Buying a new car is something that not everyone can afford or may prefer. It’s because you can save a great deal while purchasing a car at auction. Moreover, the rate of depreciation on second-hand vehicles is very high, which makes buying a car at an auction a practical and wise option.
However, there are many things you need to take into account while buying a vehicle at an auction or while purchasing a used car. Having some prior knowledge can help you start well with the auto auction and end up having a lucrative decision.
So, read this post to explore the basics of getting a bargain while buying a vehicle at a car auction.
Research the Value of Car
You might end up paying a higher price if you bid for a vehicle without knowing its actual market price, especially if there is high interest in a car. Auctions are competitive and you may end up offering more for a vehicle due to its popularity among bidders.
Hence, we suggest doing some research to let you figure out the value of the bid, based on the vehicle’s mileage and specifications.
Conduct PPSR/VIN Check
One important thing that must be mentioned on a buyer’s checklist is the VIN verification. VIN or the vehicle’s chassis number is an important number that must be listed on the paper.
All licensed auto auctions and motor vehicle dealers must offer the buyer the latest PPSR certificate, also known as the REVS certificate. This certification will show if the vehicle has been involved in a major accident, or has been damaged by flood or a natural calamity.
Just like auctions, licensed car dealers must cover you for finance encumbrance from the past owner. It means that if the vehicle has been purchased on finance or loan by the previous owner, you will be safe and will not be at risk of the car being repossessed from you after the sale.
Inspect the Car Beyond the Surface
As you cannot test-drive the vehicles before bidding for it, you have to view the vehicle’s mechanical report before bidding on it. Perform a detailed interior, exterior, and mechanical check when inspecting vehicles at auction.
Don’t be mesmerized by the fresh paintwork and shiny new wheels as this way you may ignore the most vital features of a car. Check rips on the interior, or cracks in the dashboard, the bonnet, and other aspects, as they may cost you hefty bucks to repair.
For example, in older cars when the top paint starts to fade, this is a sign of hefty sun damage in the years to come. Plastic bumpers and mirrors do fade from metal panels because of the material it is made of. This is common with cars more than five years old.
Furthermore, if you are buying a car at an auction, you will notice stone chips on the bonnet, especially on long-distance driven cars, or scratches around the bumpers. Do notice cosmetic defects like a weathered paint or dent to stop bidding on a car, which is otherwise mechanically sound. If you don’t have sound technical or mechanical knowledge, you may consider bringing an expert friend who can inspect the vehicle for you.
Consider Auction Fees
Every auction has its own cost and rules. You must double-check before bidding on the car. Usually, there is a ‘buyer fee’ that can range anywhere from $100 to $1000, or 5% of the purchase price that is usually for government or consignment vehicles.
Some charitable auctions may charge no buyers fees or those that are bidding low-end stock of cars under $1000.
Establish a Budget
Many buyers end up getting caught up in a bidding frenzy. You must decide in advance the amount you are willing to spend on a car. You must allocate some money to auction fees, registration fees, transfer expenses, insurance costs, and repairs, if any. A budget lets you narrow down the cars at the auction that are within your range and lets you focus on inspecting them.
Understand the ‘As-is’ Clause
According to the ‘As-is’ clause, you agree to purchase the car in the state it is in, without any repairs. Hence, pay attention to the auction lights – red, blue, green, and yellow as each light indicates something, such as:
Red light – Sold ‘as is.’Green light – It means the auctioneer will announce a problem with the car. When the yellow light is on, hear the announcement ahead of bidding. Yellow light – It means there is an issue with the vehicle and the auctioneer is going to announce the same.Blue light – It implies that the title is yet to occur at the auction. If you win the bid, your check won’t process till the auction receives the title.Check the Roadworthy and RegO Certificate
A lot of cars at auction are already unregistered or being sold unregistered depending on the auction rules. As a private buyer, you must check the company policies to see if the cars are sold registered with a road-worthy certificate before bidding begins.
If the auction car holds a valid roadworthy certificate, even if it is presently out of registration, you still need the road tax and insurance paid certificate. It will ensure you don’t spend unwanted additional money on mechanical costs to make the car roadworthy.
A car auction may not be a common style of purchasing and may require you to put in more effort, but if you do everything mentioned above, you can save yourself a lot of effort and time. If you wish to purchase a donated car from an auction or looking for a reliable car donation company, choose a reliable platform. They can provide you with the best chance of finding a deal you are unable to find anywhere else.
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