Going To A Car Auction? These Tips Will Help You Out
You can get some really great vehicles at auction if you know what you're doing. Auctions are becoming increasingly popular, and many car enthusiasts find some good bargains at these events. While they're typically well-organized, it can be a little challenging to navigate the auction world if it's your first time.
Auctions are incredibly fast-paced, and you need to do your research in advance so that you're fully prepared and don't waste any money. We break down some of the complexities in the guide below. Keep reading to learn more.
They Can Be Downright Chaotic
There is a lot going on at car auctions. While they're a lot of fun, they are also a bit chaotic. People often run from one car to another as the auctioneer yells out different prices. It can be quite entertaining to watch; however, you may get so caught up with everything around you that you lose focus on the vehicle you want.
Some auctions are completely wild and have even featured people dressed in costumes as buyers are seriously inspecting cars to find the perfect one to take home.
Buyers And Sellers Are All Looking Out For Themselves
Vehicle auctions are a lot of fun, but not every person you meet is honest. When it comes down to it, car buyers are looking out for themselves. Those who are more experienced may take advantage of newbies and do whatever they can to get what they want at the best price.
If you don't have any experience, you also have to be cautious of sellers because they can be deceptive and will try to offload their cars at the highest price possible regardless of the vehicles' condition.
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It's Important To Set A Budget
If you're a first-time auction goer, it's crucial that you set a budget so that you don't lose all your money on a vehicle that may not be the best value. Before you attend the event, determine exactly how much money you can spend.
Evaluate your finances, and make sure you have enough for the vehicle as well as any added fees. It can be exciting to get caught up in a bidding war, but it can be detrimental if you shell out more money than you can afford. This can cause you a lot of problems down the road.
The Vehicle History Report Is Vital
When you're buying a used vehicle at auction, it's a good idea to get your hands on the vehicle history report. In addition to information about past accidents (if there are any), the paperwork will also provide many details about the car's history. You should know as much information as you can so there are no hidden issues.
Unfortunately, over 500,000 vehicles are sold each year with false odometer readings, according to government data. Also, many sellers try to offload vehicles with flood damage. You can avoid this problem by getting a vehicle history report.
You May Have to Pay A Deposit In Cash
If you're going to bid on a vehicle at auction, obviously you have to pay for the car if you win it. There's typically a time frame in which the money will be due. But you may not know that when a bid goes through you have to leave a deposit, which guarantees that the deal is sealed.
Often the deposit must be paid in cash. So, if you plan on attending an auction and buying a car, make sure you have some cash on hand in case you find something you want.
You May Need A Pre-Approved Loan
First-time auction goers don't always know that in order for a bid to be accepted they often need a pre-approved loan. This may require the assistance of a bank. A pre-approved loan is a good idea because it guarantees that you can transfer the payment to the seller.
It's worth noting that financing is allowed in certain situations. However, the lender will probably require comprehensive insurance. That's why it's really important to figure out all financial expectations before heading to an auction.
Transporting A Vehicle Is An Added Cost
When you're just starting out in the car auction business, you may not be aware of some hidden costs. This includes transportation, which can greatly affect the price of the vehicle. When you're making a budget for an auction vehicle, keep in mind that if you live out of state or in a different country, the shipping can be very expensive.
Many who are new to auctions might not even think about this factor. Experts recommend reaching out to transportation companies in advance to determine how much it would cost to transport a vehicle.
The Black Book Will Tell You Exactly What The Vehicle Is Worth
If you don't know what a black book is, then you have no business buying a vehicle at an auction. You want to do some research before spending money on any type of large purchase, such as a vehicle. That's why experienced buyers use a black book or do research on the internet to find information on the car.
A black book lets you know the wholesale/auction value of your car or the amount a dealer might pay for it. This will let you know how much it's worth so you don't waste any money. This ensures that you don't spend more than the vehicle is worth. It will also show you if there are any bargains on the lot.
Go Early To Avoid Crowds
Obviously, experienced buyers know more than entry-level auction goers. And one trick they have is attending very early in the morning. That allows them to compile information before other people even start coming in.
It's a great idea to inspect vehicles before the crowds roll in because you can spend time checking each car's history. Plus, it's much easier to focus on a vehicle when there are fewer people nearby. That's why a lot of bidders go to auctions as early as possible.
The Vehicle You Purchase Will Probably Need A Little Work
Don't assume that the vehicle you buy at auction will be in perfect working order. Unless it's a brand-new model, there's a good chance it could use at least a little TLC. While many auction vehicles are in decent condition, they may be quite old and have some wear-and-tear.
Regardless of the price you pay, there's a good chance something will need improvement. It's extremely rare to choose a vehicle that doesn't require any repairs at all. Expect to do some of the work yourself or find a good mechanic who can do it for you.
Falsely Bidding On A Vehicle Is A Dangerous Game
It's not a good idea to get caught up in false bidding. It can end up costing you a lot of money, and/or you may get kicked out of the auction. If a false bid ends up winning the vehicle, it means the seller will demand money for something a person didn't have any intention of buying.
Some auctions require money immediately, either in cash or through a secured loan, as we mentioned earlier. And depending on the country, false bidders can be fined and even prosecuted for the crime.
Things Happen Very Quickly
Have you ever watched a car auction on television? Then you've probably noticed how fast things occur. The action goes by very quickly. When people bring out a car for enthusiasts to bid on, the auctioneer immediately starts calling out numbers until the final bid is made.
There is no opportunity for buyers to think about the price. If you hesitate for just a second, you may lose the vehicle that you want. Before you know it, the next vehicle goes on the auction block. That's why you need to be 100-percent attentive.
Be Cautious Of Used Car Dealers With Huge Inventories
Most sellers are honest about their vehicles, but not everyone is. Some sellers, such as used car dealers, try to offload questionable vehicles with various problems. These dealers want to make money on these cars and bring them to auctions as a last resort.
Keep an eye out for dealers that bring a lot of vehicles to an auction. It's not a good sign, and it's a good idea to avoid that seller because what you see might not be what you get. While some vehicles might be okay, others may have serious mechanical problems that will cost a lot of money to repair.
Do Not Get Into A Bidding War
You've probably seen bidding wars take place on television where two people compete with one another to win a vehicle. They go back and forth as the price increases until finally one of them gives up. However, you need to avoid a bidding war at all costs when you go to an auction.
This can be challenging, particularly if you really want a specific car. But keep in mind that it can be a huge waste of money, and in the end, the seller is the one who wins.
Police Auctions Are Worth Attending
You can attend a variety of different auctions, including police auctions. They are a little bit different than regular auctions due to the kinds of vehicles you can buy. Buyers can bid on vehicles used by police that are nearing the end of their usefulness for the department.
In addition, you may come across some vehicles that authorities seized or impounded. You can find some really good deals at police auctions. Plus, since they're run by law enforcement, you're less likely to encounter vehicles that have been tampered with.
Vehicles Are Auctioned In A Set Order
Some people don't know that vehicles are shown in a specific order, and if you miss the one you're considering, it's too late to bid on it. Make sure you figure out when (and where) the car you want will be sold, so you are ready when it's time for the auction.
It's important that you are organized and keep track of the vehicle(s) you're following. Make sure to consult the list you receive when you check in to the auction. That way, you can plan ahead and make sure you're in the right place when the bidding starts.
Get To Know The Sellers
It's always a good idea to learn a little bit of information about the people who are offering the vehicles at an auction. While someone may appear trustworthy, that doesn't mean he or she actually is. Don't just read an advertisement and expect that the seller is honest and reliable.
Prior to attending the auction, call the office and ask who consigned vehicles for the upcoming event. Then check their backgrounds so you have a little idea about their reputation.
Understand The Facts Surrounding 'Blue Light' Deals
A "blue light" is when a vehicle's title hasn't arrived at the auction. This can present some problems and is something you should be cautious about. The good news is that when you complete a blue light deal the check won't be processed until the title arrives.
This means you're less likely to be involved in a risky business proposition. Be aware, however, that you won't be able to register the vehicle until the title arrives, and if that doesn't occur within 30 days of the purchase, you can return the vehicle and get a refund.
Be Wary Of Vehicles With A Red Light Title
When you attend an auction, you will likely encounter a color-coded system that alerts you to the condition of a particular vehicle. One with a green light title means it's mechanically in good shape and is likely a good deal. A vehicle with a yellow light title may have some small issues but is still cleared for sale.
Vehicles with a red light title are sold "as is," which some people see as a giant red flag. Make sure you're aware of the type of vehicle you're purchasing so you aren't met with any surprises.
You Can Walk Away If A Vehicle Is Misrepresented
The great thing about car auctions is that legally you have the court of last resort. This is important because you don't want to get ripped off when it comes to giving someone a large amount of money.
If a vehicle is misrepresented and isn't what it's advertised to be, then no one can force you to pay for it. For example, if a car has problems that were not initially made clear, you can walk away from the transaction, cancel the check, and make sure you're not stuck with a lemon.
