How Does Car Auctions Work
It can be difficult to find great deals on used cars. Most consumers soon become frustrated by the dealership experience, due to the haggling and risk of a bait-and-switch.
It is possible that you have heard about the low prices offered by auctions for vehicles. Car auctions offer a large selection of used cars in one location. These vehicles are generally in good condition and at a reasonable price.
However, any veteran car auctions participant will tell you that actually purchasing one of these cars can be difficult. These events attract hundreds, if not, thousands of other bidders, most with some auction experience.
The whole process can seem daunting, especially for novice buyers and those not familiar with the used car market.
To get such low prices for vehicles, there is a lot of work, energy, time, and effort involved. If you are willing to work hard, you can save lots of money on a great car.
Continue reading to learn everything you need about car auctions.
Are you required to have a license in order to attend car auctions?
It is important to be prepared for auctions. The entire experience of auctions will be unfamiliar if you don't know what you're getting into.
License requirements vary depending on the type and location of the auction.
To participate in a dealer's sale, you will typically need a license from car dealers. There are websites that permit public participation in certain dealer auctions. Sometimes, these sites charge a deposit or a fee.
Public auctions are open to all and require no licensing.
You can find them online or in person. Many car auctions went digital in the last year, due to the COVID-19 pandemic.
What happens at Auto Auctions
Car auctions are, in theory, the same process as other auctions. The item is bidden on by the participants, who then increase their bids until there is only one remaining bidder. The vehicle is then awarded to the remaining bidder.
In practice, however, it is more complex.
Before participating in an auction of cars, it is important to read the rules. Every auction has its own rules, so it is a good idea that you review them in advance.
Contrary to popular belief many car auctions can be viewed as public events. These are posted in advance, including the vehicles available for purchase. Anyone can participate in the event and place a wager online.
Things move fast when it comes to auction day. You will likely be outdoors and on your feet, most of the day, so dress comfortably.
These processes are well-known to most attendees, so it is easy to get overwhelmed. This can be avoided if you prepare well.
Potential buyers can see the vehicles available ahead of time by participating in auctions. You can then narrow down your search before it starts.
You also don't want to limit your search to one listing. If you are outbid, this can lead to disappointment.
The whole experience is extremely fast-paced. There is rarely enough time to do the kind of browsing that you are used to doing at a car dealership.
Make a list of the cars that you are interested in and make sure to verify their vehicle identification numbers (VIN).
You can do a quick internet search for the number if it is available. This will give you a detailed vehicle history report that may influence your decision to place a bid.
You could consider factors such as previous owners, major accidents, other damage, maintenance history, and odometer readings. Recalls by manufacturers are often listed.
Auctions often have a large number of vehicles for sale. These are usually for different reasons. Examples include:
- Police or government seize cars
- A car insurance company declared Salvage title cars a " total Loss".
- Surplus vehicles
- Title pawns
- Dealerships have failed to sell cars
Arriving early is a key way to stay ahead of the game. You can then locate vehicles that you have identified ahead of time. You will have more time to inspect the vehicle.
Here is the place to take a close look: under the hood and inside the cabin. You might be able to start the car, or test-drive it in some cases.
What to look for
The car will often have a colored light over it when it is placed on the ground. This indicates the vehicle's condition or the documentation. You may see any of the following lights:
- Greenlight -- good condition
- Red Light -- This vehicle is being sold as it is (usually in a less-than-desirable state).
- Yellow light -- This vehicle may be subject to arbitration/further announcements
- Blue light - There is currently no title for this car. However, the seller must provide it within thirty days.
Most cars will be in good condition. They may still have some issues down the road.
This is why it is important to inspect the car yourself before bidding. It may be worth hiring a mechanic if you are unsure of what to look for.
It is best to not focus your attention solely on one car. Instead, make a list that highlights the most important parts of your car.
This approach will enable you to find several cars that meet your needs. You have backup plans in case you lose your primary car.
Car auction bidding
It's a smart idea to establish price limits before you start the bidding process.
This is particularly important for first-time bidders. It is easy to get too excited and bid more than you should. Setting a realistic time limit can help keep you from getting carried away.
You might also want to do some research on the vehicle you are interested in so that you can get an idea of its market value. You can often find a lot of information online by simply entering the VIN number of the car you are interested in.
This will allow you to understand the vehicle's history and the market value of similar vehicles.
Also, consider any additional shipping and auction fees that might be included in the deal. These fees are not included in your bids or the final price of the car.
Some vehicles also require a reserve. This is the minimum acceptable offer and can indicate how likely you will be to win this vehicle. It's quite possible that you will be outbid if you cannot meet the reserve.
It moves quickly once the bidding has started. This is why it's important to know where is located in your lane. This person is responsible for finding bids and signaling to the auctioneer.
Keep track of the current bid amount. You won't accidentally overbid.
You will need to complete additional steps if you win a car.
Car Auction Payment
The process of vehicle shipping and payment for successful bidders is very different from the traditional car dealership experience.
You should always be careful with your wagers. You have to complete transactions as soon as you win a car. This cost may include upfront payment.
It is important to remember that auction fees may apply to the winning bid price for the car. Shipping fees are not included.
Each auction will likely have its own payment terms. Some auctions will only accept cash, others accept credit cards and checks. You should know this information in advance so that you are ready to follow their rules after a successful bid.
There are some legal requirements that must be met in order to close the sale.
You must get the title from the previous owner. This proves your ownership. This is then assigned to you by the DMV in your state.
You will also need to have car insurance that is in line with the regulations of your state.
Auto Auction Shipping
You will need to transport the vehicle home after the auction.
A vehicle shipping company with experience is the best way to do this. These auto auction transport companies, like the auction houses, will have their own payment terms that you should familiarize yourself with.
You don't have to worry about problems during the return trip.
Move Car makes it easy to secure shipping after an auction.
They offer affordable, flexible shipping services to safely transport your vehicle from the auction. You can leave the auction house to meet your prize at home. It's that simple!
The experts in vehicle shipping
Car auctions can be overwhelming but shipping your vehicle doesn't have to be.
Call us today to get more information and a quote for transporting your car.