It seems that by the year, the costs associated with purchasing a vehicle keep on getting higher and higher. No doubt, car dealerships have had a rough go of it over recent years, and they’re all trying to make up for lost time with incredible markups. This is necessarily leading many to pursue alternative methods of purchasing a vehicle.
One method that’s attracted particular attention of late is online car auctions. Through websites that provide this service, it’s possible to save thousands when you purchase a vehicle. For this reason and several others, many auto buyers have begun using online car auctions with incredible regularity.
If you’re interested in using an auto auction online to purchase your next vehicle, you may wonder if financing is available. We’re going to answer that question and explain the whole process for buying a car in an online car auction below.
The Question of Financing and Online Car Auctions
Online car auctions are no different than any other auction you might use. For this reason, it is not possible to secure financing for a vehicle that you might purchase. When you use an online auto auction to buy a vehicle, you must be prepared to make a cash payment, usually through a cashier’s check or perhaps another method if you’ve established a relationship with the website.
Is Financing Really Necessary?
The realization that one is not able to get financing when buying a vehicle in an online car auction may ward some off of going this route. However, it really shouldn’t. That’s because it’s possible to find a car that would fit within the means of almost any budget.
For example, online car auctions provide consumers with access to salvage cars. These vehicles can be purchased for literal pennies on the dollar. Now, many believe that these are vehicles that have been significantly damaged in a wreck. While this is true of some, there are other vehicles – like those recovered after a theft – that may be fully functional. The salvage designation still keeps the price of these vehicles quite low, though. Needless to say, this presents an incredible opportunity for an auto buyer who’s on a very limited budget.
How Payment in Online Car Auctions Works
To get started with an online car auction website, you merely need to create an account. When you want to start bidding, though, there’s an additional step you’ll need to undertake.
These websites require their users to make an initial deposit to establish buying power. Typically speaking, the size of this deposit will equal one-tenth of whatever one’s maximum bid can be. Upon a successful bid, this deposit will be applied toward the final purchase price and fees.
If the deposit covers the above, then you’re all set. If not, you will typically have a week’s time to complete final payment on your vehicle. It’s important to make this payment as promptly as possible, as late fees can apply. If the payment remains delinquent beyond a week, the deposit may be forfeited.