Government Seized Car Auctions Tips

First off, if you're planning on attending a Government seized car auction in your local area for the first time, make it a learning field trip. Auction houses have different rules and the actual bidding process can be confusing at first. So it's important that you get a good feel for how it all works and not actually jump into bidding right off the bat.

Have you ever wondered where the cars for auction come from? There a lot different ways that vehicles end up being sold through Government sponsored auctions, but mostly they're seized vehicles that different Government agencies and Law enforcement agencies acquire for a variety of reasons.

When individuals fail to pay their tax debts, default on their loans or use illegal funds to buy merchandise, they run the risk of having all their assets seized and vehicles are always hot items.

Something else you need to know and this one is critical. If you are certain that you want to buy a vehicle via Government seized car auctions, you must do your homework and set goals for yourself in terms of budget, class of vehicle and condition. Come to the auction with these goals in mind and you have a great chance of driving off on a new set of wheels and save lots of cash.

I don't want to discourage anyone from attending their first auto auction, it is most definitely possible to save great sums of money, particularly in an economy where big spending is a dirty word, these vehicles are not moving as fast as they once were. But your due diligence will save you the headache of buying a piece of junk.

For those of you who live in hurricane states, (Texas, Louisiana, Florida) you must scrutinize heavily when you consider auctions. Auctions held by companies representing Government agencies are usually the safest to attend in terms of overall condition of the vehicles that the public are able to purchase. I'm referring to other auctions, such as junk yard auctions, private companies, insurance auctions, off-lease auctions etc.

Hurricanes flood homes and vehicles in these areas at least once a year, as many as 50,000 homes and cars can be damaged by water each year and some of these vehicles are laundered back into pre-owned car status and sold through auctions. Never trust the word of the auctioneer, part of your due diligence is to run an full vehicle history report and find out exactly where your vehicle has been before you go falling in love with it. Next, you absolutely positively must inspect the vehicle thoroughly to detect this and other types of damage.

At Government seized car auctions, the vehicles usually come from other owners not Government fleets or service vehicles. So you must also scrutinize there and inspect the vehicle properly. At these types of auctions, usually the public is allowed to visit the auction lots days in advance to inspect the vehicles they're interested in. If the auction house does not permit this and insists that their inventory must be sold "as is" do an about face and find another place!

Beware of buyer's premiums. These are typically fees that are imposed by the auction house, again this is why it's important to first attend an auction and see how things work, talk to other bidders and learn the house rules. The premiums may only be a couple hundred bucks or a 5% to 10% of the winning bid. So don't let your bidding get out of hand if such fees exist.

Do your homework and you'll be rewarded.

1. Make sure your funds are in order - If you set a goal for yourself and determine clearly the exact amount of money you are willing to spend on a pre-owned vehicle through an auto auction, then make sure you have that amount of money readily available, since most auction houses require payment in full. If you don't have the funds available and are financing the purchase then make sure you are approved for a specific amount before you bid. Remember you will be legally bound to purchase that vehicle if you win the auction, so your funds must be available.

2. Get there early and inspect - Preferably, go to the auction lot a couple of days in advance if they allow it and inspect your vehicle. Have a Kelly Blue Book, NADA guide or Edmunds' Book handy for price reference and set a goal for your max bid for your car and never break that limit. Again >>>REMEMBER that if the auction house charges a premium, you must adjust your max bid accordingly, or you could end up paying above actual market value on the car you win.<<<

3. Run a full vehicle history report - This is why it's important to this days in advance. When you get to the auction lot days prior to the day of the auction, copy down the VIN numbers on the vehicles you want to bid on, then sign up for AutoCheck and run those VINs through this service, it will spit out tons of detail about each vehicle and give you piece of mind about what you're bidding on. California residents should also take notice of any emissions related issues in the report.

4. Avoid a bidding war - Don't let your emotions get out of hand. If you lose the car you wanted, there will always be another available. When people take this personal and go against more experienced bidders they feel they must stand out and forget about their goal, which was to save as much as possible and end up paying more for a vehicle that is not worth its price.

5. Vehicle titles in transit - Sometimes the vehicle titles are in transit and if this is the case the purchase contract should clearly state how long it will take for you to get your title. I highly recommend you find out if the the auction house is in possession of the vehicle's title before you actually start bidding. If they demand payment in full you should walk away with the title in hand.