Car Auctions
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Why Are Cars Auctioned? Are Auction Cars Worth the Risk?

By Femi Amisu Updated: 07/26/2022 Posted: 11/28/2018

Car auctions have become a very popular way for individuals to purchase their dream cars and for dealers to maximize profits.  Car auctions provide buyers with an affordable means to buy their vehicles without breaking the bank. On the other hand, they have also become a convenient way for insurance houses and used car dealerships to recoup money lost. So, why are cars auctioned?


So Why Are Cars Auctioned?

There is a variety of reasons why cars end up at auction houses. Some of them are:

  • Some cars have stayed too long at the dealer’s lot, so they are auctioned off as an alternative option to recoup some of the money invested.
  • The original owners cannot meet up with their payments, so they’re repossessed and auctioned off by financial institutions to recover their money.
  • Some cars get to the auction house because they are being traded for a new one. In this case, private car owners exchange their old cars to get another car in return.
  • Some cars have suffered damage from weather conditions or accidents. After paying off the owners, the insurance companies want to recoup some of what they paid out. Due to the damage history, these cars can only be sold at specialized auctions. The damages could include scratches, dents, or malfunctions as a result of thickened car fluids caused by winter.

To be able to fully benefit from and leverage car auctions, you need to know as much as you can about the different kinds of auctions out there.


Types of Auctions

  • Closed or Private Auctions

These auctions are called private because they are usually accessible only by licensed car dealers and not by the public. This is the type of auto auction were some of your local car dealers come to buy the cars they sell.


  • Public Auction

These are popular and happen frequently. These auctions are usually organized by insurance companies and car auction houses. The idea behind the auction is to sell used cars that may have been repossessed, just used with little or no issues, rebuilt from damage, or used by insurance companies to recoup the money.


  • Government Auctions

These auto auctions are organized by the US customs service or some other government body. They are organized to sell off old or excess vehicles including cars, trucks, bikes and so on that may have been impounded or seized. In some cases, like police auctions and government agencies, they sell them off to dispose of their old cars when they replace or overhaul their fleet of vehicles.


  • Online Auctions

This kind of auto auction is now very popular as it is one of the most convenient ways to buy a car without the need to be present or even be in the country where the car is located. At online auctions, most used cars are put up for sale, and prospective buyers register on their sites to join the auction. They rely on the information granted by the site to choose a car to buy.  

Online auto auctions have become so popular that there is now a large number of websites where you can join an auction.



Going through multiple auction sites can be a strenuous affair and, in the worst-case scenario, you might miss out on a deal. But Auto Auction Mall’s partnership with the dominant auction houses in the U.S, like Copart, Adesa, and IAAI, has allowed us to build the largest online marketplace where you can access significant dealer-only and private auctions from one single platform.


Pros and Cons of Online Auto Auction

Ever since the inception of online auto auctions, there have been some advantages and disadvantages to their use. While you’re thinking of joining the queue of online bidders, you should know the pros and cons of what you’re getting into.


  1. Vehicles sold at online auto auctions are very cheap compared to those you can buy from dealers. This makes it easier for buyers on a tight budget to purchase the vehicles they need. 
  2. You can get vehicles in a variety of conditions, including cars that are almost as new, very safe, and perfectly functional.
  3. You will find vehicles of any brand. The most exotic brands of cars that should be expensive are sold at very affordable prices. 
  4. If you’re a collector of vintage cars, then you would love online auctions because vintage collectibles can be quite affordable.
  5. Most of the vehicles sold at auctions usually have wear and tear from regular use. In some cases, small scratches and dents. The exception to this is salvage vehicles, which may display a larger degree of damage.



  1. Auction houses provide no guarantees on the vehicles or information provided as cars are sold “as is.”
  2. All bids and offers are final and binding. This means if you win a bid or an offer is accepted, you must complete the purchase or face penalties.


What are the next steps?

If all the above fits, it’s time to get into these auctions and start processing your next car purchase.

First, you need to know where to look. It is essential to know that most auction cars at public auctions are used vehicles. These can be in near new conditions with some thousand(s) miles on them. If you want a new vehicle, you’re better off going to a car dealer.



The second step is to find an online vehicle auction platform that is not pricey.  One that has hands-on customer support and telephone assistance. That allows you to participate in dealer-only auctions and has a variety of vehicle options to choose from. You can visit Auto Auction Mall to register and go through the inventory to make a choice.


The third step is to contact a representative of the platform. You can make further inquiries, or get some buying power to enable you to bid or buy. Scheduling an auction for the car you chose is also possible. 


If you need help or assistance with questions, please feel free to message or call 08025307997 (Nigeria).