Tips and pitfalls when buying a used car at auction

Nothing excites a bargain hunter like the word “auction”. But when it comes to buying a used car at auction, can you really get a good deal?

“The answer is yes with an asterisk – or maybe three – after that,” says Richard Reina, director of product training at auto parts site

“You can find great deals, absolutely,” says Jeff Huang, remarketing sales supervisor at Westlake Financial Services, a national auto finance company based in Los Angeles. But, he adds, auctions are there to move cars that haven’t sold elsewhere for one reason or another, and they’re attended by professionals who know all the stuff from the book. You can’t test the car, you have little time to inspect it, and the bidding process is a whirlwind.

It’s really about balancing your risk against your potential savings, explains Reina. But if you are able to avoid common mistakes, he estimates that you can save $ 3,000 to $ 4,000 when buy a used car.

What to do

Here are some tips on the auction scene from these two insiders:

Pick the correct bid. While online auctions, like eBay Motors’, are sometimes a bargain, the real deals are local brick-and-mortar auctions. Vehicles are generally sold at trade-in prices. So instead of paying a dealership $ 12,000 for a 2013 Ford Edge with 90,000 miles, you could snag one at auction for $ 7,000, according to data from Kelley Blue Book.

Look for “open” or “public” auctions that do not require a reseller license. Other specialist auctions sell limited types of vehicles such as police cars, vans, or cars driven by government officials.

You can usually attend public auctions for free, but if you plan to bid, you may need to pay a fee of around $ 40, Reina says. Most auctions accept cash or cashier’s checks and require immediate deposit and full payment Within 24 hours. Some auctions accept credit cards but charge up to a 5% fee for this service, he says.

Look before you bid. After finding a good local auction, go a few times just to watch the action before trying to buy a car. Familiarize yourself with the speed at which vehicles move through the auction block, the platform where they are sold. Large auctions can have multiple lanes of constantly moving vehicles. Take note of how other buyers bid and listen to the auctioneer’s delivery cadence.

Assess the risk. Check the auction website to find out what warranty, if any, is included with the car. Many use a “stoplight” system, both online and at the auction itself:

  • Green light: the vehicle has no known faults and arbitration is available to deal with undiscovered mechanical issues.

  • Amber light: the vehicle has known problems not subject to arbitration.

  • Red light: Vehicle sold as is. “If the engine blows up, you’re out of luck,” Huang said.

Inspect and verify. You can usually inspect cars before auction, but most auctions do not allow a test drive. All you can do is sit in the car, start it, and possibly turn it on. Online, most auctions provide a “condition score” – a scale of 1 to 5, with 5 being new and 3 being normal wear – or a detailed list of imperfections and mechanical malfunctions. Even so, make sure you have a vehicle inspection report for any car that interests you strongly. However, Huang warns that even these reports can miss vital information such as flood damage.

Bring a friend. Preferably bring a car connoisseur friend or even a mechanic with you. But whoever your winger is, tell them what you want to buy and how much you’re willing to spend. Their job is to keep you from getting too aroused.

Throw in a large net. Instead of falling in love with a car, “be open-minded,” says Reina. Check the “shopping list” online the day before to see which cars are for sale so you can target several that meet your needs.

Define a bidding range. Once you have identified several potential candidates, check the trade in value of these cars on pricing guides such as or Kelley Blue Book. “Consolidate that price in your head and don’t go over it,” says Reina.

What you should not do

The dangerous traps to avoid are just as important as what you need to do:

One-upmanship. In the heat of the moment, you may fall victim to “red haze” syndrome where excitement clouds your judgment, says Riena. Maybe the auctioneer is watching you, waiting for you to increase your bid. If you’re at your limit, turn your back to show you’re not interested.

Bad signage. With multi-lane cars and machine gun banter from the auctioneer’s voice, it’s easy to miss the cream puff you were watching. Get the attention of the auctioneer early in the process so they know you will be a bidder. Remember, you will only have a few seconds to make the decision to buy or give up.

Bid for one shill. Huang says dealers sometimes bid on their own cars to raise the price. If a bidder is known to the auction team or appears to be an insider, be very careful to stay within your bid limit.

Buy a lemon. Assuming the vehicle history report is clean, it is still your responsibility to do what you can to check for mechanical faults or body damage. Go online to read automotive forums for mechanical issues with the cars you are targeting. Create a checklist and carefully inspect the car.

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