Car auctions have been gaining in popularity over the recent years. So it’s no wonder more and more private buyers are asking the same question. How do car auctions work? To start with, there are initially two types of auctions: public and closed auctions.
Public auctions are open to anyone and there you can find cars ranging from old beaten up heaps of metal to new vehicles. Overall, the quality of these cars can be poor, which is why it is advisable to have someone with you who can inspect the car and who knows what they are looking at. Public auctions are often used by private sellers, auction companies, dealers, even the law enforcement to dispose of their vehicles.
Dealer auctions are a bit different. Only those who have a dealer’s license can attend these auctions. This is where either new or almost new cars are sold. There are ways for private buyers to attend dealer auctions as well, but that is a completely different topic.
How do Car Auctions Work?
So how do they work? You can either attend in person or online. Cars are listed with a starting price. If you are interested in a car, after inspecting it, you can set your maximum bid and once the car hits the floor and comes up at auction you start bidding. You must know that there can always be more potential bidders on any given car so expect multiple bid and for the starting price to go up. But as long as you stick to your maximum budget, you should not have issues with overspending. If you don’t buy that exact vehicle, another one may come across soon enough.
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Attending auctions in person can be a bit hectic and overwhelming for a first time buyer, so online auctions are maybe a better choice. In addition, online auctions allow you to set your search parameters to only show you the cars you are interested in. You can also set the maximum budget and the bidding can go on pretty much without you.
If you have placed the winning bid, the car is yours. However, there are certain auction fees to look out for, but this can always be researched and asked for beforehand so you can include it in your budget. The rules for auctions are pretty straightforward. You find a car you like, you research, set your maximum bid, you bid and you buy. And yes, auctions are where your local dealers buy their inventory, which means that the prices at auctions are way below that.