If you want a new car, but want to avoid financing the vehicle for five years, or having a huge monthly car payment, you many consider purchasing your next vehicle at a public auction. Public automobile auctions are held throughout the country on a regular basis. Some areas have auctions every weekend, in which potential buyers can purchase a new car at a huge discount. I’ve personally known people who have been able to buy $50,000 luxury cars for nearly 50% off the dealership’s asking price. Of course, not all auctions offer such phenomenal deals. Nonetheless, you may be able to locate a quality vehicle at an exceptionally low price. Furthermore, if there are few bidders present, you avoid a bidding war, and are given the opportunity to walk away with the vehicle at a dirt cheap price.
Even though car auctions are a smart way to purchase a new car, there are certain pros and cons to this method. For starters, persons new to the auction world and those who fail to research auction steps may purchase a lemon, or pay more than necessary for the vehicle. The primary reason buyers shop at auctions is to save money. Thus, buyers should avoid becoming caught up in the excitement of bidding. In this happens, they may pay more money than they are able to afford. Because auction cars are sold to the highest bidder, it is easy to become over passionate.
Cars can be bought from local and online car auctions. Before the Internet and online auctions such as Ebay Motors or Yahoo Car Auctions, most people would visit their local auction on Saturdays mornings, and browse the selection of vehicles. Prior to an auction taking place, many facilities have a write-up in the newspaper listing all available cars. If necessary, contact the auctioneer and inquire about starting bids.
Each agency operates differently. If eager to get rid of a particular vehicle, the auction may start low. On the other hand, if a highly sought after car is in stock, the auction will likely begin at a higher price. Additionally, some local auction sites allow potential buyers to preview the vehicles before the auction. If so, you can visit the location a few days before the bidding begins.
To ensure a smooth auction process, potential bidders and buyers should consider the following tips, which are guaranteed to simplify buying.
1. Get Financing – If you have a large cash savings, which allows you to buy a car outright – great. In this case, avoid bidding higher than the amount you have available. On the other hand, if you do not have cash to pay for the vehicle, contact a bank or auto loan company and arrange financing. Complete an application, and obtain a pre-approval loan amount. By doing so, you know an affordable amount, and you avoid the hassle of retracting your winning bid, which involves a steep penalty.
2. Get Car’s History – Before purchasing any used car, it is important to know the car’s history. This is especially important when buying from an auction. Car auctions received cars from a variety of sources. This might include:
Ã¢Â?Â¢ Police Auctions
Ã¢Â?Â¢ Abandon Vehicles
Ã¢Â?Â¢ Salvage Vehicles
To avoid the disappointment of buying a used car, only to have the vehicle stop working within a few months, and spending thousands of dollars on repairs, get a car history report. Reports are easily accessible and viewable online. Simply record the vehicle’s VIN (vehicle identification number), run a car facts check, and within minutes you will have the vehicle’s complete history.
3. What is the Car Worth? – If previewing vehicles before an auction, gather as much information as possible. What is the make and model? What year is the vehicle? What is the mileage? Is it in good condition? Next, take this information and determine it’s worth by using Kelley’s Blue Book.
4. Ask about the Car’s Title – If using an outside finance company to pay for an auction car, you will need to provide the vehicle’s title before funds are dispersed. Because most car auctioneers do not have the title on the premise, you may have to wait. This is common. Nonetheless, inquire as to how long it will take for the title to be released.
5. Be Prepared to Pay a Premium – If you are the winning bidder, give yourself a pat on the back. However, be aware that prior to you driving away in your new used car, the auctioneer will charge a premium fee. In addition to paying for the car, all winning bidders must pay a 5% – 10% premium. Depending on the price paid for the vehicle, the premium fee can range from a few hundred dollars to thousands of dollars.