Buying a car at auction might sound appealing as it can save you thousands of pounds on the asking price, depending on the model and its age.
But to benefit from such savings you need to be prepared to take some risks. Read on to find out all about bidding, buying and benefiting from winning cars at auctions.
Why buy a car at auction
The main reason for buying at an auction is that you could get a car for a lot less than if you bought it off a dealer’s forecourt. What’s more, it’s exciting and it’ll give you an insight into the world of the car dealer.
Why not to buy a car at auction
The reason you can save money is you have to do a reasonable amount of legwork yourself before getting to the auction. And there are plenty of pitfalls for the unwary to fall into.
What kind of cars are sold at auctions?
The popular image of a car auction is a draughty hangar with dodgy-looking geezers bidding on ageing rust buckets. Of course, there are auctions like that, but there are also auctions where leasing companies, fleets and banks sell prestige cars; where well-known car dealer groups sell the cars they take in part-exchange; and even sales where manufacturers sell nearly-new used cars.
Before you bid
When you buy at auction, the onus is very much on you to do your research. The auction house will have a catalogue of the vehicles in the sale, but this will only outline basic facts such as the miles the car’s covered, whether it’s been written off by a car insurance company and whether it has a valid MOT.
Unless it’s specified in the car’s description, you will need to get a history check done to ensure the car isn’t stolen or being sold with outstanding finance on it. To get an idea of what you should be paying, look at a valuation service and at classified ads on the Internet to see how much the car you’re interested in sells for through dealers.
The dry run
To get a feel for the auction environment, leave your credit card at home and visit a couple of auctions so you’re familiar with what goes on. Sales frequently happen at a dizzying pace - cars sell in seconds rather than minutes so it’s good to get used to this. Also, carefully check any terms and conditions and remember there will be a buyer’s fee.
Don’t kid yourself that another £50 won’t hurt, because within seconds you could be hundreds over budget
Check before you buy
All cars that go through the auction process are available to inspect, and will be unlocked at a certain point to allow prospective buyers to look over them inside and out. You can ask auction staff to open the bonnet and start them up too. This is the moment to make sure all the dashboard warning lights go out (don’t be surprised if the low fuel light stays on!) and that there’s no smoke coming out of the exhaust.
Check the interior and try to make sure all the buttons and switches work. It’s worth looking in the glove box too. Sometimes there will be paperwork in there that will help you piece together the car’s history.
Traps not to fall into
Make sure you see the car’s engine running and check the inside, if only to be sure it hasn’t been smoked in. Also, remember it’s easy to get carried away by the moment. Set yourself a target that’s around 15% less than the price a dealer is charging for the same age, model and specification of car and stick to that. Don’t kid yourself that another £50 won’t hurt, because within seconds you could be hundreds over budget and any potential savings will have vanished.
You‘ll also probably be bidding against dealers. They’ll know the auction environment intimately and won’t want private buyers snapping up the best deals.
Bidding and buying
To bid you must register first. You’ll either be given a card to hold up or you’ll need to raise your hand. Try to make eye contact with the auctioneer so you know they know you’re bidding. If your bid’s successful, the auctioneer will bang his gavel.
Once you’ve bought a car, assuming it’s got a valid MOT and you can get it insured and taxed, you’re free to drive off. Alternatively, you can arrange to have it delivered for a fee.
When you buy a car at auction you don’t have the same consumer laws protecting you as when you buy from a dealer, or even from a private seller. Details in the descriptions are rudimentary and auction houses are under no obligations to fix a car with faults.
Chances are, you also don’t know the car’s history; it may be a lemon with numerous defects that a dealer has given up on. So there’s an element of risk to buying at auction. The skill comes in doing your best to minimise this.