldn’t expect beautiful sports cars, but functional, frequently used vehicles designed for constant or long-distance travel.

Some risks

As with all forms of second-hand purchasing, there are risks. As Clark.com noted: “because auctions are generally the last time a car gets sold on the open market prior to going to the junk-yard, the risks of purchasing there are huge.”

These are just some considerations when it comes to car auctions. We must make sure we’re being frugal not foolish.