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Buying a Used Car at Auction

By: Scott McBride - Updated: 26 Sep 2010 | comments*Discuss
 
Buying A Used Car At Auction

It can be a risky business, buying a used car at auction, but those brave enough can bag a bargain. Car auctions are most certainly not for everyone, however, and those of a nervous disposition should consider the alternatives.

Auction virgins should make their first trip for research purposes only. Private buyers can find auctions intimidating - as thousands of pounds change hands for hundreds of cars in a flurry of bids - and some will be scared off.

Different auction companies have different rules, so try to find one that is a member of the Society of Motor Auctions and so will abide by a code of practice. Get a copy of the conditions of sale and entry, as well as any other information issued by the auctioneer, and examine what rights buyers do and don’t have.

Competitive Prices

Take a price guide to the auction and watch what the cars are selling for compared to the trade, private and dealer prices. Auctions are where the motor trade buy stock, so prices are usually ultra-competitive, and private buyers should be able to knock out the trade buyers by bidding a few per cent over the trade price.

Local authorities, finance and insurance companies, dealers and the general public all sell cars at auctions. Add company fleet cars to the mix and there is an eclectic choice on offer. Some of the safest buys are modern, ex-fleet or ex-lease cars. These cars often have high mileage, but usually come with the correct documents and a full service history.

Buyers can reduce the risk by bidding on warranted cars or those sold with an engineer’s report disclosing known faults. Try to avoid cars that are ‘sold as seen’ or ‘with all faults’, as there is no comeback if it turns out to be a dud.

Carry Out Checks

There will be a chance for buyers to view cars before the auction, although cars tend to be parked very close together and locked so realistically there are only so many checks a buyer can carry out. In addition, the car will not be started until a few minutes before it is driven into the auction hall.

Sometimes cars are sold in categories, such as executive, low mileage or under three years old, although older cars tend to go into the general sale. Auction companies often hold evening and weekend sales aimed at private buyers, but the number of buyers at these sales can push up prices and better bargains are to be had at midweek auctions.

It is vital to listen closely to what the auctioneer has to say before the sale starts, as his description of the car is legally binding. He may highlight a major mechanical fault, guarantee the mileage, or give details of any MOT, service history or reserve price.

Don’t Get Carried Away

If bidding, set a limit and stick to it. It’s easy to get carried away, but there is no point in paying what a dealer would charge for a car with a year’s warranty thrown in. If a bid is successful, the buyer must pay an immediate deposit - usually around 10 per cent or a fixed sum - in cash to the rostrum clerk. The balance will have to be paid quickly, sometimes before the auction closes or within 24 hours, and any delay will result in a storage fee.

All in all, it is a high-risk, high-reward way to buy a car. If a buyer knows what to look for, has done his research and has confidence in the make and model of the car, there is a bargain to be had. Otherwise, car auctions are best avoided.

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