F.A.Q
What is an auto auction and how does it work?
What happens at an auto auction?
If auto auctions are such a good thing, why haven’t my friends and neighbors heard of them?
OK, this sounds good, but is it really legal?
Can I go to a “closed” auto auction?
What is the difference between all these kinds of auctions?
How can I determine the condition of the auto I’m interested in purchasing?
Is there a warranty on the auto I purchase?
Where are auto auctions held?
I looked through all of the auctions I could find, but there isn’t a car that interests me. What now?
What is an auto auction and how does it work?
The short answer is that an auto auction is a place where used vehicles are sold to the highest bidder, but there is a bit more to it. Government agencies, banks, police departments and even some car lots place autos for bid to sell them quickly. The average age of these autos is 2-3 years with an average of no more than 40,000 miles on the meter. Auction houses have regular auction dates as well as a list of vehicles for sale on each date, called a “run list”. Most auctions allow pre-sale inspections so you can check out any autos that interest you. Some even provide Carfax reports for each vehicle. Alternately, you can get your own Carfax report for each vehicle.
What happens at an auto auction?
You should plan to arrive early on the day of the auction to look over the auto you will bid on. If it is your first trip to the auction, it is a good idea to ask a lot of questions, watch how things operate and listen closely. Auctions happen quickly. You should have a price in mind that you are willing to pay (usually not over blue book value) and stick to it to avoid paying too much. Depending on the individual auction house, you may be asked to pay at least a partial payment in the form of cash, bank cheque, major credit card or similar on the day of the auction and the remainder within 48 hours.
If auto auctions are such a good thing, why haven’t my friends and neighbors heard of them?
Auto auctions are a secret. Many are attended by used auto dealers. They want to buy the autos at up to 90 percent off the retail price, mark them up, and sell them to you, your friends and family and your neighbors. If all of you knew about the deals they were getting, why would you buy from your local auto lot?
OK, this sounds good, but is it really legal?
Absolutely! Think about the thousands of cars that are forfeited to the government or banks every day. Even more are sent to auction by governmental agencies. All of these autos are expensive to store. The agencies holding them have to do something with them, and it is cheaper to sell them than to store them. These are the vehicles you are bidding on. Often there are reserve prices, sometimes called the “low” or “floor” price. Vehicles may not be sold below this price set by the seller. This ensures that sellers get the minimum price they are asking for a car.
Can I go to a “closed” auto auction?
That depends. Are you an auto dealer? If not, then you probably can’t. The good news is that most auto auctions are open, meaning that anyone can attend and take part. You only need a valid picture ID and to be over the age of 18. Some auctions don’t charge any additional fees on your purchase.
What is the difference between all these kinds of auctions?
There are three basic types: a government-run auction, police impound and a repo auto auction. The biggest difference is the source of the autos they sell. Government auctions receive vehicles from agencies such as Homeland Security, the FBI, IRS, DEA and Border Patrol to name just a few. State, county and local governments also regularly auction surplus property. Police impound auctions are just what the name indicates. The cars here have been seized by police agencies as the spoils of illegal activity. A repo car auction often is held by a bank or finance agency that has repossessed property that the consumer could not pay for. Other than that, government auctions do not require buyers to pay fees or registration charges. Other auctions run by private auction houses may have a 5 percent fee tacked on to the top of your bid. This is the auction house’s income.
How can I determine the condition of the auto I’m interested in purchasing?
Most autos on the auction block are only 2-3 years old and have less than 40,000 miles on the meter. Often auction houses will host pre-sale inspections of all the autos available for a given auction date. There you can inspect the auto that interests you, obtain a Carfax report. Each will be marked with the seller’s name, mileage, auction lot number and lane assignment. Arrive early the day of the auction, and you will be able to inspect the car you desire prior to bidding. Some auction houses offer post-sale inspections by their own mechanics. Lastly, it is wise to take advantage of free arbitration services offered by auction houses that protect both seller and buyer interests.
Is there a warranty on the auto I purchase?
Typically there is a free 3 month warranty on the auto offered by the auction venue. There are extended warranties that can be purchased also. These are similar to the extended warranties any auto dealer offers.
Where are auto auctions held?
There are auto auctions held in every state in the union. In addition to private auction houses, every level of government – federal, state, county and local – auction autos, heavy duty equipment, office items and more throughout the year.
I looked through all of the auctions I could find, but there isn’t a car that interests me. What now?
Thousands of vehicles come into the used auto auction market every day. You should check back in a day or so. If you have found an auction house you’d like to work with, you can obtain multiple run lists for various dates.