How to buy a car at auction?

24 Jun 2022

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Buying a car at auction can be a great way to get a new set of wheels at a competitive price, but before you stick your hand up, you need to be aware of the risks involved.

Car auctions typically are held in a warehouse, where various makes and models are auctioned off. However not all will allow you to take the car for a test drive.

What to know

Car auction houses

There are two main auction houses for in-person used vehicle auctions:

  • Pickles: Pickles is located Australia wide, with 16 listed as holding vehicles. Pickles is in all capital cities, as well as regional centres such as Wagga Wagga and Townsville.

  • Manheim: Manheim is located in all capital cities, as well as Newcastle and Townsville. On its website, you can look for cars available, as well as upcoming auctions. Many auctions are also simulcast online, so if you can’t make it in-person, you can still see all the action.

Many car auction sites also host online auctions. Users are usually able to join a live stream of the auction and even place bids. Popular online car auction sites include:

  • Grays Online

  • Lloyds Auctions

  • Pickles

  • Bids Online

Registration

Before you attend a car auction, you will need to find out where and when the auction is taking place and register as an attendee.

For Pickles and Manheim auctions, you also will have to pay a deposit on the day if you purchase a car.

Deposits are usually between $500-$1,000 to secure your purchase. You can then get a car loan or purchase the vehicle via bank transfer or cash.

Inspections

When attending a car auction, you can inspect the vehicle and bring a mechanic along to inspect the car. However you may not be able to take the car for a test drive prior to the auction. This is where the inherent risk comes in - as you won’t be able to drive the car until you have completed the purchase.

Types of cars

Car auctions may be selling off used cars such as ex-police or government vehicles or damaged cars. Cars will need a road-worthy certificate (also called a safety certificate in some states) but a road-worthy doesn’t tell the whole story.

Types of cars for sale may include:

  • ex-police car

  • fleet car

  • officer's car

  • damaged cars

Returns

Be aware that car auctions usually mean you can’t return the car. That risk can be priced into the sale price, as you might be able to get a great deal as many won’t want to take that risk. However it also means that when you drive off, that car, and any mechanical issues, are yours to deal with. Make sure you check the service history and safety certificate before buying.

Tips for buying a car at auction

If you are looking to buy a used car, and are considering buying at an auction, here is a few tips before you buy.

Research

Make sure you have read extensively so you know the make, model and year you are hoping to buy. Filtering your choice by researching will help you go into an auction with a price point you are comfortable paying.

Once you decide on the type of car, research the value of that car and stick to it when attending auctions.

If you are considering buying a damaged car and repairing it, make sure you know the cost of these repairs before you buy.

Bring a mechanic to inspect

When attending an in-person auction, bring along a trusted expert to inspect the car, especially if you aren’t familiar with cars yourself.

There are services that provide mechanics for vehicle inspections who will send a mechanic to inspect a vehicle and give it a stamp of approval before you bid.

Attend auctions before you bid

If you haven’t been to a car auction before, it might be helpful to attend a few in the lead up to actually bidding yourself. It will help you familiarize yourself with the process, and prepare yourself for attending as a buyer.

Have insurance organised

Before driving the car away at an auction, make sure you have spoken to an insurer so the car is covered. You don’t want to drive the car off the lot and hit a pothole on your way out! Insurance can be tricky as you might not know if you are going to drive away with a car or not when you attend the auction. A quick phone call to your insurer to explain the situation is all it takes to make sure you are covered for the drive home.

Expect to pay a downpayment

If you successfully buy a car at an auction, you will usually have to pay up to 10% of its cost to secure the sale. Make sure you are prepared to be hit with this payment before you arrive. For example, a $30,000 car could mean a $3,000 deposit. In that circumstance you need to have that cash available on the spot to secure the sale.

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