There are many ways to get a good deal on used motors, but one is virtually guaranteed…
Get yourself to a car auction and drive away a staggering deal at UP TO 60% BELOW high street prices
How to make a killing by buying heavily discounted cars, vans, motorbikes and vehicles at auction …
CARS AT AUCTION
Money to be Made
Auctions are without a doubt one of one of the very best places to buy second-hand motor vehicles. Part of the reason for this is that you cut out the middle man – the retailer or dealer – and avoid having to pay for their services. Many of the used car that you see for sale in garages and in dealers’ showrooms have been bought at auction. Car auctions are therefore the equivalent of a used car dealer’s ‘wholesale’ stockists. In other words, by choosing to buy from an auction, you eradicate the need for a dealer and keep for yourself the profit that the dealer would have made.
Car auctions have earned a not totally undeserved shady reputation over the years, seen as the dodgy yard under the arches where unscrupulous dealers offloaded the knackers they can’t sell elsewhere. But the good news is that these days the auctioning of cars has become a multi-billion pound business. You’ll be amazed at the facilities and scale of the car auction operations these days. You’ll find car auction lots of major companies who choose to buy and sell their cars through the auction system; many of them exclusively.
By attending car auctions you get access to a unique range of vehicles:
- Direct from the manufacturer
- Later model vehicles
- Cars available from ex-fleet, finance and lease companies
- Part-exchange motors from dealers
- Budget and family models including MPVs
- Specialist marques, Top Car and other prestige motor auctions
- Plant and Machinery
- Cars and Caravans
If you take the time and trouble to learn how car auctions operate you will also be able to make good purchases as well as learn which items should be steered clear of. You may even decide, having learned all about auctions and having visited them and even bought cars for your own use, to turn your hand to car dealing itself, whether that be on a part-time or a full-time basis. There are some tremendous profits to be made and it can also be an entertaining way to make a living.
Car auctions are certainly not the place to be if you do not know what you are doing. They can be fast, furious and you will have little time to examine a car fully. They are full of traders, most of whom are experienced in the business of assessing the quality of cars quickly and accurately. However, you too should be able to do this in a very short time and will pick up the necessary skills relatively easily.
Perhaps the first thing to learn about car auctions is that at almost every auction there are a great number and variety of cars offered for sale and usually only a handful will suit your particular needs. Your job is to become so knowledgeable about the pros and cons of used cars, that you will be able to judge which cars are worth a closer look and worth bidding for, and those which my be ignored.
If you find that there is nothing available at the auction which is worth a bid, walk away without giving it a second thought. Never go to an auction with a pocketful of cash and expect to drive a car away at the end of the day. If you go to an auction in this frame of mind you may fool yourself into bidding for something that you don’t really want, or you might pay more for a car than it is reasonably worth.
As previously stated, most of the ‘old school’ auctioneers have pretty much gone out of business. If you follow the gauk car auction guide you’ll discover that there’s no longer such thing as a bad auction, only bad buyers. Generally, you are quite safe with the large auction companies such as Merlin, British Car Auctions, Manheim etc (Those listed at gauk Motors) however, the waste-ground set ups are to be avoided.
Look for affiliation to the Society of Motor Auctions (SMA) – a plaque bearing their crest should be displayed on the wall somewhere. Membership of the SMA is the nearest you will ever get at motor auctions to a guarantee of fair play and honesty.
Before going any further when you reach an auction the first thing you should do is check in the conditions of sale to see what the auction house guarantees. For example, if you buy a car and it turns out to be a stolen vehicle or still under a higher purchase agreement, will you get your money back without any problems. If you are in any doubt you can contact the Society of Motor Auctions (SMA), (or equivalent for your country)
At the Auction
At the motor auction there are usually two distinct areas.
There is the pound where cars can be viewed and inspected and an arena, or ring, where you will find the auctioneer and where the bidding and buying takes place. In the vast majority of cases a car will have a lot number on it and this indicates when it is due to go out from the pound and into the ring.
In addition, cars may have tickets on the windscreen which tell you some facts and figures about the car, for example, whether it has an MOT, and how long it lasts, what the car’s mileage is and whether it is genuine, the year of manufacture and, crucially, whether it has been used as a taxi, public service vehicle, etc.
The amount of information displayed and the reliability of that information depends entirely on the respectability of the auction house – that is why it is essential to pick a good one, preferably one that is a member of the SMA. A general rule of thumb is that the more information that is given, the more credible the auction is likely to be. You may also be able to pick up further information from a sheet of photocopied paper or catalogue at the office. In many auctions, it is even necessary to buy the catalogue to gain entrance.
There are two categories of vehicle sold at auction:
- Those that are sold as seen
- and those that are sold with warranty.
As seen, basically means that you buy the car with all its faults and problems and have no recourse whatsoever, even if it blows up on the journey home. Many auctions will not give warranties to any car over a certain age. In this case, you will not know whether it has any serious problems or not. It is a real gamble to buy a car as seen at auctions and in the vast majority of cases the odds are stacked heavily against you.
Buying a car with warranty means that you only have a limited amount of time after the sale to drive it around and inspect it thoroughly. Usually, this amount of time is limited to one hour. However, check what after the sale means, as it could mean after the fall of the hammer, after the auction ends, or after you have paid your money and bought the car. It varies from auction house to auction house.
Buying a car with a warranty is almost as good as buying a car privately, and you have probably paid much less money for it. If you find a “major” mechanical fault, then you can take the car back and get your money returned. Again, what constitutes the definition of “major” varies from auction to auction, but you must always argue if you think you have a case. It is unlikely to mean, for example, that you are entitled to a full refund if the windscreen wipers don’t work properly or it some of the lights are broken.
They are relatively cheap to fix. It also won’t apply if you find that you don’t like the car having bought it.
Cars generally go into auctions at two levels. Those which have a reserve price and those which are sold with no reserve. Basically, if a car has no reserve price then the highest bidder buys the car on the fall of the hammer, irrespective of whether, from the seller’s perspective, it fetches a good price or a bad one.
While this may sound marvelous to an inexperienced buyer, particularly if they visited an auction on a cold day when hardly anyone turned up, normally no-reserve cars are at the lower end of the market, and in most cases you would be well off to avoid them altogether. If the car has a reserve price then you will usually not be told what it is. It is the auctioneer’s and seller’s secret. It is the price below which the seller is not prepared to let the car go and may prefer to keep it or indeed sell it privately.
If bids go above the reserve price, then the car will be sold to the highest bidder. If bids do not reach reserve, one of two things can happen. Either the auctioneer stops trying to raise the bids and lets the car go back to the pound without selling it, where it may again be offered at the next auction in a few days’ time, or he will sell it “provisionally”.
A provisional sale means that the highest bidder has an opportunity to negotiate, via the telephone in the office with the seller to perhaps agree on a compromise price, somewhere between the bidder’s highest bid and the seller’s reserve price. This is a fairly common occurrence, because most people who offer their cars at auctions prefer to have a reserve price.
Obviously the seller wants to get as much money as possible for their vehicle and people all too often consider their car to be worth more than others are actually prepared to pay for it.
Car Auction Do’s and Don’ts
The most important thing NOT to do at an auction is to buy impulsively. Don’t fall in love with anything and think that this car or that would be fun to drive around in for a while, or you might talk yourself into buying an attractive wreck.
As was mentioned earlier, for every hundred cars offered for sale at an auction, there are only likely to be a handful that fit your criteria.
Don’t buy when you are desperate or time is limited. Plan well ahead. Travel comfortably to your car auction. Always look at cars from a negative point of view in that they are full of faults and that it is your job to find them.
When you are viewing the cars in the pound you may detect slight faults. That is to be expected with anything that has been used. It may just be a slight scratch, a bald tyre, a missing wing mirror or blown exhaust – it really doesn’t detract from the fact that it is still a good car and might go for a good price. It is wise therefore to take a notepad and pencil with you. Write down the lot number for the vehicle and jot down any notes on the car that you must take into consideration when you are judging how much to bid. Also, note any other facts and figures for your quick reference.
Cars and VAT
When making payment for a vehicle bought at auction it is advisable to be aware of the VAT situation. Remember that although VAT is not applicable on the sale of private cars through auction, commercial vans and other vehicles are subject to VAT. Check with the sales officer the VAT status of the vehicle you are interested in before you decide to bid on it. (This is not specific VAT or tax advice – check with the relevant office for the current situation)
Also, on top of the hammer price, you will have to pay a small charge for indemnity insurance. This is an extremely worthwhile fee that assures that you have “good title” to the car. This indemnity normally costs only small percentage of the hammer price.