Buying an auction car is something I know a lot about and I would like to share some insight with visitors.
My experience is based on working for one of the largest auto auctions in the United States as well as attending many automotive only sales as a buyers agent.
The process can be intoxicating and overwhelming. The real opportunity to save thousands of dollars over retail is genuine and tangible. My function at the car auction was to perform frame inspections and prepare the individual vehicles for sale day.
department was the certified mechanical reconditioning center for the facility. Local vendors handled all the cosmetic body repair services.
We evaluated automobiles and sometimes boats to determine the overall condition. It's this condition that would determine how the house would auction the individual unit. The places I worked for divided the stock into three main categories.
Green light meant we found the vehicle in good condition and that no major system problems were detected. The auction company would warranty a green light car for 30 days and provide a refund to the buyer if they discovered major problems after the sale.
The next designation is the yellow light cars. This is when minor problems are detected on a full inspection. A couple of examples would be if the AC wasn't blowing cold air or maybe a dash warning lamp is on, like a check engine light.
Problems that didn't directly involve the powertrain system would also be included. The red light automobile is the last classification to discuss. This designation meant that a major powertrain component had been identified as having a problem.
An example of this would be a worn engine that smoked or a transmission that slipped. They would sell a red light vehicle in as is condition with no warranties expressed or implied.
This designation attracted auto mechanics looking to invest time and money into repairing them. Although risky, the ultimate goal was to send the fixed up car back through the auction under a green light condition for top dollars.
The major excitement on auction day is the real opportunity to buy a vehicle thousands below market value.
You could bid unchallenged and walk away with one amazing deal. The process could also turn on you and go the other way.
Getting into a bidding war could
leave you with little or no profit margin. I have more about this process on my car auction tips page.
The auction car used inventory came from many different vendors, but most often from different leasing and rental car companies. When turned in at the end of a lease car contract they shipped it to an auction house.
Also the large rental car fleets would dispose of their aging inventory at these locations. Some of the vehicles were very well maintained and some not. The buying process would best be described as the buyer must beware and very well educated on the subject.
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Learn more about this subject and what its like to work in this field of the car business from one of my real life
automotive auction stories.
This next auction related story is about a mechanic that worked under me at the reconditioning center and what can happen when a car auction mechanic turns bad.
After working at and helping people buy at the sales you can't help but pick up some valuable insider information. Here is a few things that can cause car buying problems outside an auction environment.
Discover what other kinds of information can be found on this site by visiting the popular auto facts.org homepage.
Buying an online auction car is a different animal. The online sites deal mostly with government or seized vehicles and also bank repossessions. The opportunity to save money is even greater in my opinion than the land based auctions.
The government vehicles often have very low reserves and might sell a lot cheaper then the full blown retail price in some cases.
If you can get one of these deals, the condition of the vehicle isn't as important due to the fact you got the car so cheep.
As long as there's no frame damage you can fix it up and still have a total investment below the blue book value. If the price creeps up to about 50% of retail value then consider protecting the investment.
For more information on this subject see my page about how to buy a used car online. If buying a car online scares you a little, you can always use the internet just for research.
Now as far as where to go for an auction car online, lets talk about this a little further. The best way to go in my opinion is with an auction database type service.
This service provides one stop shopping for a complete database of ongoing auctions. Hunting these down yourself would take a lot of effort. Each state and county have their own government auctions and the data base service ties all these together.
One of these is government-auction.com they have a large database, both online and local. Details of how it works are below but they offer a 56-day money back guarantee if you just want to jump in.
On the site you can get almost any make or model vehicle you desire. Including retired police cars. See my article on why I love police cars and how they can be a best buy for solid transportation. Visit my insiders guide to buying a police car.
Government-auctions.org has created an large database full of these auction opportunities, giving you the chance to bid on many items for up to 90% off their retail value. Once you have purchased your V.I.P Membership you'll have unlimited access to the entire site and all it has to offer.
Who is eligible to participate? Everyone is eligible to take part in these online auctions. They are easy to use and fun! They have designed the site so that you can find what you are looking for fast. Whatever you're searching for they probably have it in their database.
What does the term reserve mean? A reserve is a set price that the seller is allowed to make. If no bidders reach this set price, then the item will not be sold. This is the absolute lowest price the seller is willing to let it go for. Many think bidding is the fun part.
When you do a
search you can go through the results and choose your preferred auction
site. Once you have done this, registration goes pretty quick. Once registered you are assigned a customer number used to track the bids. Make sure you only bid in the most serious way. If you win you're expected to pay up.