The Pros And Cons Of Buying A Car At An Auction

Everybody likes a bargain, but the trouble with cars is that bargains are very few and far between. New car prices have just peaked higher than $50,000, which is simply too expensive for many of us to consider. As a result, the demand for used cars is remarkably strong, causing car prices to climb across all sectors. That dream car bargain is getting more and more elusive at the moment, but, fortunately, there is still one way left to get your hands on a great deal — shopping at a used car actuion.

Sure, there are risks involved, such as limited rights, difficulty inspecting the cars beforehand, and even hidden costs, and we will cover these risks in further detail. However, there are also rewards to be had, including one that directly affects your bank account's health.

The truth is that there are negatives and positives no matter how you buy your cars. Buying brand-new is the most expensive option, but also it provides the most peace of mind, as each part is fresh to you and covered by a warranty. Buying a used car from a dealer is more expensive than buying privately, but, again, you'll be able to drive away with a warranty in most cases.

Much like buying from an auction, buying private usually means no warranty, but you can at least inspect and test-drive the car in this situation. Generally, the higher-risk approach of buying through an auction is more frequently used by car dealers, but it doesn't have to be this way. As long as you're aware of the risks and rewards beforehand, buying a car from an auction could be a great experience and even somewhat enjoyable

Car dealers shop at auctions for a reason — namely, vehicles sold at auction tend to trade for much less than their typical retail values. This is because of the risks involved, including the fact it's hard to know if the cars going through the auction have major mechanical faults, electrical issues, or anything else that will need to be fixed before the vehicles can be driven safely. As a result, a used car auction could be one of the best places for finding a cheap project car, provided you aren't scared of tackling a few jobs before hitting the road.

Buying a car at auction does require you to do your homework first. You need to understand how much the vehicles are worth in order to submit appropriate bids. Do this, though, and you could end up getting a new ride for thousands less than the same car would fetch on a dealer's lot – even if it does need a few repairs, there's often room to do the work and still end up with a bargain.

Other essential things to know before bidding include whether or not the car has a clean history, if the vehicle has any unresolved safety recalls, and what other models with similar ages and miles are actually selling for. The more you know before throwing your hand in the air, the better chance you stand of actually walking away with a great deal.

Probably the biggest concern when it comes to buying a car from an auction is that there usually isn't a cooling-off period or warranty. Really, there is no protection at all in many cases, unless you can prove that the auction house intentionally misadvertised or misrepresented the vehicle, in which case they may consider issuing a refund. This is very rare, though, so don't bank on it.

If you're handy with a wrench and in the mood for a little project, this may not be too concerning, especially if you're only eyeing up cheaper cars. However, if you aren't that great with tools, or you're considering a more expensive purchase, then the thought of having to buy a car that you can't thoroughly inspect or test drive with zero warranty is understandably a little concerning.

For many, the higher cost of buying from an established trader that offers test drives and warranties is worth the peace of mind provided. Equally, for dealerships with mechanics and a garage at their disposal where they can fix problems on the cheap, buying from an auction makes a huge amount of sense.

Not everyone buys cars in the same way. Some will narrow down their search, pick out a particular make and model, read through hands-on reviews, study pricing, and then head out to buy the best example they can find. Others are much less picky and simply establish a few must-have features before visiting a dealer to see what's available.

For the first type of shopper, auctions may not be the best fit. However, for the latter, the huge variety of cars going in and out of the auction provide a fantastic array of choices. Are you after a seven-seat SUV? Sure thing, just run on down to the local auction, see what turns up for the day, and have a go at bidding on whatever takes your fancy. If you miss out on the first one, don't worry — chances are there will be several others crossing the block on the same day, especially if you visit one of the larger auction houses.

Another great thing about auctions is that you may be able to drive your used car away the very same day. Just complete the payment, collect the vehicle, find it in the parking lot, and away you go. Typically, there's no lengthy handover process, you don't have to wait for servicing and valeting departments, and there is no time-consuming finance procedure. It's as simple as finding a car, landing the winning bid, getting the keys, and driving on home — just remember to sort your insurance out first before hitting the open road.

While the speed of buying a car at auction is all well and good, it poses some problems for buyers, too. First of all, the actual experience of buying a vehicle from an auction is very exciting. You may be eyeing up that old Corolla with a maximum price in your head of $5,000, but when it comes down to it, are you going to miss out on taking it home over a couple hundred dollars? What about $500, or an extra $1,000?

The truth is, many of us get carried away at auctions – it's very easy to do. Sure, it's exciting. However, when you've paid $1,500 over what you planned to spend and then find out the car has a pesky transmission fault when you collect it, that excitement soon wears off.

Also, auctions require immediate payment, unless you're a dealer with a stocking arrangement, but we'll assume you're just a regular shopper for the sake of this point. That means no financing and no affordable payments — you simply have to hand over a large sum of cash for an unknown entity. Oh, and auction fees can be quite expensive, too, so be sure to factor those in before splashing your life savings on a questionable sports car.