If you are looking to save money on a used car, buying from an auto auction might be a good idea. The suffering economy has driven up the numbers of car repossessions, providing more inventory for auto auctions. Many car auctions are only for car dealers, but some are open to the public and offer vehicles at discounted prices. Professional auction companies conduct most public auto auctions, but sometime towing companies and government agencies hold them as well.
Most auto auctions are held as needed when the company accumulates enough inventory. Typically, an announcement will appear in the local newspaper to let potential buyers know. Manheim, a large vehicle auction company, posts upcoming public auctions around the country on its web site. Additionally, many government auctions are listed on the USA.gov web site. It usually takes some research to find local auto auctions, and you may have to wait some time before one occurs in your area.
Most auto auctions allow you some time to inspect the vehicles before the bidding begins. This may be several days before the auction or several hours. If possible, and you’re not sure what exactly to look for, have a knowledgeable friend or professional mechanic come with you to examine a car. You’re not allowed to test drive vehicles for auction, so you probably still won’t get the full picture.
It’s not enough to take the auction companies word for it on the history of the car. Do a title check on the car’s VIN number before you start bidding to make sure the car hasn’t been in a wreck or flooded. You can set up a temporary account with AutoCheck® before you go to the auction, which will allow you to pull vehicle history reports. Use a handheld PDA, laptop or call a friend at home to check the VIN number on all of the cars you are interested in.
When buying from an auto auction, the phrase "Buyer Beware" applies. While these vehicles are often sold cheaper than their market value, they may be in need of serious repairs, many of which you won’t know of until after you buy. Some auction companies will offer a 30-day warranty on the engine, frame and body for a fee, but in most cases, the car is sold “As Is.” If you do get some type of warranty, make sure you get it in writing.
All this said, don’t expect to walk away with a "steal" at an auto auction. Despite what you may see on television commercials, the bidding at most auto auctions is competitive. Often, you are bidding against used car dealers buying inventory for their lot. To avoid over-bidding, take a Kelley Blue Book with you, or use the online tools at their web site or Edmonds.com to determine the market value of the car. Additionally, consider the “buyer premium” you pay to the auction company. Some auction companies charge as much as 5% of the final purchase price.
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