Selling a Used Car at Auction

Car auctions provide one of the quickest, easiest and most secure ways to sell a used car, but it can be a bit of a gamble. The price a car achieves depends on who is there to bid on any given day, so there is an element of luck involved and, in general, auctions are unlikely to get the very best price for a used car seller.

Auctions are held every day of the week throughout the United Kingdom and rules and charges will vary from auctioneer to auctioneer. The basic principles are the same, however, and most auctioneers will ask prospective sellers to follow these straightforward steps:

• Take the used car, together with its registration document (V5C) and MoT certificate to the auctioneer’s premises during normal working hours. Include a service history and receipts for any repairs and work carried out if available.
• Complete a simple entry form, pay the entry fee, if applicable and hand over the keys (including spares).
• The auctioneer will check with Hire Purchase Information (HPI) for outstanding finance and accident damage.
• The used car will then be entered into the next available auction.
• If the car sells, payment and a receipt detailing the transaction will be sent, typically within three working days.

Not all auctioneers will sell used cars with outstanding finance, but some do. Many will refuse to sell cars that have suffered Category A, B or C damage. If the car fails to sell at the first auction and the auctioneer believes the reserve price set is a realistic one, the auctioneer may agree to offer the car for sale in a second auction free of charge.

The reserve price is the lowest price a vendor is willing to accept for the car and so does offer the seller a degree of protection. Be aware, however, that the auctioneer will know what the car can realistically expect to make and will not want the reserve price to be set too high. A lot of auctioneers will offer a free, no obligation inspection and valuation of your car and help to set a reserve price.

Fees Vary

Fees will vary, of course, but there is likely to be an auction entry fee of around £20 or £30 and, if the car sells, a commission charge of between 7.5 and 10 per cent of the final sale price. The commission charge is likely to be subject to a minimum of around £50, but some auctioneers will also set a maximum commission charge of around £250.

The benefits of selling at auction as opposed to selling privately are fairly obvious. There are no advertising costs, no hagglers, no time wasters, no potential joy riders and no bouncing cheques. The sale is quick and secure and the money can be in the vendor’s bank account within days.

The one main drawback is the price an auction sale is likely to achieve. Many car dealers buy their stock at auctions and will only pay a price that allows them to make a reasonable profit when the cars are sold on. Some private buyers attend auctions too, however, so better prices can be achieved with a bit of luck.