What is Salvage title? Buyer Tips

What to Ask When Buying a Car: 10 Questions to Ask Before Buying a Used Car at an Online Dealer Auction

By Mike Richards Updated: 05/22/2019 Posted: 03/17/2017

Online car auctions, including dealer auctions, are great locations to score excellent deals on discount cars. If you’re planning to buy at a dealer auction, you’ll need to first meet your state’s requirements for a dealer license—a process that can take some time. Otherwise, you’ll have to meet the specific criteria outlined by the online auction site you’ve chosen. Manheim dealer auctions are a perennial favorite, but you can find used car dealer auctions across the country.

Before you take the plunge and make a purchase, here are 10 questions you need to ask car dealer or even yourself about a car for sale at a dealer auction.

What’s the Status of the Title?

Title problems can lower the value of a car and may make it nearly impossible to insure or sell. Before you get excited about an apparently great deal, check the status of the title. If the car is sold as a salvage title, it should sell for 5% less than its resale value, at a minimum. Remember that salvage vehicles can be a lot of work, so it’s wise to know exactly what you’re getting into before you take the plunge and make a purchase.

Can I See a Car History Report?

What to ask when buying a car? It’s history! Never, ever buy a car without a vehicle history report. Some unscrupulous dealers sell stolen cars, while others use an illegal title washing process to obscure the fact that a car is a salvage vehicle with a lower value than cars that have not been declared a total loss.  A car history report is the best way to see what’s happened to the car. If the dealer won’t provide you with one, request the VIN number so you can procure one yourself. If you find discrepancies between the history and what the dealer has told you, move on.

What is the Cost to Transport the Car?

If you must transport the car from car dealership across state lines, you may need to pay additional taxes. And if the car is not within driving distance, you’ll probably have to pay to ship it. That can be a costly process, so look into the cost to ship the car before you agree to pay.

Can I Afford This Car?

When you buy a car at an auction, you’ll need to pay in cash. Most lenders won’t finance such a vehicle, and even if they would, it’s a bad investment to finance an auction car. Instead, make sure you can pay upfront and in cash.

Is the Car Worth the Price?

Another consideration is whether the car is worth the price. Even if you can afford it, you don’t want to sink money into a losing investment. Consider not only the price itself, but also the costs of repairing any damage, the cost to insure the car, transportation taxes, any taxes associated with the vehicle, and costs such as title insurance.

Can I Insure the Car?

This is the one of most important things to ask when buying a car. If you plan to drive the car, you’ll need to insure it. Many insurers will not insure salvage cars, and some require detailed inspections of cars purchased at auction. Look into your insurance options before purchasing an auction vehicle, since insuring can drive up the price and drive down the value of the car.

What Are the Specific Terms of the Sales Contract?

Sales contracts might seem boring, but they are a must read when you buy a car at an auction. Don’t blindly trust what a dealer says about his warranty. Defer to the sales contract for every detail about the purchase. Pay special attention to any information outlined about the title.

Is It Possible the Car is a Scam?

It’s not exactly an exciting prospect, but you must consider that each and every car available for sale on an auction site could be a scam. Some sellers try to wash the title of salvage cars to drive up the value. A few even sell stolen cars or roll back the odometer to make it appear that the car has less wear and tear. Don’t fall for these scams. Check out the seller’s reputation, and ask for references. Google the car, and ask for the VIN so you can run a vehicle history report. A car is a major purchase, so don’t let yourself get scammed.

What Consumer Protections Do I Have?

You don’t have to become an armchair lawyer to purchase a car at a dealer auction online. You should, however, know about your state’s consumer protection laws. Who oversees car sales? What rights do you have if you are scammed? How can you access vehicle records? Must insurers insure the car? These and other questions are vital to knowing if the car is a worthwhile investment or a potential money pit.

Consider also that the way you pay can affect your ability to get your money back if you are scammed. Use only certify pay-systems. PayPal and similar sites offer some buyer protectionsas do credit cards. Direct payment and checks, however, may mean a total loss if the car turns out to be a scam.

For What Purpose Am I Purchasing the Vehicle?

Know why you’re buying the car, and whether it will serve that purpose. If you plan to resell it, check state laws to determine if this is possible. If you want to drive it, ensure you have a good mechanic on hand. And if you’re purchasing it for parts, ask about the specific parts you need. Otherwise, your purchase could be a total loss.