Should I buy a used car at an auto auction?
If you are looking for a cheap used car, an auto auction might be just what you need. However, it’s quite different than buying a vehicle from a dealership, so here’s what you need to know.
How does buying a car work at an auction?
Auctions are popular for used car dealers looking for inventory, but that doesn’t mean you can’t have some fun. Some auctions are only for dealers, but there are also public auctions that anyone can participate in. Many are also exclusively online, which may be more desirable these days as the coronavirus rages on.
Two of the most common types of auctions are government and public auctions. Government auctions typically sell fleet vehicles such as old police cars, rental cars, taxis, and impound vehicles. Public auctions typically feature cars that have been foreclosed and end-of-line trades.
Once you find an auction that you want to attend, be aware that these vehicles are sold as is. There is no test drive, and if you get the winning bid, you get what you get. Since auctions are for used cars only, the manufacturer’s warranty on these vehicles is usually long gone.
Many auctions are cash only when it comes to payment methods, so don’t bid more than what you have on hand. Funding on the auction site is also not an option. Many auctions require you to pay the full amount before leaving with the car; some require cash up front and let you pay the rest later.
Having a pre-approved loan may be an option, although banks and credit unions may not be willing to give you pre-approval until they know what you are buying. Many auctions offer vehicles with branded titles, which usually require pre-approval for the payment method. However, this is an option to explore if you don’t have a lot of cash and your credit is in good shape.
Do a little research before the auction
Since auction cars usually sell for less than they would through a dealership or private seller, you could be getting a pretty good deal. This is the main reason average buyers attend auctions. But before leaving with your checkbook, take the time to prepare.
Often you can view the listings before the auction starts. This can give you a chance to do more research on the makes and models that interest you. If you are looking for a specific model, visit vehicle review websites like Kelley Blue Book to see their average selling price and private party estimate of value.
If you see an ad that interests you in particular, see what information you can find along with the Vehicle Identification Number (VIN) on websites like Carfax. You may be able to request a Vehicle History Report to get an idea of what the car went through before it was auctioned.
It’s also a good idea to bring someone with you. It’s good to have a second set of objective eyes that may be able to keep an eye on you if you get past your head. Sometimes love is blind, and someone else can serve as your voice of sanity if you have gooey eyes on a vehicle!
Is An Auto Auction Right For You?
Many cars sold at auction have brand titles, or it’s the end of the line for them. Some auctions feature vehicles that have been leased, sold, traded, resold, and then prepared for auction. Keep in mind that some things may be too good to be true, and remember that there could be a very good reason why this “perfect” car is so cheap.
Keep your cool when you are at an auction. It can be easy to get carried away by the excitement, and that thrill of a good deal could get your adrenaline pumping and beyond your common sense. Remember, auto auctioneers are there to represent the seller and the seller also wants to make money from the sale. Always keep your maximum price in mind and don’t go over your own budget.
Auctions aren’t for everyone either. There is a risk in buying a used vehicle at auction where you cannot take it for a ride. The test drive is usually a very important part of the car buying process because you can feel how it rolls on the road and listen for any issues that might be lurking. There’s a good reason dealers are still in business in the age of online shopping: shoppers like to get a good overview of what they’re buying.
Is a dealer faster?
While auctions have the potential to get you a good deal on a used vehicle, going through a dealership has many benefits. You have the flexibility to negotiate the price, take a test drive, and take your time deciding what’s right for you.
Plus, not everyone has a ton of money on them to buy a car. As vehicles are expensive investments, financing is therefore extremely popular and convenient. If you have credit problems, you may have a better chance of securing auto financing by looking into special financing concessions.
Special finance brokers are registered with subprime lenders who help borrowers with bad credit. Many traditional auto lenders have high credit rating requirements, and even if you have the income to buy a car, a bad credit rating might be enough to deny you financing. Subprime lenders, however, look at more than your credit score to determine your ability to take out a car loan.
Bad credit car dealers
Choosing the right avenue to purchase your next vehicle can be a challenge. Auctions are popular because they can mean a lot, but for a lot of people it’s too risky. Financing can be intimidating if your credit isn’t perfect, but we want to help you find a dealer with the connections you need.
Here has Auto Express Credit, we have located dealerships across the country who are registered with subprime lenders. To be matched to a dealer in your area with bad credit resources, complete our free form car loan application form.