Should you buy at a car auction?

Should you buy at a car auction?

4 February 2019 Concept Car

We often think of car auctions as an exotic and slightly mysterious phenomenon. In reality, it is quite common. 600,000 cars are auctioned off each year. And there are around 13,000 cars available at auction houses in the UK at any given moment.

So if you intend to buy at a car auction you’re in good company.

To help you make up your mind, we’ve put together some of the most typical questions on the topic. After reading through these, you should be able to take an informed decision whether buying at a car auction is for you.

Can I buy at a car auction as a private person?

Many people are worried that buying at an auction is for dealers only. There is something to be said for this. About 90% of all deals at car auctions are conducted by professional salesmen.

This, however, is not to say that it’s unheard of to see private individuals at a car auction. Taking the above number as a reference, about 60,000 cars are sold to private buyers each year.

That’s not really a lot. But car auctions are still a niche in the UK anyway. At least when compared to the USA, where they’re a lot more common. So don’t let the fact that you’re outnumbered by dealers scare you off.

Do I need to be an expert to buy at a car auction?

Generally speaking, yes. Although you should be able to avoid serious mistakes by following basic guidelines, an above average knowledge of cars is pretty much required at an auction.

The main reason is that most of these cars are not thoroughly inspected. As website CarPro puts it:

“While auctions say they inspect cars before they run through the lanes, my experience is that it is very rapidly done, and not very extensive. Usually, they take the word of the seller, which is usually a used car dealer.”

So the risk is on you.

What if I’m not an expert?

If you’re not particularly knowledgeable, there are three options. First, walk away and just buy at a car dealer like Concept Car Credit.

Secondly, take a car expert with you. This doesn’t need to be a certified mechanic. You’d be surprised how many of your friends know quite a bit about cars. They’ll probably feel honoured and thrilled if you ask them to join you at an auction.

Thirdly, come prepared. There are quite a lot of things you can check before rushing in to buy at an auction:

  • The average value of a particular model, using online valuation sites.
  • Basic facts about a car and its MVO repairs on the free website of the DVLA.
  • A comprehensive car history through agencies like HPI. This will tell you, for example, if the car is fit to be driven on UK roads and whether it has been stolen.

Do cars at auctions really come ‘as is’?

You will sometimes hear people claim that cars at an auction are sold ‘as is’. This means that what you see is what you get. You will need to assess the value of the car yourself based on the information available to you. After that, there’s no recourse. Or, as Jerry Reynolds from CarPro puts it: “If it falls apart on the way home, gather the pieces up, they are yours.”

Technically, this is true. However, in a bid of improving their image and protecting customers, auction houses will perform a few basic checks themselves.

Also, there is often some form of protection against wilful deception. Do note, however, that this protection will often only apply for a few days after the sale was made.

What kind of information will I get?

What kind of information will I get? - Concept Car Credit
If you want to protect yourself against costly mistakes, your best strategy is to listen carefully to the auctioneer. They are obliged to tell you about the condition of the car truthfully.

The only thing is: You need to be able to understand the exact meaning of their terminology. Here are some of the most important key words:

  • ‘No major mechanical faults’ – this relates very specifically to engine, suspension, drivetrain or gearbox. It essentially means the car will drive just fine and won’t need any significant repairs. It does not rule out smaller faults or defects.
  • ‘Specified faults’ – these smaller defects are summed up under this umbrella term. Make sure to understand exactly what you’re getting.
  • ‘Sold as seen’ – this just means that the faults of a car are part of the package. Unlike a dealer, the auction house does not have a minimum quality standard to adhere to. So there is no recourse.
  • ‘Sold with a warranted mileage’ – auto express explains this thus: “the mileage has been verified by an independent inspection and the car is sold on the basis of the report.”

How do I set a budget?

If you intend to buy a car at an auction, you need to set yourself strict limits when it comes to finance. This is, because auctions differ from regular car deals in significant ways:

  • At a car auction, the price goes up, rather than down as it would if you were haggling with a dealer. This creates a rush of adrenalin, which can lead to (bad) impulse decisions.
  • There is no way a bank will finance a car sale at an auction. So the money will have to entirely come out of your own pockets.
  • Since you can’t be as certain about a car’s true condition as with a dealership purchase, it is harder to estimate its true value.

To arrive at a sensible budget, you should therefore err on the side of caution. The most important recommendation is to stick to your limit and to never ever allow for exceptions.

Financial advice site The Pennyhoarder has two more useful tips:

  1. Set Aside Money for Repairs: An important one, as these will add to the total purchase price.
  2. Keep the Vehicle’s Potentially Short-Term Future in Perspective: Although you may not need to discard your car within a few weeks, don’t expect it to last as long as a ‘regular vehicle’.

Buying at an auction: Further points

You can further reduce your risk considerably by restricting your budget. Here are some more things you can do to get the most out of a car auction:

  • Come prepared: Before you submit your first bid, know exactly what you’re committing to. An expert friend will help you with this. But using the Internet, you can already perform a quite thorough investigation by yourself.
  • Take your time: Car auctions require patience. You may have to take a day off work. And you should arrive early to be able to take a closer look at potentially interesting models.
  • Take a test drive: Although it is not always possible, some auction houses will allow test drives prior to the bidding. Whenever this is possible, make use of this opportunity.
  • Documentation: Always make sure the required documentation is included with the car. The most important of these is the V5.
  • Don’t pressure yourself: It may be hard to resist the temptation of buying a car at all cost. Don’t pressure yourself, however. If you can not get the car you wanted, just leave and come back next time. There are always plenty of cars available at auctions each week.

Is it worth it?

Is it worth it? - Concept Car Credit
Car auctions look simple, but they’re quite complex. Should you better leave them alone? Car Pro seems to think so, claiming: “While I am sure there are success stories, my experience is that most people end up getting burned.”

Then again, most experts agree that you can get excellent deals at car auctions if you’re careful. There is a certain logic behind this: Dealerships may have bigger budgets, but they, too, have their specific preferences. Once in a while, a quite attractive car may not suit their taste. That’s when your chance has come.

That said, we personally consider the dangers of buying at a car auction too high. Especially if you’re experiencing financial difficulties, an auction may simply be too risky.

Instead, you can find amazing cars for all budgets at CCC – even for those with a bad credit rating. You may not quite get the thrill out of the experience as you might at an auction. But then again, you won’t get burned either.

4 February 2019 Concept Car