Prepared for local auto auctions?
Chances are that if a vehicle has been traded in, leased, repossessed or totaled, it will find itself among the nearly 9 million vehicles that are purchased each year in an auto auction — either one that caters to dealers or one that's open to the public. And while there are bargains to be had, there's plenty of potential for disaster, too. Most folks should never set foot in this arena. But if you plan on going anyhow, here are some guidelines for success.
Know the Sellers: Before you even step into an auction, call its business office and find out who has consigned cars for the event you want to attend. There are three levels of sellers at most public auto auctions. The first two can be good for buyers. They should avoid the third at all costs.
•Level 1: Banks and other financial institutions: These sellers are not in the car business. They are in the lending business. Finance companies simply want to sell their vehicles at a reasonable price and be done with it.
Most public auctions will put these sellers at the beginning of the sale because, on average, they offer the best inventory and the most reasonable selling prices.
•Level 2: New-car dealers: These days, new-car dealers will keep most of their trade-ins, but not all of them. Often this is because it takes time and money to diagnose and repair issues for models with which they are unfamiliar. If you're someone who performs their own maintenance and can spend a healthy amount of time learning about potential issues ahead of time, new-car dealers are an excellent source of cheap vehicles.
•Level 3: Independent car dealers: These sellers are in the business of selling used cars. If they can't sell a car to a retail customer, they will bring it to one of three different places: another car dealer, a dealer auction or a public auction.
Know the Auction Rules: When you arrive at the auction, register at the front counter. The auction representative will ask for your license and usually a small cash deposit — maybe $100.
This is a good time for you to ask about the buyer's fees at the auction. Auctions will charge some high fees that won't be spelled out until the end of the transaction. Make sure you're not surprised by those fees after the fact.
Drive the car around if you can. Some public auctions will let you do this if you arrive a few hours early. If the vehicle won't start, call the auction staff and ask them to bring a battery box to the vehicle. Never bid on a vehicle without driving it.
Don't Get Drawn Into the Drama: Set and stick to a price limit for a vehicle. Remember, auctioneers are there to represent the sellers and are paid to sell. When you get to the auction block, there will usually be a mass of people staring at the auctioneer and auction staff. Most buyers will simply park themselves among the herd and believe in the hype that's being promulgated from the auction block. If the price is too high, don't bid. It's that simple.
You Have a Court of Last Resort: No auto auction can force you to buy a vehicle that has been misrepresented. More than 98 percent of the sales at public auctions go off without a hitch. But if you wind up buying a vehicle that truly has been misrepresented on the auction block, you have the right to walk away, cancel your check and fax a follow-up notice to the auction the following morning. Public auctions hate bad publicity almost as much as they hate an unfriendly judge with a real gavel.