Car Auctions - What You Need to Know Before You Bid

There's really no great mystery about why people get excited when they find a way to save money on items that they need or want. And, with big ticket items like cars, even saving only 5 percent off the ticket price can mean saving several hundred dollars. One of the best ways to enjoy huge savings, in the realm of 20% to 50%, is to attend a public auto auction where you can get a steal of a deal on seized or repossessed cars.

However, if you are thinking about going to a car auto auction for the first time to get a new vehicle for the family, then you do not want to go to the event without the proper knowledge and preparation. Without understanding the process and being properly prepared before going to motor car auctions, you could actually end up getting yourself into a bad deal and spending more money than if you had just shopped at a traditional car dealership.

By following a few tips from experienced public auto auction buyers, you can reduce your chances of getting burned at your first used car auction. Those who will heed the following advice will stand a much better chance of driving home with a good vehicle at an even better price.

First of all, people need to understand some of the basic facts relating to public car auction proceedings. Most of these motor car auctions have vehicles that were seized by a government agency, such as the police, DEA or IRS, or that have been repossessed by a bank or financial institution. All of these used vehicles are sold 100% "as is" and they do not carry any kind of warranty or guarantee. Therefore, any problems with the car simply have to be dealt with by the winning bidder, who will have no recourse with the seller.

Also, if you get the winning bid, you cannot return the car as all sales are absolutely final. Some people have tried to get a reimbursement for a vehicle that turns out to be a "lemon," yet this is extremely difficult to do because the car auction houses expect that bidders know exactly what they are getting themselves into before placing a bid.

Anyone who bids at public auto auctions also needs to keep in mind that you don't only pay the amount of the winning bid. On top of the bid price, the winner must also pay a buyer's premium that will equal anywhere from five to ten percent of the amount of the bid. This additional money pays for the services of the auction house and auctioneer. In most states, you will also need to pay for a license, registration and transfer fee.

If you are thinking about trying to buy a car at an upcoming public auto auction, then it is a good idea to take a mechanic along who can quickly evaluate the vehicle or vehicles you are interested in and give you advice. You will have some time at used car auctions to inspect the vehicle that you think you might want to bid on. With a proper inspection and with an understanding of the way the car auctions work, you stand a good chance of driving away with a great deal from a car auto auction in your area.

What Do I Need to Look Out for When Buying a Car at Auction?
One of the most valuable car buying tips is research, research, research! Go on the Internet and learn how to buy cars at auction. Join a few different car auction sites and get quotes for vehicles you're interested in, read reviews on various makes and models, find out what the trade-in value is and check for recalls. Once you've narrowed your search down to a few makes and models, visit a dealership and test drive them. Make sure the car has never been in an accident, has not had the odometer rolled back and that its performance is up to standard. It's also important to know whether the car has ever been used as a taxi or rental car. Those vehicles take a beating and are poor option for used cars. Make sure the auction house stands behind its quality assurance policies.

Where do auto auctions get their cars?
Auto auctions get their cars from a variety of sources. The cars may be from repossessions foreclosed by the lender or the bank. Some cars come from private owners who want to sell their car in an auction environment rather than through the newspaper. EBay has turned into a popular auto auction site with many dealerships selling their inventory through the website.

Am I allowed to test drive the cars at auto auctions?
That depends on the particular auto auction and who you are dealing with. Of course if you are buying your car online from an auto auctions site you will be unable to test drive the car unless you are local to the seller. Many auto auctions do not give the opportunity for buyers to test drive the vehicles because of the sheer number of buyers that would want to do so. You have to take this into account when you are dealing with auto auctions. Many times you have to rely on what the auctioneer lists as defects and take him or her at their word.

Is the seller obliged to state any defects on the car?
There is a huge difference between what a seller should do and what they actually do. This is where ethics comes into play. If the seller knows that the engine is knocking or that the car has been wrecked they should disclose this knowledge to the public before bidding commences. Many states require that if a seller knows about a particular problem and does not disclose it, they can be held liable if the car breaks down after purchase. Basically it is the seller committing fraud against the buyer and fraud in all states is illegal.