Buying used cars on its own can be a problem. Sometimes, due to the fact that there are no guarantees of the condition of the car you want to purchase. Regardless, Nigerians (myself included) due to the cost of brand new cars, have had to settle for used cars. Don’t get me wrong, it’s not just a problem in Nigeria. It happens pretty much everywhere across the world including the US.
So I wanted to buy my first car, and I was a complete novice. I had heard of online car auctions and also stories of people being duped of $4000 and more. For example, the agents would just vanish into thin air. Simply because you’re in Nigeria trying to buy a car that you can’t see in a place you’ve never been… Problem 1!
Of course, some friends advised me to just visit a local dealer here and buy. I also read up things like odometer fraud, selling flooded or accident-ed cars. However, I decided to take what I thought was a risk then. Plus, I was budget conscious and to be honest looking for a bargain.
Understanding Auto Auctions
At the time, it seemed like complex stuff to me, with the terminologies etc. With just a few hours with Google, I got to know that US used cars are your best bet. Also,that Copart, IAAI, Manheim and Adesa were the top 4 used car auctions in the US. This, if you’re looking to buy foreign used cars and with a little more research found out.
There is also a used car market in Nigeria called “Nigerian used”. But you’ll agree that if you have options and the funds you’re better off with “Tokunbo cars”.
The only thing I didn’t like about online auction system was the condition of buying “as is, where is”… This literally means that when you buy a car from online auctions (bidding or buy now offers), you agree to buy the car and whatever defects or faults it came with. Fine, they let you inspect the car if you’re over there or have someone to do it. But that wasn’t the case for me.
As a Nigerian, the thought of paying fully for a car you hadn’t seen or tested was a little upsetting. But I let the online reviews I read reassure me.
Choosing the Right Auction Platform
I signed up to Copart and IAAI because they seemed more popular, straightforward, and had great reviews. But found out that the cars I had access to as a free account were limited aka “Public auctions”. Problem 2!
www.IAAI.com
I read online somewhere that the remnants of Dealer, exporter, dismantler and other higher accounts were the vehicles that made up these public auctions. To gain access to these top level auctions, I needed to make deposits of up to $1000. Also, pay annual subscriptions of about $200 and have a dealer’s license. License aside, where was I going to get over 400k that I was not using just for deposit? This was not possible as I was trying to save.
Further Reading
- Everything You Need to Know about Buying Used Cars
- How You Can Get Your Next Car from a Dealers Auto Auction
So I went back to google and started discovering online auction brokers like Auto Auction Mall and Auction Export. They both seemed legit and had done a lot of business in Nigeria. What they do is that for a fee (usually less than $300) they allow you access some of the higher level auctions so you can get good deals and good cars to buy. They help with the bidding and shipping if you want.
Initially, I thought of Auction export but I decided to go with Auto Auction Mall because of a service they call “Phone support”. After calling them (Spoke with a Peter guy), they rerouted me to their representative in Nigeria here (Mr Femi), who was of immense help (Probably spent like 5k airtime on me and my questions…lol).
Choosing Auto Auction Mall was a no- brainer because they literally provided someone to hold my hand and guide me through a process I literally knew nothing about. From the inquiries, to the purchases to the shipping (big-ups!)… but I’ll get to that in a bit.
Selecting and Bidding For The Car
Signing up to Auto Auction Mall was easier and even before signing up, I could go through their huge online car inventory. To have what they termed “buying power”, ability to bid or purchase cars, I had to make a minimum refundable deposit of $400 or 10% of the value of the car I wanted to buy.
Although, I was told the deposit was refundable if I didn’t get the car I wanted, at the time, my scam alarm bells were ringing and I gave up for about two weeks. But I did some digging and saw good and not so good reviews about them on other third party sites. But none that said they took off with money.
Initially wanted to buy a 2006 BMW 750li but thanks to customs estimate that I was able to get from Femi (The Auto Auction Mall rep) I dumped it. He literally said “Customs are waiting for you oo”. So I eventually settled for the X5, made my deposit with my GTB Mastercard (Debit) on their website, was granted a buying power of $4000 after I sent a copy of my ID and account email and we scheduled the auction.
Further Reading
The car had a “Buy Now” price of $2500. What this means is that the auctioneer was willing to sell the car for that amount without an auction. More like cash and carry. Let me mention here that apparently, all cars listed on Auto Auction Mall eventually end up in live auctions. Some auctioneers in some cases may sell if the set price is met even before the auction date for that car and some won’t fix a “buy Now” price as a risk to try to see how much they can get on the car.
For the auction, you can choose to be a part of it or not, I chose to experience it and was linked to the Auto Auction Mall head office in US. I had the free help of the Auto Auction Mall auction specialist, Peter, who called me via Skype a few days to prepare me for the auction.
Fast forward auction day, I eventually won the auction for $1800. Lots of tension there too but I think I handled it well…lol
Payment and Shipping
So Auto Auction Mall has some strict payment terms, payment of the buying power deposit can only be done via card on their website. Payment for the car and their charges only by bank (wire) transfer and for this you will need a domiciliary account.
Within 24hours of winning the auction, I got the invoice for payment with bank instructions. The breakdown of the payment included the cost of the car, the auction charges. The $400 deposit I made earlier had been deducted from the total leaving me with the balance to pay. I had to pay immediately to meet up with the 2-3business days payment deadline so as not to incur extra $50 daily fine.
Before the bidding process, I had also discussed with their rep on shipping. I got to understand that Auto Auction Mall assists with shipping through their partners if a buyer opts for that. He also gave me the option of sorting out shipping myself and picking up the car at the lot but then why go through the headache of separate arrangements right?
Further Reading
- Your Guide to Buy Used Cars on an Online Auto Auction Site
- Used Ford Car for Sale: How to Choose the Right One
The shipping company they spoke with on my behalf was Prestige Shipping. After a few days, I got confirmation of a booking number and the vessel, Grande Benin (Grimaldi Shipping lines) that the car was assigned to. I called prestige directly a few times just to be sure this was legit and I wasn’t being scammed and their confirmations put me at ease. The car was booked for Roll on- Roll off (RORO) shipping since it was a “run and drive” car. I also got to understand that RORO is cheaper and clears faster if you’re buying just one car.
There were some slight issues with the US customs due to paper work that wasn’t properly signed, but this was resolved and after about 3 weeks, I got a confirmation after following up with Peter, that the car had been loaded.
The payment for shipping was paid to the Shipping companies bank account through bank/wire transfer and according to their Nigerian rep, Auto Auction Mall didn’t take any commissions off the shipping. The great thing is that receiving a shipping payment invoice also acts as a confirmation of sorts that your car is on the ship and on its way to you and then the wait started.
Before I forget, after payment, the original titles, and documents including the bill of lading will be sent via DHL or FedEx for customs clearing. I got mine 4 days after payment.
Arrival and Clearing
After roughly 3 weeks, Grande Benin finally arrived Lagos. The Auto Auction Mall had earlier connected me with an agent who I met and gave a copy of the bill of lading to fast track clearance. After 4 – 5 days and N550,000 later, I picked up my 2005 BMW X5!
Things to Note:
– There were some additional charges like $25 for offshore transfer charges I had to pay when paying for both shipping and the car
– Try to get your dollars on time from your Aboki to avoid fluctuations in forex
– It is a lengthy process. Took about 8 weeks (due to the customs delay), was told it’s usually about 6 weeks. So patience is key! On the good side, you’re getting an awesome deal
Conclusion
I definitely will recommend Auto Auction Mall if you’re considering buying a US used car via auto auctions. Having a Nigerian rep to guide me through the process eased a lot of fears and worries and helped me to understand the process.
I’m already saving to get my wife, her own car too!
Comments