Buying a car at an auction — whether local or online — can save you some cash. But it can be risky and there's usually a tradeoff. Cars bought at auction don't come with the same guarantees as those bought through dealerships. So while you may save money in the purchase phase, you could end up spending more on repairs and maintenance if you don't do your research — and a thorough inspection — before bidding. If you're going the live auction route, make sure the auction you plan to attend allows inspections, is reputable and will give you the proper documentation needed to register your new vehicle. If you plan to bid in an online auction, the same holds true. Make sure it's a reputable site from which you can get all the proper documentation needed. Local auctions are plentiful, and their rules and procedures may vary by location. Online auctions are becoming more popular and are offered through auction houses as well as more mainstream sites such as eBay. Regardless of which type of auction you choose to attend, make sure you educate yourself beforehand on what to expect and you'll be far less likely to walk away with a lemon.
The rules are simple: bid, pay (if you win, of course) and take your new car home. But the steps you take in between each of those rules can make all the difference in the world.
Auction Types
There are three main categories of auctions: local auctions, dealer/wholesale auctions and collector car auctions. Some are public and some are closed, some require pre-registration while others don't, and each has its own type of rules and regulations. Before heading to any type of auction, find out what types of cars are sold, whether the auction is closed to the public and whether you need to register beforehand. Here's a quick rundown on each ...
Local Auctions: Most towns across the country have general auctions at which a wide variety of items are sold — including cars. These auctions are always open to the public and may offer a selection of cars. Before bidding on a car at a local auction, be sure to inspect it thoroughly (taking a mechanic with you is ideal). Once you win the bid, the car is yours — no matter the condition.
Dealer/Wholesale auctions: Dealers tend to go to auction for three reasons: their lot is too full of inventory, their inventory is aged or they have trade-in stock that doesn't match their inventory. Going to auction helps them make a quick profit on these cars and helps make room on their lot for other autos that have a quick turnover or a higher profit margin. These auctions are mainly open only to dealers and also include previously leased vehicles.
Collector Car Auctions: Always open to the public, collector car auctions are where you go to get your hands on unique cars from decades past, or from recent years, that are in collecting condition. Certain collector auctions are specialized in one type of vehicle — be it prewar, postwar or muscle cars. Choose the auction that suits your style and prepare yourself for an experience — collector auctions are high energy and very exciting.
