Buying a car is always an exciting purchase. Whether you buy it used or new, there’s something about getting those keys and hitting the open road that makes it outweigh any stress you may have experienced in the buying process. If you’re planning on purchasing a car, you may be considering heading to a car auction, and we don’t blame you; there are often great deals to be had.
However, shopping at an auction is very different from a dealership, and you should know the advantages and disadvantages before you commit.
Pros of Buying a Car at an Auction
Value for Money
Everybody loves a bargain, and there are some real deals to be found at a car auction. Typically, cars bought at an auction are significantly cheaper than those bought from a dealership, including vintage cars and the most popular car brands. As long as you’re willing to put a little time and effort into finding the right vehicle, you could walk away with a steal, paying significantly less than the car is worth.
Some of the best bargains found at auctions are government and fleet automobiles. It’s common for companies, state departments, and other organizations to update their vehicles after they have racked up a certain number of miles or reach a particular age. These cars tend to be in good condition, having been maintained to an excellent standard while in use.
They also typically come with full-service history, unlike many vehicles purchased at auctions, giving you a clear picture of what you’re buying.
To give yourself the best chance of landing a fantastic deal, it’s a good idea to visit a few auctions before shelling out any money. Pay close attention to what the prices go for the cars you’re interested in; this can give you a better idea of what is a fair price. A little bit of research goes a long way when it comes to buying at auctions.
As a rule, auctions offer a more comprehensive selection of vehicles than dealerships. Dealerships tend to have a much smaller range available and aim to have a broad appeal, and some even focus on particular brands, so you’re less likely to find something a bit unique.
When purchasing a second-hand car, whether at an auction or from a used dealership, you don’t have the same flexibility as buying a new car. For instance, you can’t necessarily pick the ideal color or year. However, if you aren’t in a rush to make your purchase, you can shop around, and you never know—the perfect car might turn up.
It’s an Exciting Experience
Car auctions are fun, especially for motorheads. Even if you just attend as a spectator—an excellent idea if you’re planning to buy from an auction in the future—the thrill of an auction can’t be matched by any other shopping experience.
Auction houses are also great opportunities to network with car enthusiasts, experts, and dealers who might just share some hot tips. On top of that, there’s always the chance that you might come across a rare gem.
Cons of Buying at a Car Auction
No Test Drives
When buying a car from a dealership or private seller, giving it a test drive is standard, and many people even have a mechanic check it out before making an offer.
However, having the chance to try before you buy is decidedly rare at auctions. While you can learn a lot from the car’s condition report, you won’t really know what it’s like to drive or what issues it has until after you’ve driven it home.
For some people, this makes buying vehicles at auctions a complete no-go, but, if you’re willing to take the risk and prepare yourself for the fact that you might have to do a little work to get it into tip-top condition, you could buy your dream car.
Spending a bit of time and effort on your automobiles, whether that’s rotating your tires or protecting them from the elements with the best car covers, can give any car lover satisfaction and keep their vehicle in the best condition for longer.
Buying an automobile at a dealership gives you some security that if there’s any work that needs doing on it, at least some of that should be covered by the warranty. At an auction, this is rarely the case. While some cars may still be under warranty, there is no guarantee; auction vehicles are sold as-is.
This shouldn’t necessarily put you off from buying a car at an auction, but you should go into any purchase with your eyes open and be prepared that you may have to spend a significant amount of money on repairs.
One of the disadvantages of cars bought at auction is that they sometimes have less-than-ideal backgrounds. For example, they may be recovered stolen vehicles or have a salvage title. A salvage title is issued by an insurance company when a vehicle has been damaged to such a degree that it is deemed a total loss. Usually, this is because it has been in an accident or has been extremely heavily used.
A salvage title doesn’t mean that a car isn’t worth buying, nor that it won’t drive well. In fact, it could mean you get a bargain. It does, however, affect your insurance possibilities. For example, if the car gets into an accident, the insurance company will pay very little, if any, for damages.
Beware the Hidden Costs of Buying at Auction
While it’s true that cars are generally sold at much lower prices at auction than at dealerships, don’t forget to take the extra costs into account when coming up with your budget.
These costs may include an Auction Clearing House fee, a documentation fee, auctioneer’s commission, and shipping fees. You should also be aware that you may have to pay a deposit—usually 10% of what you’re planning to pay in cash.
Purchasing a vehicle at a car auction involves a little more risk, but that risk can lead to great rewards. As long as you are aware that you may have to spend some money on repairs after you get your new car home, there’s no reason why you shouldn’t start looking at auctions now.