We’ve all seen the Barret Jackson car auctions on TV, and they’re often pretty entertaining. It’s funny to watch some auctions – which are about to end at $21,000 – suddenly skyrocket to a closing bid of $45,000 within the blink of an eye. That’s fine when it isn’t your money at stake, but when it is your money, well… the story is a little different. Car auctions are actually a great way to find some amazing deals.
Where I live, it’s rare that I have access to car auctions where I can physically visit the cars and bid on a car in person. So although visiting car auction in person is ideal, there are still tons of people out there who are finding amazing deals on used cars, new cars, vintage cars, and even exotic cars via online car auctions. Why not save some cash?
Online Car Auction Tips
Online car auctions are not as scary as you think. There are reputable auction houses where you can find great deals on all types of vehicles, and better yet, they’re usually open to the public. But before you start bidding, you need to know a few things. So on that note, here are a few tips on purchasing a vehicle from online car auctions to save you money, and avoid getting ripped off.
Choosing Your Vehicle
Before putting in your initial bid, make sure you have done your research on the vehicle you are interested in. The auction will generally have high quality photos taken from as many angles as possible. Try to spot as much damage as you can and make notes of it. With that in mind, do research elsewhere as well and see how much that vehicle is selling for. Check used car dealerships, newspaper ads, etc and see the average selling price. Before putting in your highest bid, also make sure that you know what the resale value of the vehicle is so you don’t end up overbidding.
Patience, Timing, and Control
Don’t start putting in bids close to what you are willing to pay. Instead hold back and make it seem as there is not much interest in the vehicle. In an auction, people can get carried away and a good thing can very easily slip from your fingers. Sometimes, people even end up paying higher than retail because things get out of hand. You also want to make sure that you have a price in mind and to not go over that in all the excitement. Remember the reason you are resorting to online car auctions, to save money. So have self control and take it easy to make sure you can get the lowest price possible.
To ensure that you don’t end up bidding on a lemon or a vehicle which has been in a major accident, you should really consider a vehicle history report to tell about the hardships the vehicle has gone through. You can request a VIN number to see if the vehicle is worth your time and effort.
Different auctions have different rates so make sure you know what the premium is. It can be anywhere from 5 to 10 percent. So when you bid, always keep that in mind as your $10,000 can actually be $11,000 depending on the fees.
Be Honest With Yourself
Let’s just say that you were able to get an awesome deal on a BMW 4 Series vehicle but really, you could only afford a Honda Civic if it was not for a car auction. Just remember that if there are mechanical failures, be ready to cough up the money. And also, consider the cost of insuring the vehicle to be on the road. If you can’t afford to keep the vehicle, then don’t bother acquiring it unless your main goal is to sell it. And if you are planning on selling, make sure you know what you are doing and the market for the vehicle.
Shipping Costs & Sales Tax
I already mentioned the auctions fees, but don’t forget the cost of shipping to have that vehicle delivered to you. It could be a few hundred dollars or a lot more. And once you finally have that car and it’s ready to be registered, you have to pay sales tax. So that $10,000 is starting to be a lot more than $10,000.
Another things to look for and some people surprisingly overlook is the mileage on the vehicle. I used to know someone who would purchase BMW’s in bulk and ship them to China for profit. This particular person mentioned to me that with vehicles which had excessive mileage, she would deduct $0.15/mile from the retail value. I’m not exactly sure how these numbers were calculated but this was a method used by her and her company. It’s something to keep in mind at least.
These are just a few of the things to keep in mind when purchasing a vehicle at online car auctions. If you have realistic expectations and are aware of all the costs involved, it is definitely possible to find some amazing deals on vehicles from compact cars to trucks to luxury sedans. If you have auction tips or want to share your experiences, feel free to comment below.