Purchasing a car at auction can be an exhilarating and cost-effective way to acquire a vehicle. However, it also involves a unique set of considerations and potential pitfalls that buyers should be aware of. Here’s a comprehensive guide to help you navigate the process of buying a car at auction and make an informed decision.
1. Research and Preparation: Before attending an auction, do thorough research on the type of car you’re interested in. Set a budget and stick to it. Research the market value of the vehicles you’re considering to avoid overpaying.
2. Choose the Right Auction: There are different types of auctions, including government auctions, dealer auctions, and online auctions. Choose the one that aligns with your preferences and needs.
3. Inspect the Vehicle: Inspection is crucial. Many vehicle auctions allow you to inspect the vehicles before the bidding starts. Check the exterior, interior, engine, and undercarriage for any signs of damage or issues.
4. Understand the Auction Terms: Each auction has its own terms and conditions. Understand the auction fees, buyer’s premiums, and payment methods. Some auctions require a deposit up front or registration membership.
5. Set a Bidding Limit: Stick to your budget by setting a maximum bid limit. Bidding can get competitive, and it’s easy to get carried away.
6. Attend the Auction Early: Arrive early to familiarize yourself with the auction process. Pay attention to how bidding works and observe the dynamics.
7. Ask Questions: If you have any doubts about a vehicle, don’t hesitate to ask auction staff. They can provide information about the vehicle’s history and condition. Some vehicles can skip through second time through auction sites too. Vehicles may have previous faults and hidden issues when sold at auction.
8. Consider Online Auctions: Online auctions offer convenience, allowing you to bid from the comfort of your home. However, you might not have the opportunity to physically inspect the vehicle. When buy now auction is arrange your normal consumer rights are active if sellers is trade seller excludes private sellers.
9. Vehicle History: If possible, obtain a vehicle history report before the auction. This can provide insights into the vehicle’s past, including accidents and title issues.
10. Be Patient: If you don’t win the bid on your desired vehicle, don’t be discouraged. There will be other opportunities.
11. Have a Plan for Winning: If you win the bid, be prepared to make a payment and complete the necessary paperwork promptly. Some auctions require immediate payment.
12. Buyer Beware: Keep in mind that vehicles sold at auction are typically sold “as is.” This means you might not have any recourse if you discover issues after the purchase.
It’s a common misconception that car auctions are exclusively for dealers and professional fleet buyers. While dealerships frequently send agents or staff to acquire cars for their showrooms, many auction houses warmly welcome private buyers searching for a single vehicle.
Before you attend, ensure that you’re heading to a private buyer auction, as some events are exclusively for car dealers.
How to Participate in a Car Auction:
Exploring the Auction Venue: When you arrive at the auction venue, take the time to inspect the vehicles up for sale on that day. You’ll find a detailed catalog prepared by the auction house, typically available online in the days leading up to the auction and on the auction day itself.
Auction Process: As the auction kicks off, the cars are paraded through the sales room in the order they appear in the catalog. The auctioneer establishes a starting price and invites bids.
Bidding Dynamics: Assuming someone places a bid, other participants raise the price under the auctioneer’s guidance until there are no more bids. When the bidding concludes, the auctioneer seals the deal by striking the hammer (referred to as the ‘hammer price’).
Variety of Cars Sold at Auction:
Cars of various kinds find their way to auctions, including nearly new, old, vintage, and high-mileage vehicles. The majority of cars often come from dealership chains or rental companies looking to clear some of their aging inventory, typically being up to three years old with reasonable mileage.
Some dealerships also use auctions to sell high-mileage cars or niche models they’ve received as part-exchange deals, which they don’t find worth selling themselves.
It’s crucial to note that cars repossessed by finance companies or those classified as Category N write-offs (repairable with no structural damage, according to insurers) can appear at auctions. Therefore, it’s essential to fully understand the car’s condition before bidding.
What to Do at an Auction:
Preparation: Register your interest with the auction company online to access lists of cars you’re interested in. Arrive early on the sale day to inspect your chosen vehicles thoroughly, as test drives are usually not possible. Consider bringing someone mechanically-minded if you’re not well-versed in car inspections.
Examination: Check the bodywork and interior for signs of wear or damage. Listen for unusual engine noises and observe exhaust smoke’s color and volume during the inspection period, typically lasting two hours before the sale begins.
Participation: If you’re serious about a purchase, ensure the auctioneer can see you clearly. Raise your hand to participate, and the auctioneer will continue to engage with you during the bidding. A shake of the head signifies that you’re ‘out.’
Budgeting: Set a budget for your purchases and stick to it. Auctions can be exhilarating, and it’s easy to overspend in the heat of the moment.
Payment: If you successfully secure a car, you’ll be asked to pay for it at the end of the auction. Different auction houses have varying rules, but you’ll often need to provide a deposit of 10% or £500 (whichever is greater). Afterward, you typically have 24 hours to settle the remaining balance, along with buyer’s charges.
Buyer’s Fee: Keep in mind that a buyer’s fee, of the hammer price, is payable to the auction house for facilitating your purchase. Additionally, VAT is applied to this service. Check fee at auction.
Age Requirement: Most auction houses require buyers to be at least 17 years old, although children are allowed in the buying area when accompanied by an adult.
Taking Possession: After full payment, you’ll generally have two or three days to collect the vehicle, depending on the auction house. Be sure the car has a valid MOT, road tax, and insurance before hitting the road.
Preparation Before Attending an Auction:
Before attending an auction where you might make a purchase:
Learn from Observing: Attend a few auctions as an observer to understand how other buyers act and the overall process. See general pitfalls.
Research: Study your chosen lots in advance to gauge their value and worth. Review the auction house’s insights on specific models you’re interested in, available in their sale catalog.
Enjoy the Experience: Relax and embrace the excitement of the auction. With proper research and a bit of luck during bidding, you could drive away with your dream car at a bargain price.”
Remember, a well-informed buyer is likely to make the best decisions at an auction.
Cons When Purchasing a Car at Auction:
- No Pre-Purchase Test Drive:
- Unable to experience the car’s performance firsthand.
- Limited Mechanical Inspection:
- Lack of opportunity for a thorough mechanical assessment.
- Limited Warranty (Unless Still Under New Car Warranty):
- Typically sold ‘as-is,’ without warranty coverage.
- ‘As-Is’ Condition:
- Cars sold without cosmetic repairs or detailing.
- No Cooling-Off Period:
- Winning the auction means immediate ownership.
- Potential Legal Issues:
- The car might not be legally drivable (e.g., missing an MOT).
- Limited Guidance and Support:
- Lack of assistance throughout the sales process, both pre and post-purchase.
Decoding Auction Lingo
- Catalogue: This is your guidebook, showcasing each available car. It contains vital information about the vehicle’s age, mileage, condition, and, of course, the all-important lot number.
- Entry Form: The report that sellers complete with comprehensive vehicle details before it earns a spot in the auction.
- The Hammer: When a lot’s bidding concludes, the auctioneer emphatically strikes the hammer, marking the ‘fall of the hammer.’
- Inspection Report: A detailed assessment of a car’s condition by auction experts, encompassing any visible damage.
- Lot Number: Every car on the auction block receives a unique identification number known as the ‘lot number.’
- Non-Runners: These are the cars that won’t start, plain and simple – ‘non-runners.’
- Open Auction: An auction event open to everyone, as opposed to exclusive gatherings that may extend invitations to specific individuals or organizations.
- Reserve Price: The mystery price set by the seller as the minimum bid requirement. Bidding must surpass this undisclosed figure for the car to be sold. If it falls short, the vehicle remains unsold.
- The Rostrum: The designated spot where the auctioneer stands and orchestrates the bidding process.
- VCAR: Cars that have undergone extensive repair work or have been classified as insurance write-offs bear the ‘VCAR’ marking, signifying their inclusion in the vehicle condition and alert register.
Buying a car at auction can be a rewarding experience if done right. It offers the thrill of competitive bidding and the potential to find a great deal. By conducting thorough research, inspecting vehicles, setting a budget, and understanding the auction process, you can increase your chances of successfully purchasing a car that meets your needs and expectations.