F.A.Q
How do car auctions work?
What is the difference between open and closed auctions?
Where do the cars come from?
What is the difference between a government-run auction, police impound auction and a repo car auction?
How can I evaluate the vehicle I’m interested in purchasing?
Is this legal?
If this is such a great thing, why don’t more people use it?
Where are car auctions held?
Can I get the Carfax report for the vehicle I’m interested in?
Is there a warranty on the car I purchase?
What condition is the car I’m interested in?
What if I don’t find anything I want?
Will I have to pay any additional fees at the auction?
What if I have other questions not answered here?
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How do car auctions work?
It starts with the cars. If a car was purchased under a government contract, it is eligible to be auctioned by the purchasing agency. Other cars on the auction block come from police and bank seizures. Most are 2-3 years old and have less than 40,000 miles on the meter. After locating an auction house you are interested in investigating, you will be able to find out their upcoming auction dates. They will have a listing of vehicles, called a “run list,” for each date. Sometimes there are pre-sale inspections offered by the auction house. Arrive early the day of the auction, and you will be able to inspect the car you desire prior to bidding. Many times a Carfax report is available at this time as well. If this is your first time at a car auction, it is a good idea to watch, listen and learn before bidding. Once the bidding starts, it’s up to you. Having a set price in mind (usually not over Blue Book value) is a good idea. You will be required to give a partial payment in the form of cash, bank cheque, major credit card or similar on the day of the auction and return, usually within 48 hours, to complete the purchase. Each auction house has different rules regarding payment. Be sure to check with the one you are dealing with to comply with their regulations.
What is the difference between open and closed auctions?
An open auction is open to anyone who wishes to bid on a vehicle. A closed auction is only open to certain people, usually car dealers who will be purchasing vehicles for their used car lots.
Where do the cars come from?
Often Americans overestimate their ability to pay for a new car. Consequently, their cars are repossessed. Many times it costs the bank more money to store the car than to sell it, so they place it for auction. This is only one of the sources. Other cars come up for auction after they have been seized by police agencies. Most, however, come from government agencies that need to sell cars used by federal and state agencies, police and fire departments, religious or other non-profit organizations, universities and hospitals. Other sources of auction cars are dealer trade-ins, lease ends and donations. Many are only 2-3 years old and have traveled less than 40,000 miles.
What is the difference between a government-run auction, police impound auction and a repo car auction?
In government auctions, buyers pay no fees or registration charges. Other auctions run by private auction houses may have a 5 percent fee tacked on to the top of your bid. This is the auction house’s income. Other than that, the biggest difference between the types is the source of the vehicles. Government auctions receive vehicles from agencies such as Homeland Security, the FBI, IRS, DEA and Border Patrol to name just a few. State, county and local governments also regularly auction surplus property. Police impound auctions are just what the name indicates. The cars here have been seized by police agencies as the spoils of illegal activity. A repo car auction often is held by a bank or finance agency that has repossessed property that the consumer could not pay for.
How can I evaluate the vehicle I’m interested in purchasing?
Often auction houses will hold pre-sale inspections in which you can view cars up for auction. Each will be marked with the seller’s name, mileage, auction lot number and lane assignment. Arrive early the day of the auction, and you will be able to inspect the car you desire prior to bidding. Many times a Carfax report is available at this time as well. You would do well to obtain your own Carfax report by getting the VIN number during the pre-sale inspection. Some auction houses offer post-sale inspections by their own mechanics. Lastly, it is wise to take advantage of free arbitration services offered by auction houses to protect seller and buyer interests.
Is this legal?
Absolutely! Thousands of cars are forfeited to the government or banks every day and even more are sent to auction by governmental agencies. These are the vehicles you are bidding on. Often there are reserve prices, sometimes called the “low” or “floor” price. Vehicles may not be sold below this price set by the seller. This ensures that sellers get the minimum price they are asking for a car.
If this is such a great thing, why don’t more people use it?
It’s a secret. Dealers search these auctions all the time to bring vehicles onto their used car lots. They don’t want you to have access to the same auctions they do because then they can’t make money selling cars at inflated prices if you are purchasing from the same source they use. If there is a “catch,” to auto auctions, it is that bidding usually is fast paced. You have to understand the process and know what you’re willing to pay for the car you want. Don’t get caught up in the bidding frenzy.
Where are car auctions held?
There are several auction sites in every state. In most cases, anyone over age 18 with a valid picture ID can attend and participate. However, most people don’t know they exist. Auctions are held either monthly, quarterly or annually, depending on the auction house. Virtually any type of vehicle can be found.
Can I get the Carfax report for the vehicle I’m interested in?
Absolutely! Many auctions offer the Carfax report for the vehicle you are interested in, or you may obtain one on your own prior to the day of the auction by visiting the pre-sale inspection and obtaining the VIN number of the car you wish to bid on.
Is there a warranty on the car I purchase?
Typically there is a free 3 month warranty on the car offered by the auction venue. There are extended warranties that can be purchased also. These are similar to the extended warranties a car dealer offers.
What condition is the car I’m interested in?
Typically the cars are only 2-3 years old and have traveled less than 40,000 miles. However, be sure to thoroughly check out the individual vehicle you are purchasing to be sure it meets your standards. Obtain a Carfax report and attend the pre-sale inspection offered by the auction house.
What if I don’t find anything I want?
Think of how many local, state and federal agencies, police and fire departments, universities and hospitals exist in the U.S. There are cars listed by these agencies all day, every day. If you don’t find exactly what you’re looking for today, check the run list for the next date offered by the auction house.
Will I have to pay any additional fees at the auction?
Most auction houses attach an additional 5 percent “buyer’s premium” to your purchase price. This is the auction house’s income. However, this does not hold true for government-run auctions where there are no fees or registration costs. The standard tax, title and licensing fees apply.
What if I have other questions not answered here?
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