Inflation continues to run at 8.2% as 2023 starts. This has led to a high cost of living, with prices of various commodities skyrocketing.
However, that doesn’t mean you won’t be able to get a car if you need one. To find one that fits your budget, you can bid at car auctions. Joining car auctions is a smart solution to get a car and save money since vehicles sold there come with reasonable prices. Car auctions can be done online, making it more accessible to buyers.
Auction organizers make sure that the cars they sell are in great condition, so your purchase will be worth the money. Plus, you’ll have a wide range of options to choose from. You might even find some vintage cars.
If you’re planning to participate in physical or online car auctions, read on to learn some of the best practices for bidding.
- Prepare adequately
The first thing you need to do is to prepare well for the car auction. Choose between a public and a government auction. You can check your local newspaper or online. The government usually advertises its auctions on websites.
You may also check out police car auctions in your area. Police auctions sell vehicles seized by the authorities, including the police, banks, bailiffs, and insurance companies.
If you haven’t been to an auction before, visit one to see what happens before your bidding. This will give you a better understanding of the auction sale’s conditions, terms, and language.
Additionally, know what you want to buy. Consider the make and model you want, depending on the performance, comfort, and reliability you need. Check price ranges as well, so you have an idea of where to start bidding.
- Go early
Visit auctions early, so you have more time to browse cars and converse with other bidders, which will help increase your chance of getting the vehicle you want. Even if you miss out on a bid, you’ll gain valuable insights from others.
- Check the vehicle history
Before making a bid, check the vehicle’s history. Review the complete auction report and the following information:
– Credit or open lien details
– Title history
– Data on the Department of Motor Vehicles (DMV) title
– Insurance records
– Mileage records
– Data on minor accidents
If the vehicle history isn’t readily available, check the windshield base for the Vehicle Identification Number (VIN), so you can view the report. If the number isn’t there, then there might be some information about the vehicle that’s hidden.
- Bid creatively
In an auction, the highest bids always win, even with the slightest difference. You should bid creatively using obscure amounts. If you feel a car is worth USD$5,000, you may have a better chance of winning if you bid at USD$5,009. This is because people aren’t likely to bid with odd numbers, and nine takes you beyond five, which is the number most bidders use. It isn’t an ideal strategy, but it can work.
- Define your budget
You should set a maximum bidding budget to avoid overspending. Your budget shouldn’t just cover the price of the car but also the costs of restoration if you need one and possible repairs. Note too that the amount you bid might not be the amount you pay, because there could be additional costs, such as taxes, buyers’ surcharges, and registration fees.
So, with a budget, you’ll be able to successfully bid and pay for your car without getting into financial trouble.
- Consider the buyer’s premium
Remember the buyer’s premium as you get ready to place your bid. This will be included in the final price. The cost of this premium varies, but factor in between some hundred dollars and 10% of the last bid.
You can search for the information on the buyer’s premium on the auction site and consider the amount in your bids. This will help you avoid paying an over-market value for your vehicle.
It will also help to familiarize yourself with terms that experienced auction buyers know:
– Reserve: Usually hidden during bidding, it’s the minimum price the seller will accept for the car. However, the auction is nullified if no buyer bids the reserve number. The seller may decide to waive the reserve amount and accept the final offer.
– No reserve: Because there’s no reserve amount, the one with the highest bid wins.
– Double-ending: It’s best to stay away from double-ending auctions, as auction companies receive commissions from both the sellers and buyers.
By knowing these terms, you’ll feel more confident and ready to bid. However, don’t hesitate to walk away. Settle for your second choice or wait for the next auction—you’ll eventually find your dream car.
- Take a professional with you
Auction bidding can be overwhelming, especially if it’s your first time. But if you learn the rules and visit an auction with an experienced buyer, you’ll have nothing to worry about.
- Read the fine print
Information about a vehicle’s defects should be included in the fine print, so read the fine print carefully. Going over the fine print will also help you identify hidden fees.
Even the best bidders at car auctions had to learn to get there. To avoid the winner’s and loser’s curse, as commonly known in bidding, follow the above tips to get the best deal.