When trying to get a good deal on a car, shopping at an auction can be a tempting option. It is becoming more commonplace and has the potential to pay off for an astute shopper. On the other hand, buying a car at auction also embodies the warning of “buyer beware" and “sold as is". If you're up for a high risk/high reward situation, start preparing early.
Car Auction Preparation
Auctions create high intensity situations where you will need all your wits about you in order to get the deal you want. There are two areas that are especially important: the vehicle you have in mind, and the amount you are willing to pay. There is a lot you can't control at an auction, but you can control what you know and want.
You should have an idea of the car or truck you want to buy, and know how much that vehicle sells for at a dealer and in a private sale. Knowing this will allow you to determine how much you think that vehicle is worth and how much you would be willing to pay for it.
The other critical constraint is your budget. If you see the car you want and the bidding gets exciting, it is hard to resist the impulse to chase after it. Know your limits and stick to them! This will save you money and ensure you get the deal you were after.
The terminology used in auctions is a little confusing. Public auctions are usually auctions that anyone can attend and participate in, as opposed to dealership auctions where only a licensed car dealer can bid and buy a car.
Sometimes people will say “public auction" and mean a sheriff's sale or auction through the federal government. Vehicles at these auctions can be surplus, used, or confiscated during law enforcement activities.
A public auction can also refer to the auction of “public" cars, meaning cars having nothing to do with government property. Cars in this category can be anything from bank repossessions to dealerships shedding cars they can't sell. The range of quality and price will vary greatly.
Car Auction Tips
There is a lot to look for the day of the auction. You will need to fully inspect the car and be able to diagnose its mechanical health, in most cases without being able to take the car or truck for a test drive. If you are not equipped to perform a thorough exam of the vehicle, take a good mechanic along with you.
There will be bottom-of-the-barrel cars at auction—cars totaled or flooded—and all of them spruced up to look in good shape. Don't forget they're all being sold as is. There is no recourse for you to get your money back if the car or truck you buy has severe mechanical problems.
You should also consider purchasing a vehicle history report for any vehicle on which you plan to bid. This step helps you know whether the car was in any accidents that could impact its condition.
Are Auctions Right for You?
Auctions aren't for everyone. There is a lot of competition from professionals who follow auctions closely and are in the business of buying cars at auction—not to mention the growing number of people simply trying to save money on a used car.
Try attending an auction without planning to buy anything. This will give you a sense of what the place and process is like. You can then determine whether you want to try saving money by buying a car or truck at an auction.