Always thought that car auctions were only for motor traders? Not so, although the majority of cars sold at auction do go to the trade. One auction house estimates that only one in ten automobiles is sold outside the trade. However, with a little practice and a slice of luck, you too can buy a car at a discounted price.
How car auctions work
Car auctions are similar to almost any other auction. Each car is presented as a lot and the auctioneer invites the people present to bid on the lot. The highest bidder wins the lot. It sounds very simple, but it’s worth remembering that the auctioneer is highly skilled at selling the lot for the top price so it’s important to keep a level head. It’s also worth remembering that if you are the high bidder there are other fees apart from the bid so the total will be higher than just the winning bid
Do a dry run first
Instead of jumping in with both feet, try going to an auction first to see how they work. Leave your money at home so you don’t end up with an expensive impulse buy. It can be very hectic in an auction house and the lots can sell very quickly, so it’s worth doing a dry run first to get a feel for the procedure.
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Decide what sort of car you’re looking for
It’s a good idea to know what car you’re looking for beforehand. Many auction houses release lists of the lots up for auction days or weeks beforehand. This gives you a chance to look up the book price beforehand. If you’re not mechanically minded, try to take someone who is. Although you may not be able to check the car over thoroughly, they may pick up on any obvious flaws.
Set yourself a budget
It’s a good idea to set yourself a budget and try to stick to it. Don’t let the auctioneer make you bid more than you can comfortably spend. There are extra fees on top of the winning bid including the buyer’s fee and a fee for the logbook. These could make the difference between buying a bargain and losing a lot.
Make the most of the inspection time
Auction houses allow you to see the lots before the auction and some may let you start the cars and sit in them. Make the most of this time as this is the only opportunity you will get to examine them before the auction starts. Have a good look at the description, it may give disclaimers that will limit any legal comeback in the event of serious problems.
The bidding process
When the moment of bidding finally arrives it happens very quickly. Bidding starts very low but will soon escalate to near the guide price. Remember that the auction house charges a percentage on top of the winning bid which can seriously increase the final price. If you are not bidding on this particular lot, don’t start waving your arms about or raising your hand as this can be seen as a legitimate bid. And lastly, try to keep your calm. You have a budget and as long as you stick to it, the chances of overspending are limited.
Paying for your new car
As the winning bidder, you will have to pay a deposit at the end of bidding. It will either be £500 or 20% of the winning bid – whichever is higher. Check with the auction house beforehand as to what payment options are acceptable. You won’t be allowed to move your new purchase until its been paid for in full and payment has cleared. Sooner is better as auction houses charge by the day for storage after the auction ends.
And finally – moving the car
If your new purchase has a valid MOT and you’ve took out a valid insurance policy then in theory, you can drive it away once you’ve paid in full. It’s advisable to drive it around the car park first to check everything works as it should. Just because a vehicle has an MOT doesn’t mean it’s roadworthy. It simply means it was safe at the time of testing. If the vehicle has no MOT then it will need to be transported away. The auction house can provide this, however there are many transport companies so it may be worth getting a few quotes.
Road tax can easily be arranged now via online or over the phone.
So can you get a bargain at a car auction? The simple answer is yes, however, you need to be careful, be very aware of the way auction houses work and keep your wits about you.