As a first-time buyer at a car auction, you may sometimes feel like a fish out of water… it is totally fine to feel this way as most people felt the same way on their first day too.
For you to land great deals in an auction and not end up with overpriced lemons you need to be knowledgeable about what goes on during the auction.
If you are on a budget, an online used car auction is the best place to get your hands on your dream car without breaking your bank. You have access to a wide range of vehicles you may never look at twice in a dealership because of the price. And you can afford it because auctioned vehicles are much lower in price than brand new vehicles.
Bet you want to dive right into placing your first bid… Slow down…
Though the thought of getting your dream car at a fraction of the price in an auction seems exciting, you need to understand how auctions work to land great deals and avoid costly pitfalls.
The downside of online auctions is that all kinds of vehicles are sold – sometimes, even lemons. The condition of these vehicles is not certain. Even when you run a VIN check, you can never be 100% sure of the condition of the vehicle.
As a first-time buyer, these are key things you should know or do to avoid ending up with lemons…
1. Understand the Auction, Terms of Sale, etc (Do your Research)
Your first level of research is to read through the information on the website of the online auction you want to attend.
Proper research helps you avoid ending up with an overpriced lemon on your hand.
Get all the necessary information about the vehicle you want to buy. The make, model, year, mileage, damage history, maintenance, etc. A vehicle history report is an important tool to get all the information you need – and is crucial in your decision-making process. You can get your vehicle history report from sites like Carfax and Autocheck.
During your research look up customer reports and reviews about their experiences with similar vehicles, their pricing, fuel economy, and performance. This will help you avoid surprises and give you an idea of the budget to plan accordingly.
Edmunds and Kelly Blue Book provide you with information about the price of the car you want to purchase. They also provide information on reviews, pricing, car value, etc. These websites are also helpful in your research.
2. Define Your Budget and Bid Cap
It is important to determine your budget and bid cap before attending the auction to avoid overbidding.
Create a budget range in mind and stick to it! You can allow for flexibility where necessary – only if it is a good buy.
When creating your budget, allow room for repair and maintenance costs.
You may ask, WHY?
These are used vehicles that may have underlying issues that may have been missed. It is always advisable to have your car visit the mechanic before jumping behind the wheels.
When planning your budget, it is important to note that transportation can increase the cost of the car. You may find a great deal but the location may cost you more to transport to your location. This should be considered when budgeting.
Edmunds and Kelly Blue Book are great sites that provide information about the price of the car you want to purchase. They also provide information on reviews, pricing, car value, etc. These websites are also helpful in your research and setting your bid cap.
3. Understand Payment Terms and Options
You need to set up a payment plan to finance your purchase.
Once your bid wins, you have to make full payment or risk losing your car and deposit. Plan ahead when making your budget. When drawing your budget, include fees for registration, documentation, shipping, deposits, and full payment for the car.
If you are applying for a loan to cover your purchase, make sure the money is available before the auction to avoid penalties.
If all payments are not made on time, which is usually 2 business days, your vehicle starts incurring storage and late payment fees. After 7 business days, your car will be relisted and you pay the fees. Usually, your deposit goes into clearing all fees – you lose your car and your deposit.
You need to have a financing plan before walking into a used car auction to avoid any losses.
- 5 Sites you Need to Check Before Buying a Used Car
- What Should I Check For When Buying a Car
- Everything You Need to Know about Buying Used Cars
- How to Get the Best Vehicle History Report on Auction Cars for Sale
4. Manage your Expectations and Bids
Car auctions tend to be fast-paced which leaves a lot of first-time buyers overwhelmed, feeling rushed or pressured, to overbid. In the heat of the moment, the excitement may cloud your judgment and you overbid.
Make a budget and stick to it! This cannot be overemphasized
Do not be pressured into going over your budget – it is better to work away than have an overpriced vehicle in your hand which you didn’t budget for.
Note, there are a thousand more of the same car you really want to purchase, instead of going over your budget, walk away and attend the next auction.
The location of the vehicle also has a great impact on the pricing. If you are purchasing for export, The Closer to the Port, the Cheaper to Export… This is important because you will have to pay fees on trucking costs to the port which may sometimes be more than $1,000. You also may also have the challenge of finding a truck driver who is willing to truck your car to the nearest seaport.
The vehicle title is another important factor to consider before making your purchase – especially if for export. Some titles are exportable, while some aren’t. Run a VIN check to know what title the vehicle you want to purchase has. To know more about titles, check the links below
Our learning center is full of resources to help you become an expert in buying used cars from an auction.
If you are wondering how to make your first purchase, Auto Auction Mall is your best bet. We offer you an inventory of over 150k vehicles which are updated daily. And the best part of this is that you can sign up and begin bidding – no license required.
You can attend the live auction from the comfort of your home and office – hassle-free! We have auction specialists who are always ready to help you get started.
You don’t have to worry if you haven’t figured out your budget yet – we’ve got you covered!
Let us do the work for you, while you sit back and enjoy the process…
To get started, Sign up here!