Buying cars from auctions such as Auto Auction Mall can be a lengthy and confusing process. Especially, if you don’t understand the terms used. It is advisable to try to understand as much as you can about auto auctions. Also, about the terms used, to avoid mistakes or wrong purchases. These terminologies are not technical and are easy to understand.
For the average individual, it is advisable to have some form of knowledge about car auctions. Additionally, about the terms used at the different stages of bidding and buying a car. At the very least, understand the basics. To assist with that, we have listed some common terms below as a kind of crash course.
Pre-bids are merely referred to as bids placed on cars by prospective buyers before the car is auctioned live. It is not advised however as pre-bidding raises the starting bid on a car and this by extension raises the final bid making it more expensive in the long run.
Buy Now Prices:
This term refers to the set amount which the auction houses are willing to sell the vehicles for. The offer is usually valid until one hour before the auction begins. The buy now option has become one of the best ways to buy vehicles on AAM. You can buy the car of your choice clicking this option. Without competing to get it during the live auction.
Reserve Auction Price:
This happens when a seller sets a reserve price on the car. He does this in hopes that there’d be a buyer who’d want the car badly enough to meet that price or get close to it. In cases where the auction ends without anyone meeting the reserve price, the seller offers a counteroffer close to his reserved price. The buyer, on the other hand, has the right to reject the offer and stick to their high bid amount. At this point, the seller can either sell on approval or enter the vehicle for another auction and since it’ll cost the seller more to re-list for another auction, they just sell on approval or offer a counter price that’s fair enough.
This is the price at which a vehicle on auction is sold for.. Simply put, the winning bid is the price that takes the car home.
The Documentation fee in an auto auction is the monetary value received for the processing of the vehicle paperwork. At Auto Auction Mall, the fee is-NGN30, 600 or US$85 depending on exchange rate.
The security deposit is the amount of money paid to the auction house to ensure that you the buyer will see the auction through and if not, covers the cost of any penalties that may occur as a result of the buyer’s default. This amount is refundable and is usually a tenth of the car value or a minimum of $400 (NGN 145, 000); With this deposit, you are given buying power to make an offer on a car or bid on a car of your choice. The minimum amount that can be paid as a security deposit is US$400 for a buying power of up to US$4000. However in cases where the value of the car you want to purchase is, for example, US$6000, then the minimum you’ll have to deposit is US$600.
One-Time Auto Auction Fee:
Unlike most auctions online, Auto Auction Mall doesn’t charge subscription premiums or access fees. All you pay is a flat fee of $299 ( NGN107, 650) and this amount is payable only when you make a purchase.
Domestic Shipping or Trucking:
Domestic shipping is moving the vehicle from the car lot where the car is located to the nearest port for outward shipping.
Otherwise known as ocean freight, this method of shipping involves transporting autos in containers or via RORO – Roll on, Roll off from a port of origin to the buyer’s home port or destination.
This is the term used to describe a method of shipping. This is where the cars are driven onto the ship and not in containers. This method of shipping is usually for cars that can move on their own without any significant damage. It is the cheapest way to ship purchase cars from for example the origin port in New York to the buyer’s home port. Local clearing is also usually relatively faster than the container shipping approach.
To containerize means to package vehicles into standard containers to enable efficient shipping and proper handling. When it comes to autos, 40-foot containers are usually used to transport up to 4 vehicles per container. This approach is more expensive than RORO but is usually safer and you can also consolidate shipping by including more items you purchased in the car you are shipping in. The downside to this is clearance is usually a lengthy process and the possibilities of incurring demurrage if the owners of the other cars in the container are not ready to clear theirs yet.