Learn Tips and Traps When Buying a Used Car at an Online Auction

Yellow light: The vehicle has known issues that are not arbitrable.

 

The vehicle is being sold “as is.” “You’re out of luck if the engine blows up,” Huang warns.

Examine and confirm. Most auctions enable you to see the vehicles before bidding, but most do not allow you to test drive them. All you can do is get in your car, start it, and potentially shift into gear. Most online auctions provide a “condition grade” — a 1 to 5 scale with 5 representing new and 3 representing regular wear and tear — or a full list of flaws and mechanical faults. Nonetheless, get a vehicle inspection report for any car you’re seriously considering. Huang warns, however, that even these reports can omit critical information, such as water damage.

Bring a companion. Bring a car-savvy friend or perhaps a mechanic with you if possible. However, inform your wingman what you want to acquire and how much you’re willing to pay. It is their job to keep you from becoming overly thrilled.

Cast a broad net. “Be open-minded,” Reina advises, rather than falling in love with one car. Examine the “run list” online the day before to see what cars are for sale so you can target a few that meet your requirements.

 

Establish a bidding range. Once you’ve found a few viable options, look up the trade-in value of these vehicles on sites like Edmunds.com or Kelley Blue Book. “Cement this price in your mind, and don’t go above it,” Reina advises.

What you should not do

The risk traps to avoid are just as vital as what you should do:

Overbidding. According to Reina, in the heat of the moment, you may succumb to “the red mist” phenomenon, in which enthusiasm blurs your judgment. Perhaps the auctioneer is staring at you, waiting for you to raise your bid. Then, when you’ve reached your limit, turn your back to demonstrate that you’re not interested.

Signaling is ineffective. With automobiles in numerous lanes and the auctioneer’s machine-gun talk, it’s easy to miss the cream puff you were eyeing. Instead, attract the auctioneer’s attention early in the process so they know you’re going to bid. Remember that you’ll only have seconds to decide whether to buy or pass.

You’re bidding against a shill. Huang claims that dealers will occasionally bid on their vehicles to raise prices. If a bidder is known to the auction crew or appears to be an insider, be especially cautious not to exceed your bidding restriction.

Purchasing a lemon. Assuming the car history report is clean, it is still your responsibility to inspect the vehicle for mechanical flaws or body damage. Read automotive forums for mechanical issues with the cars you’re interested in. Then, make a checklist and inspect the vehicle thoroughly.