Throughout the United States, public car auctions allow potential buyers and dealers to purchase cars at wholesale prices. However, while purchasing an inexpensive car may seem tempting, some cars at auction are unsalable and could end up costing you more than they’re worth.
As long as you know what you’re doing, a car auction can absolutely be worth it. Since many people are unfamiliar with the process of buying a car at auction, here are some things to keep in mind in order to get the most bang for your buck.
Research is crucial
Before attending a car auction with the aim of buying a car, do some preliminary research. If you have a car in mind that you’d like to buy, find out how much that model went for at past auctions. Research can help you avoid overspending and give you an idea of what kind of budget to set before going to auction.
In addition, consider attending a car auction without the intention of buying anything. Since emotions typically run high during auctions, attending an initial car auction helps you learn the process, as well as what to expect while you’re actively bidding. It also prevents you from feeling overwhelmed the next time around.
Some cars are unsalable
Vehicles that were traded in, leased, repossessed, or totaled are often among the millions of vehicles purchased annually at car auctions. While this doesn’t mean that every car at auction is unsalable, it means that buyers should approach inexpensive cars with caution. Prospective buyers should thoroughly inspect vehicles prior to bidding in order to ensure that they won’t end up costing more than they’re worth.
It’s also important to remember that cars are typically buffed and polished before being sent to auction. A shiny car does not necessarily equate to a good car, so interested buyers should the car history and make sure VIN numbers on the dash, door, and other ID points match before placing a bid. Since VINs can help you determine whether the car required previous repairs, steer clear of auctions that do not permit buyers to check VINs.
It’s not uncommon for sellers to hide issues related to the car during an auction, so be sure to familiarize yourself with tricks that sellers can use to hide car trouble. Obvious signs of repair include over-sprayed paint, rough sheet metal, and scored brake disks. If you’re not car savvy, consider bringing a knowledgeable friend to the auction who can help point out flaws.
Since there are no guarantees or warranties at public car auctions, it’s crucial to know exactly what you’re buying before you take it home.
Payment is required on the spot
If you’re interested in buying a car at a public auction, you’ll need cash or a pre-approved loan when your bid wins. Although some car auctions may accept check or credit, most do not. So it’s necessary to find out the accepted forms of the payment beforehand.
If you’re paying with a pre-approved loan from a bank, be prepared to pay a deposit. Small businesses, partnerships, and sole traders looking to participate in car auctions can find a low-rate business car loan that does not charge GST on monthly loan repayments. If the loan is fully secured against the vehicle, no additional assets are required as security, making taking out a car loan easy and quick.
Buying a car at auction is a great way to score a good car at a low price. Even though some cars at auction are unsalable, entering the process with the right knowledge can help you navigate the buying process with ease.