How to Buy a Great Used Car at Auction

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

Computer
Internet access
Car value booklets
Pen or pencil
Certified check

Step 1

Reasons to Buy at Auctions - The obvious reason for buying at auction is the "price". It is not unheard of to purchase attractive good-as-new vehicles at 40% to 60% below retail value. This is especially the case given the poor economy and rising inflation. Many people believe that all auction vehicles are worthless. However, this is not accurate. There are cars that are junk, but there are also some really nice vehicles as well. Many dealers have purchased low-mileage repossessed vehicles that were in excellent condition. These cars were originally purchased by people who ended up two or three months behind in their monthly payments, and then lost their vehicles to repossession. There are also many government agency vehicles being turned over every 2 years with only 6000 miles on them. Cars seized by state and federal law enforcement agencies from drug dealers and other criminals are also good vehicles that sell well at auctions.
Step 2

Locate Auto Auctions - The biggest challenge for most people who wish to buy an auction vehicle is to first find out where these auction sites are located. It is really not difficult to find one in your local area if you know exactly where to look. The local newspaper is one source. However, those auction announcements are generally only published every two or three months; and sometimes they're not published at all. The only other source is the Internet. You can find many websites that promise to be good resources for auto auction locations and announcements, however many of them are scams, and will only rob you of your hard-earned money. The easiest and best way to gain access to hundreds of public auto auction listings in your area is to become a paid member of a car auction listing site. With that said, you will still want to make sure that you sign up with one that is legitimate and worth the investment. The top three recommended auto auction sites are Gov-Auctions.org, CarAuctionInc.com, SeizeCars.com. For a low one-time fee, you can get a regularly updated list of auction announcements in all 50 states. You can find these sites listed in the resources section below.
Step 3

Make Sure that You Know the Car's Market Value - Before attending any auto auction, you must first research the value of the vehicle that you wish to buy. You should not go until you have armed yourself with information on the trade-in values of the cars that interest you. There are many good sources that will provide you with this information such as "Old Cars Price Guide", Kelley Blue Book, Edmunds.com, or NADA (National Automobile Dealers Association). You can use any one of these references, but it may be best if you used them all. You will have greater success with your auto purchase if you know the trade-in prices. If the bidding gets too high on a particular vehicle, you will know immediately, and can then walk away and wait for the next vehicle to be auctioned. This is how you'll get your vehicle at way below wholesale prices.
Step 4

Attend the Auction - On the day of the auction, you want to make absolutely sure that you arrive early. As the auction progresses, more buyers will show up. By attending early, you stand a good chance of beating out those late comers by getting to some of the better deals early. Another recommendation is to bring someone with you who possesses an expertise in vehicle mechanics. Be aware of who is selling the car the interests you. Many of them are used car dealers who buy and sell cars every day, and are in the profit-making business. Make absolutely sure that you know beforehand what you are about to purchase. It is absolutely important that you spend ample time checking out the vehicle, and that you leave the auction as a satisfied customer.
Step 5

Look Over the Inventory - Thoroughly look over the inventory. Auto auctions will have dozens of vehicles to choose from, and it is a good idea to check out what is available for sale. You don't just want to look at each of your choices from the outside. Instead, you will need to exam as much of the car as possible including the interior, trunk, and under the hood. You will also need to start the engine, and make a thorough check of how well it works. Every part of the vehicle that is checkable should be checked.
Step 6

A Word about Manufacturer's Warranties - Auction vehicles are normally sold in "as is" condition, however the manufacturer's warranty may remain with some vehicles. This is usually true of the latest model vehicles that are up for auction. However, you should still do a thorough check of the vehicle whether it is under manufacturer's warranty or not. Car dealers who are looking to purchase auction vehicle often follow this practice, and it is necessary that you do likewise. The idea is to avoid the inferior vehicles that are bound to cause many major headaches later.
Step 7

Check the Exterior - Examine the vehicle for signs of lots of body work. Check the doors, hood, and trunk. Check the body of the vehicle for rust, paint bubbles, mix-matched paint surfaces, and paint overspray on bumpers, lights, and windows. See if there are welding marks in the door frames and trunk. Also, check the engine compartment for new bolts or bolts which don't match in color. And check the lights and turn signals. Look for doors that don't close properly. Check for sander marks in the finish that were not smoothed out before the paint was applied, or on the chrome trim. Check for damages to the glass, and in the windshield. Damages to windshields may pose a problem for passing vehicle inspections, and can also be impossible to replace.
Step 8

Check the Interior - Many times interiors are replaced with material that is not original. Always look at the headliner in the car as many times people never look up until after they purchase the car to find out the headliner is either gone, torn, or dirty. Check under the seats, floor mats and rugs to look for dampness.
Step 9

Start the Engine - Start the engine and listen for any unusual sounds or knocking noises. Make sure that the exhaust is clean. Mash your foot on the brake several times to check brake lights. Put the car in drive and reverse several times to check if vehicle moves forward and backward. Make sure that the car doesn't lunge at all or make a clunking sound when you shift into another gear. Listen for how the motor sounds. Rev the motor just above an idle to listen for bearing noise. If the motor has a deep rattle, this is an indication that it may need some major engine work. Check the air conditioning. Also, check the heating system and all the power options such as the steering, windows, and seats.
Step 10

Check the Oil - Pull out the oil stick. If white bubbles appear, this will indicate that water is present in the oil well. Feel for grainy fragments in the oil residue. Also, check if the oil is thick to the point of pasty or if it is extremely dirty. If so, you will need to pass on this vehicle.
Step 11

Check the Transmission - Check the transmission in the same fashion. Check the transmission fluid. If the color of the fluid is dark brown or has a rancid smell, this can create a serious transmission problem in the future. Keep in mind that the color of the fluid should be light pink. Check for leaking spots and stains under the car. Check the tailpipe for gummy soot.
Step 12

Place Your Bid - Now, you are ready to place your bid, and try to purchase the vehicle. When the vehicle comes on the block the auctioneer will ask for an opening bid. Don't be the first bidder. Leave that for someone who has experience. Allow that person to bid first so that you can see if the car will be in the price range that you want to spend for it. Set a high figure that you are willing to spend for the car, and see where the bidding goes. When the bidding begins to slow down, the auctioneer will call for a final bid. If the vehicle is still in your price range that you want to spend, present your final bid. If no other bidders come forward, you will be the winning bidder. Once you have taken possession of your vehicle, have it checked out by a certified mechanic for its current condition. Enjoy your purchase, and drive safely.