Nothing gets a bargain hunter more excited than the term “auction.” But can you truly get a decent deal when buying a secondhand automobile at an auction?
“You can get some nice discounts,” says Jeff Huang, remarketing sales supervisor at Westlake Financial Services, a Los Angeles-based national auto lending company. However, he adds, auctions exist to move cars that have failed to sell elsewhere for one reason or another, and they are attended by professionals who are well-versed in every trick in the book. You can’t test drive the automobile, you have a few minutes to check it, and the bidding procedure is frantic.
According to Reina, it all comes down to balancing your risk against your possible savings. However, if you can avoid typical blunders, he says you can save $3,000 to $4,000 when purchasing a used automobile.
What should I do?
Here are some auction-scene recommendations from these two insiders:
Select the appropriate auction. While internet auctions, such as those on eBay Motors might occasionally yield bargains, genuine deals can be found at local brick-and-mortar auctions. In addition, the vehicles are frequently sold at trade-in values. So, instead of paying $12,000 at a dealer for a 2013 Ford Edge with 90,000 miles, you might get one at an auction for $7,000, according to Kelley Blue Book data.
Look for auctions that are “open” or “public” and do not require a dealer’s license. Other specialty auctions sell certain vehicles, such as police cars, pickup trucks, or vehicles utilized by government employees.
Public auctions are normally free to attend, but if you intend to bid, you may have to pay a charge of around $40, according to Reina. Most auctions take cash or cashier’s checks and require a deposit right away and full payment within 24 hours. According to him, some auctions accept credit cards but charge up to a 5% fee for this service.
Take precautions before bidding. Before you try to acquire a car, go to a local auction numerous times merely to watch the action. Get a feel for how swiftly the automobiles move around the auction block, as well as the platform where they are sold. Larger auctions may have many lanes of vehicles moving at all times. Take note of how other purchasers bid and pay attention to the auctioneer’s rhythm.
Evaluate the danger. Check the auction website to see what, if any, guarantee comes with the automobile. For example, many people employ a “stoplight” system, both online and at the auction:
Greenlight: There are no known flaws in the vehicle, and arbitration is available to deal with any undiscovered mechanical concerns.