About Used Car Auctions

Who Should Bid?

• Car auctions are mostly geared to those who either personally know something about cars or have the money necessary to pay those who do. You will not be able to test drive the car, so therefore, the only way to get a handle on what may be right or wrong with the vehicle is to inspect it by looking inside and under the hood.
  
  

Preparation

• The opportunity to inspect the vehicle takes place during the pre-sale inspection, so find out when this takes place and come prepared. Be sure that you know the exact terms of the sale such as whether a deposit is required to allow bidding and what kind of payment terms are accepted. Lastly, make sure that you have a way to get the vehicle home. Most auction sites offer towing services, but if you decide to drive the vehicle off the lot make sure that the temporary registration is valid.
  
  

Extra Charges

• At most car auctions there is a buyer's premium attached on top of the bid. If the premium is 5 percent, in other words, then a bid of $10,000 means you'll be paying an extra $500 on top of the bid. The excitement of the bidding process can often get so enthralling that you forget all about that premium. Don't let that excitement blind you to any extra expenses.
  
  

Car History

• The auction is looking to make money and should therefore receive no more trust than any other aggressive car salesman. Many auction sites are looking to unload for good cash and don't spare much expense is providing quality information about the history of the vehicle. Always check with a site like Carfax to get as much information about the history of the vehicle as possible.
  
  

Types

• Several different types of car auctions exist. Wholesale auction auctions are primarily relegated for transactions between car dealers. Public auto auctions are open to anyone. Police auctions and government auctions work essentially the same way and are also open to the public. Insurance and salvage auctions are generally reserved for dealers. Online auctions are open to those who qualify for registration, which usually just means having a credit card.
  
  

Traffic Light System

• Behind the auctioneer you will see a system that either is or resembles a traffic light with red, yellow, and green lights. Understanding the importance of this system can save you a very serious headache. The green light means that the title clear and also that you can test drive the vehicle after purchase, but you must test drive it within an hour after purchase. The vehicle sold under green typically is OK to drive immediately. A yellow means the title is currently in transit as well that there may be possible frame damage--buyer beware. A red light indicates the vehicle is being sold as is; this could indicate problems ranging from the odometer having been rolled back to the entire engine having been rebuilt.
  
  

Bidding Tips

• Know exactly what you are looking for before you begin bidding and place a maximum limit on how much you are willing to bid and stick to it. The bidding process can often get hysterical. Don't get caught up in the madness. Unless you are a professional or extremely knowledgeable about cars, bring along an expert to help inspect any vehicle you plan to bid on.