There’s a trend that’s sweeping the auto-buying world of late. More and more consumers are now turning to auctions in order to buy used and salvage cars. There’s one big reason for this: savings. In many cases, consumers have found that there able to save thousands of dollars when they buy used and salvage cars in dealer auctions.
If you’ve heard about this trend, then you likely want to see what all the fuss is about for yourself. If so, then it’s important to understand that buying a car at auction is much different than buying through a dealership. There are some things that you’ll want to know, which we’ll be reviewing below…
Dealer Auctions and Online Car Auctions
Dealer auctions take place in every state pretty much every day. In fact, you could probably find a listing for one or several if you were to scan your local newspaper. However, before you circle one and make a plan to attend, there’s something important you need to know.
By and large, in-person dealer auctions are closed to the general public. This is because they only allow licensed dealers to participate in the bidding. Still, this doesn’t mean you’re cut out from used car auctions entirely!
That’s because there are now online car auctions that are open to the public. Essentially, these websites list vehicles on their site from certain dealer-only auction houses so that you get access to this inventory at great prices. Because of this, it’s possible for you to have a selection of tens of thousands of used and salvage cars at your fingertips.
The Difference Between Salvage and Used
Newcomers to online car auctions will often be confused about the difference between used cars and salvage cars. Used cars are, of course, what you’d expect. They can come from a wide variety of sources, including but not limited to dealerships, police impound lots, governmental entities and others.
Salvage cars are distinct from used cars due to their salvage titles. These titles are issued when an insurer pays out a vehicle’s policy at 75% or greater of the vehicle’s value. This can happen due to damage sustained in an accident or for other reasons. Because of this, salvage cars can and do run the gamut in terms of quality, from severely damaged to just like any other used car you might consider.
No Financing and All Sales Are Final
Many are accustomed to using financing when purchasing a vehicle. This is something you cannot do when you use an online dealer auction to purchase a used or salvage car. You must pay cash upon winning a bid.
Further, there are no givebacks when it comes to auto auctions. When you’ve won a car, it’s yours, warts and all. Because of this, it’s important to be as thorough as possible in your research on the cars on which you might wish to bid. When possible, request a vehicle history report for any car on which you’re going to bid. And when you might be paying a significant sum, consider having a professional conduct an in-person inspection.