The pros and cons of buying a car at auction – Jalopnik

Everyone loves a bargain, but the problem with cars is that bargains are few and far between. New car prices have just peaked above $50,000, which is simply too expensive for many of us to consider. As a result, demand for used cars is remarkably strong, driving up car prices across all sectors. That dream car bargain is becoming increasingly elusive at the moment, but luckily there’s still one way to get a good deal: shopping at a used car store.

Of course, there are risks involved, such as limited rights, problems with pre-inspecting the cars and even hidden costs, and we will cover these risks in more detail. However, there are also rewards to be earned, including one that directly impacts the health of your bank account.

The truth is that there are negatives and positives no matter how you buy your cars. Buying brand new is the most expensive option, but also offers the most peace of mind because every part is fresh to you and backed by a warranty. Buying a used car from a dealer is more expensive than buying it privately, but here too you can drive away with a warranty in most cases.

Like buying at auction, buying privately usually means no guarantee, but in this situation you can at least inspect and test drive the car. In general, the risky approach of buying through an auction is more commonly used by car dealers, but this does not have to be the case. As long as you are aware of the risks and rewards in advance, buying a car at auction can be a great experience and even somewhat enjoyable

Car dealers shop at auctions for a reason: vehicles sold at auction often trade for much less than their typical retail value. This is due to the risks involved, including the fact that it is difficult to know whether the cars going through the auction have major mechanical defects, electrical issues, or anything else that needs to be resolved before the vehicles can be driven safely. As a result, a used car auction can be one of the best places to find a cheap project car, provided you’re not afraid to tackle a few jobs before hitting the road.

When buying a car at auction, do your homework first. In order to make an appropriate offer, you need to know how much the vehicles are worth. However, if you do this, you can end up getting a new car for thousands less than the same car would fetch at a dealer. Even if a few repairs are needed, there is often room to do the work and still get a bargain.

Other essential things to know before bidding include whether or not the car has a clean history, whether there are any unresolved safety recalls, and what other models with similar ages and miles are actually selling for. The more you know before you throw your hand in the air, the more likely you are to actually walk away with a lot of money.

Probably the biggest concern when it comes to buying a car at auction is that there is usually no cooling-off period or warranty. In reality, in many cases there is no protection at all unless you can prove that the auction house deliberately mis-advertised or misrepresented the vehicle. In that case, they may consider issuing a refund. However, this is very rare, so don’t count on it.

If you’re handy with a wrench and are in the mood for a small project, this might not be too much of a concern, especially if you’re only eyeing cheaper cars. However, if you’re not great with tools, or you’re considering a more expensive purchase, the thought of having to buy a car that you can’t thoroughly inspect or test drive without a warranty is understandably a little worrying.

For many, the higher cost of buying from an established dealer who offers test drives and warranties is worth the peace of mind. Buying at an auction also makes enormous sense for dealers with mechanics and a garage at their disposal where they can solve problems cheaply.

Not everyone buys cars the same way. Some will narrow their search, pick a particular make and model, read hands-on reviews, study prices, and then go out and buy the best example they can find. Others are much less picky and simply identify a few must-have features before visiting a dealer to see what’s available.

For the first type of shopper, auctions may not be the best solution. For the latter, however, the sheer variety of cars going in and out of auction offers a fantastic range of choices. Are you looking for a seven-seater SUV? Sure, just go to the local auction, see what turns up that day and try to bid on whatever you like. If you miss the first one, don’t worry; chances are there will be several others crossing the block on the same day, especially if you visit one of the larger auction houses.

Another benefit of auctions is that you may be able to drive away your used car the same day. All you have to do is complete the payment, pick up the vehicle, find it in the parking lot and you’re good to go. Typically, there is no lengthy transfer process, no waiting for the service and valeting departments, and no time-consuming financing procedure. It’s as simple as finding a car, placing the winning bid, picking up the keys and driving home. Don’t forget to arrange your insurance before you go on public roads.

While the speed of buying a car at auction is all well and good, it also poses some problems for buyers. First of all, the actual experience of buying a vehicle at auction is very exciting. You may have that old Corolla in mind with a maximum price of $5,000 in mind, but when push comes to shove, are you going to miss the chance to take it home for more than a few hundred dollars? What about $500, or an extra $1,000?

The truth is that many of us get carried away at auctions – it’s very easy to do. Sure, it’s exciting. However, when you’ve paid $1,500 for what you planned to spend and then find out that the car has a nasty transmission fault when you pick it up, that excitement quickly fades.

Additionally, auctions require immediate payment unless you are a dealer with an inventory arrangement, but for the sake of this point we will assume you are just a regular customer. That means no financing and no affordable payments; you just have to hand over a large sum of cash to an unknown entity. Oh, and auction fees can be quite expensive too, so make sure you take that into account before spending your savings on a questionable sports car.