You may have been contemplating buying a car from an online auction, but you are unsure if it is the right choice. To help you make a decision, we are now going to look at the best reasons to choose to buy from an auction, as well as some of the factors you need to consider to this option worth your time and money.
Do Not Go Over Your Budget
One of the most important things that you need to consider when you are buying from online car auctions is your budget. Before you even start looking for vehicles, you have to consider how much you have available to spend.
A mistake that many people make is to only consider the cost of the vehicle on which they are bidding. However, there are other expenses associated with purchasing the vehicle, such as the fees that the auction house will charge, and the fees charged by third party dealers, if you decide to use them to make the auction buying process easier.
Remember than in an auction you will be bidding against other buyers. Some of them might be private buyers like you, but others might be dealers. Do not get caught up in the emotion of bidding at auction and lose sight of how high the bids are rising. You need to know at which point you have to stop. Otherwise, you can end up spending more than you can afford.
Understand the Vehicle’s Condition
Online car auctions can offer a number of different types of vehicles. In some cases, you may find new or nearly new vehicles. Often, you will find older vehicles that are still in good condition. However, many of the vehicles you find at online auctions have salvage titles.
These types of titles often indicate that the insurance company found that the repairs would cost more than the value of the car. In some cases, these are cars that were stolen and only recovered after they were written off by the insurance company, or were repossessed.
You should always check what the actual condition of the vehicle is before you buy it. This will help you understand the type of repairs the vehicle might need before you are able to register and drive it. This should be factored into your budget. You should consider whether the potential repairs will push you over your budget.
Know the Value of the Vehicle
You also need to know the value of the vehicle you are buying. This will help you assess if the vehicle is good value for money, as well as help determine what your maximum bid at the auction will be. Kelley Blue Book and edmunds.com are valuable resources to find out the value of a vehicle.
In the case of a salvage title, the value of the vehicle will be less than what you find in these resources. A bid that is close to the value of a vehicle of the same make and model, in fair condition and with a regular title, will be too high for what the salvage car is worth.
Consider the Shipping Costs
You should not forget that you are buying your car at an online auction, you may not be buying in your local area. This means you will have to find a way of shipping the vehicle. Shipping costs should also be included in your budget.
Shipping costs will vary based on the company you choose, as well as where you the car will be shipped. Contact several companies to get some estimates on the price, as well as information on how long it will take for the vehicle to arrive.
Also, make sure the companies have enough insurance to cover the value of your vehicle. If the car needs to be shipped overseas, you may need to hire a company that can ship terrestrially (from the auction site to the port) as well as across the ocean. If possible, use the same company for shipping on land and overseas, as this is usually cheaper.
Learn the Title and Registration Rules in Your Area Before Buying
Different countries and states have different laws and regulations for getting a salvage vehicle rebuilt and ready for the road. Before buying salvage cars from online auctions, you should check the local rules so as to ensure you will be able to meet the requirements to license and insure the car.
Moreover, you should contact insurance companies before you buy a salvage vehicle through an auction. You can’t get insurance on a salvage vehicle, but you can get liability insurance for a vehicle that has been rebuilt. Fewer companies will provide higher levels of coverage. Be sure to do your research before you buy so you know what coverage options are available for your vehicle.
Buying from car auctions online has a lot of potential; you can find some great vehicles, some ready to drive, others needing more work. There is the potential to save a lot of money by buying a car this way, so long as you stay mindful of the limitations, especially your budget.