While art and antique auctions are some of the most well-known kinds of auctions that people frequent, many other items are sold at auctions as well, including vehicles. And even within the realm of vehicle auctions, there are different types of depending on what you’re looking for.
For some, vehicle auctions can provide an opportunity to purchase a used car at a great price, or to find a an old or rare vehicle that has been restored. For others, like Carvana, it’s a chance to acquire new inventory that could be featured for car buyers at Carvana.com. The following covers everything you need to know about different types of vehicle auctions and how they work!
Closed and Private Dealer Auctions
There are different types of vehicle auctions that happen throughout the country. Unfortunately, not all of them are open to the public. Many are closed auctions that are only open to dealers. Generally, dealer auctions require that buyers hold a dealer license. This basically means that only authorized dealers can bid in these vehicle auctions.
In most cases, representatives from various car dealerships are there to purchase vehicles for their inventory. After purchasing the vehicles at an affordable price, these dealers will then fix them up on their own and then sell them at a profit. It’s important to note that new and almost-new cars are sold in these dealer auctions.
Sometimes, private buyers can obtain a complimentary pass to a dealer auction, but they’ll end up competing with professionals. You can also get a broker-dealer to bid in these auctions on your behalf. While this service will come with a fee, you could end up getting yourself quite a good deal for a used vehicle in great condition.
Public Vehicle Auctions
Unlike dealer auctions, public vehicle auctions are open to everyone interested in buying a vehicle. In these auctions, you can find any vehicle you want, ranging from old to new. However, it is very common to find some beaten-up vehicles in public auctions. This is why it’s highly recommended that you attend them with someone who has great knowledge of vehicles and can inspect them for you.
In most cases, public auctions are used by private sellers, auction companies, law enforcement, and even dealers to dispose of old vehicles they do not require anymore. These auctions also include wrecked vehicles declared a total loss by insurance companies. Some of these vehicles are still functional but require repairs in order to return to the road.
Government Auto Auctions
Government agencies also hold auto auctions. Government auto auctions are held by various government agencies, including U.S. Customs and Border Protection and the General Services Administration (GSA). At these auctions, you can find good-quality passenger vehicles, as well as buses, trucks, motorcycles, boats, snowmobiles, and even planes.
Most of the vehicles auctioned are government surplus vehicles. This happens when different government agencies purchase new vehicles, and they need to dispose of the old ones. Other vehicles in these auctions are also government-seized vehicles that have been confiscated for various reasons.
Online Auto Auctions
Another vehicle auction that is steadily gaining popularity is the online auto auction. Nowadays, there are many sites that auction new and used vehicles. These vehicles are posted on the sites, and then bidding begins from interested buyers.
With online auto auctions, you can simply search a site on Google, register with it, and then set out on your journey to find your dream vehicle. This is a great option for those people who travel a lot and do not have the time to attend public, government, or dealer auctions to inspect a vehicle.
You simply rely on the information posted on the website, make your bid, and then monitor the auction. A great thing about online auto auctions is that you can purchase a vehicle in a city different from the one you reside in.
How Do Vehicle Auctions Work?
So how exactly do vehicle auctions work? Before the official bidding starts at an in-person auction, all the vehicles are driven to the auction hall one after the other. As each car is presented on stage, the auctioneer will describe its features to all the bidders gathered in the auction hall. It is very important that you pay attention during this time because the description from the auctioneer is regarded as a legally binding selling statement.
All the vehicles inside the auction hall are usually listed with a starting price. If you’re interested in a particular car, all you need to do is preview it to ensure that it meets your specifications and then set a maximum bid for it. Once this vehicle hits the stage, you can now start bidding.
It is important to note that there might be other potential bidders for the same car you’re interested in. This means that you should expect multiple bids for the vehicle and for the price to go up. The actual bidding is done by simply raising your hand with a catalog. This process goes on until there are no more bidders left.
In general, the bidder with the highest bid gets the vehicle, and this is the time you’re likely to hear the hammer’s sound. It should be noted that some auction houses require bidders to use a particular mode of payment. Therefore, before you start bidding, ensure that you confirm the accepted mode of payment in that particular auction house.
If you’re a newbie to vehicle auctions, it may be a good idea to attend a few vehicle auctions before actually bidding on any vehicle. Doing this can help you get acquainted with how the whole process works.
Helpful Tips for Bidding on a Car at a Vehicle Auction
While the auction process is fairly straightforward, there are a few tips that you can use to get the best vehicle at the right price. If you are considering attending an auction, keep the following tips in mind.
Be Proactive
It’s no secret that many vehicle auctions feature some beaten-up vehicles. For this reason, it’s important that you ensure the vehicle you’re about to bid for is in good condition and isn’t totaled or flooded. The best way to do this is by running a VIN check to get a report on the car’s history.
Set a Budget
Getting into a bidding war at the vehicle auction house can be quite exciting, but it can also end up with you overpaying for a particular vehicle. Therefore, it’s best to set a budget for yourself before bidding starts and ensure that you stick to it regardless of whatever happens.
Be Sure to Factor in Fees and Other Costs
Before deciding if a car is a good deal or not, you need to be sure to account for any costs that will be added to the car’s purchase price. Typically, a “buyer’s premium” of 10% to 20% will be added. Reconditioning costs also need to be considered. A car bought at auction may have unknown repair needs, so be sure to place your bid with this in mind.
Final Thoughts
Vehicle auctions have become the go-to place for people looking for good-quality vehicles at a bargain. However, before attending a vehicle auction to bid for a particular vehicle, ensure that you’ve done extensive homework so that you don’t end up spending a lot more than you need to.
