Tips in buying used cars in auto auctions
Here at Topspeed.com, we will give you the best advice in buying a used car in auto auctions. Whether it is an online or actual car auction, we will be there to provide you useful and practical tips. Different kinds of scams and swindles are done by many used car dealers in an auto auction. In addition, auto auctions are a great place for flooded, scrapped, and junked cars. So, you should be aware of these misfits. However, there are also good guys that transact business with you in a rightful manner – but be always careful.
The first thing to do when buying a used car in an auction is to verify the car’s title check. There are many available online car title check systems in the internet. For instance, CARFAX has more than one billion car title documentations in its database.
You should also remember that when you transact business in any auctions, you will also have to pay a buyer’s premium aside from the amount you will pay for your winning bid. The price rate for a buyer’s premium differs from each other. There are auction houses that charges 5 to 10 percent buyer’s premium based on the amount of the winning bid. So in effect, if you just won an auction and bid US $10,000 and the auction house has a 10 percent buyer’s premium rate, the total amount you will pay is US $11,000 (added -> US $1,000 as the buyer’s premium rate).
The best alternative for buying a used car in an auto auction would be buying it in a car rental company. Car rental companies can be a great source of second hand cars because most of there vehicles are well maintained and perfectly cared for. Usually, car rental companies will sell most of its vehicles if it is already two years old. Because of this, most of their sold used cars will still have its manufacturer warranties. However, you should still be aware and cautious about buying a used vehicle in a car rental company. At pricing, most car rental companies will not bargain or negotiate for a car’s amount. Nevertheless, if you still want to buy a used car in an auto auction, just remember these convenient details.
1. Most auto auctions need a bank draft as a payment for your purchase of the used vehicle; this also includes the buyer’s premium rate.
2. You should try to verify the used car’s vehicle identification number (VIN) using CARFAX’s online confirmation system.
3. Go with the colors. You should see to it that the used car’s contract has evidently declared as having the yellow, green, or red light. These colors are placed at the back of the auctioneer. They specify the condition and type of the used car’s title.
a.Yellow light – categorizes the used car’s title as having a little or minor damage. To many auto auction experts, this color also signifies that the used car’s title is in “transit” mode; meaning you can not have the title right away.
b.Green light - categorizes the used car’s title as OK; meaning the title is in good condition.
c.Red light - categorizes the used car’s title as having a major damage. It also means that the used car is either rebuilt and / or its actual mileage has been tampered. Red light cars also have the tendency to be wrecked. For this reason, most used cars with the red light title have a very low price. Only experienced auto auction buyers can deal with red lights.
4. The earliest bird catches the best worm. As a good advice, you should be early in any auctions so that you will have the time to prepare and scout for a potential used car. If you come two or three hours after the auction house has opened, you could be distracted by the crowd or your desired used car was already purchased by another buyer.
5. If you are in a public auction, you should have at least one of the following auto price guide books: Edmunds, Kelley Blue Book, and / or NADA.
6. If you are in a wholesale auction, you should have a Black Book. This guide is handy and can be acquired through a monthly subscription. It is like a Kelley Blue Book but limited in its data. However, it covers a wide range of regional info about used cars. It records a car’s model with its corresponding market value if the used vehicle is in good, excellent, or fair condition. Its price list is updated monthly. If you are a private buyer, the Black Book is not for you because it is only for car dealers. Moreover, wholesale auto auctions are exclusive for car dealers. They do not allow private buyers.
7. If you found the used car that you like, thoroughly inspect and open all its parts. This includes the used car’s hood, doors, windshield, tires, trunk, car seats, and roof. You should also check the used car’s vehicle identification number (VIN) sticker and matched it using CARFAX’s online confirmation system.
8. You should ask the used car seller or the dealer when you can have the car’s title. Do not transact business with sellers or dealers who will give you their car’s title much longer.
9. Very important reminder: you are not only paying for the used car’s auction value, you are also paying for the auction house’s buyer’s premium rate.
10. Do not pay too much in an auction. Be price conscious. Just always remember that you are in an auto auction because you want to save money and not increasing the used car’s bid amount.
11. There are some US states that require several environmental checkups in giving a used car a title. For instance, California implements a Gross Polluter Check for every used car. So, you should see to it that the used car you are buying has passed the mentioned environmental checkup system.