Auctions Buying Guide

You would have often heard others say 'ohh I got this car at the auction and I saved quite a bit', you may be wondering how that is done. In the USA cars are also sold at auctions, some of which are exclusive to Car Dealers only. Here I try to explain the different type of auctions and how you as a beginner can take advantage and save money.

 

Public Auctions - Public,Police,Govt and Insurance Auctions :- 

There are various kinds of public auctions - by private auctioneers(dealers), Govt, Police, Insurance and Bank auctions. These are open to the general public where people like  you and me can participate and bid. On a winning purchase , payment has to be paid upfront in cash and the car has to be removed within a 24-48 hrs. The Title is usually send to you in a few days.  The cars are police seizures, banks repos and insurance damage or accident cars. Some cars are also from govt surplus used cars. In most of these auctions you have to be a car person and know what you are getting. Vehicles at auction sell in "as is" condition. That means there are no guarantees, no warranties and no means of legal recourse. The only people who usually go to public auctions are those who are exceptional in their mechanical inclination and training. Basically if you can't fix a car, don't go to a public auction. If you look around hard and attend a few public auctions, there is a chance of getting a good deal. Sometimes some bank auctions happen online, where by you can go to the auctioneer, inspect a few cars and then later submit your offer online and wait to see if the bank accepted the offer. With the bank repo auctions you can may be find good cars within 5 years old and few miles usage. But for most as-is auctions the cars sell on visual inspection alone. This is where things can get tricky and high risk is involved. You can find out about public auctions in your area from local newspapers and classifieds. Insurance Auctions conducted by agencies like IAA(Insurance Auto Auctions) mostly sell accident cars. Most cars here will have a salvage tittle. If you have the appetite for it , this is also a good place to buy are-buildable car and fix it up either for personal use or for a re-sale.

 

Dealer Level Auctions:

This is another type of auction where dealers obtain their cars from. If you are in the market for a mid level luxury or premium car, and make an effort, you can have extremely good bargains. I have known of folks getting very good deals on cars 2-3 years old and with under 20-30K miles at these auctions. In these wholesale dealer auctions only people with dealers license can bid and purchase cars. The dealers usually buy cars from here and put it for sale on their lot for a huge profit. The cars that are offered for auction come from various sources like :

- Leasing companies.
- Rental companies,
- Financial service arms of car makers
- Dealer trade-ins and lease returns
.

Manheim Auctions is perhaps the best example here. They are located all over the USA.Now how to buy a car from here when you don't have a dealer's license ?. The good news for you is that there will be several local dealers in your area, who would be glad to help you purchase a car from these auctions for a small fee. If you cannot get a reference to such a dealer , you can check local classified, craigslist etc for dealers that can help. They will then give you online access, where you can browse all the cars meeting your criteria. You can shortlist a few and find out how much these go for in the auctions - a value called as the "Marketplace Value". These are significantly lower than regular dealer price to your advantage. To give you an example - A 3 year old BMW at the dealer was around 35K and the auction price on it was around 26K. See the potential for savings here. There will also be very accurate condition report of the car. Report will include even the smallest of any ding or dent and also things like interior smell and damage report. A Clean or NOT CARFAX report will also be visible.  After you have shortlisted the cars and a price figures in mind You can tell him how much maximum you can bid on the cars. The dealers typically charge you $300 or $600 for their service and any expense like Fuel etc, if they have to drive the car won back to your city. In most cases you can also accompany the dealer to the auction and view the car before the auction. On a personal note - To pull this successfully your new "friend" with a dealer license has to trust you. This is since what if he buys your choice car for $20K and you don’t show up with the payment or you don’t get a finance done. So he will be stuck with a car and might have to take a loss on it to sell it back. Once the trust factor is secured, getting a car from a dealer level auction will be an excellent bargain.