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August 27, 2013

Basic Auto Auction Tips

Auto auctions offer experienced consumers the possibility of great car values at unbelievable low prices if you know what you’re doing.  Auto dealers have been the primary benefactors historically, finding auctions to be excellent places to sell off trade-ins as well as to buy for resale.   Vehicle auctions are becoming more and more accessible to the ordinary person, but as with many “good deals,” let the buyer beware.  In other words, an auto auction is also an excellent place to be a cheap junker!

Bloomberg Business Week provides some sensible tips for the inexperienced, prospective buyer.  In general, be aware that you’re buying a car as is, without the detailing or fixing up that a car lot will do.  That represents some of you savings as well as certain risks.  Depending on the auction format, in person versus on line, you may get little to no opportunity for a thorough inspection.  Ascertaining the value of a prospective buy is a much greater challenge.

1.  Arrive early.  This will give you time to get as much information as possible about a car or cars that interest you.  If you can get a VIN number, then you should do a CARFAX to determine if there are any serious problems in its history such a flood damage or a major accident.  The article doesn’t mention it, but having someone with experience in auto mechanics is a good idea, if you’re not a pro yourself.

2.  Know what you can afford and are willing to pay.  Do not let the emotion of the moment draw you into over-bidding your resources.  Successful auction buyers don’t buy on impulse.

3.  Bloomberg Business Week strongly emphasizes being sure that the paperwork is in order, that the title is clear, and that there really is a car (for on line auctions) before paying out the full price.  Check out the article for more details.

For the real inside scoop on vehicle auctions, who would know more than an auctioneer?

July 13, 2012

How Does It Work? Tell Us Your Stories

A recent college graduate, shocked at how expensive cars can be, decided he wanted to try the auto auction route. He asks some specific questions, which I will address shortly. First, though, I want to ask readers to share their experiences with us—good and bad. Did you get an amazing car at an unbelievable price? Did you get ripped off? Did you find the auction business you dealt with helpful or not? Did you find the process difficult? How much work did you do ahead of time to assure you got what you wanted, both vehicle and price? Are there pitfalls you warn other prospective buyers about? What did you do they got you what you wanted? Do you have regrets?

As I’ve reviewed some of the Michigan auto auction web sites, I’ve observed that most if not all have on line photos of available vehicles; most also have lots where cars may be viewed in person. However, I would verify with a telephone call before driving any distance for that. Some cars to be auctioned may not be at the lot till the time of the auction, another thing to check.

If you’ve never been to an auction of any kind, you should go to one, just for the experience before you go to bid (You can watch one here, but it’s not quite like  being there). One article I reviewed, suggested among its tips having a firm maximum bid in mind…and sticking to it! I would add, be prepared to let your choice go to another bidder rather than breaking you limit (or bank!). The auction experience itself can become intense, especially for the less experienced. Someone who wants the same item or even the owner who wants to drive up the price may run the bids up. If your goal is to get a get value, then you don’t want to get caught in the emotion of the moment.

If you don’t happen to know someone who has purchased a vehicle at auction, then I’d suggest calling and chatting with a couple of different owners of auction businesses. Prepare a list of questions and ask for their advice. I did something like that when I was shopping for paint, years ago, and I settled on one particular brand because the clerk clearly knew his business and gave me really sensible advice. A good dealer will do the same.

June 16, 2012

One Customer’s Suggestions for Buying at Auction

I’m still educating myself on vehicle auctions.  I’ve made contacts with friends who used auto auctions to purchase cars and a dealer.  I can provide information on the various auction businesses in Michigan, and that will provide information that dealers may use, especially since some businesses work only with dealers.  I’m intrigued by the possibility of finding and buying a car I want at a better than normal retail price.

I posted earlier tips for buying seized autos, but today I want to share an article from a simple buyer and a woman buyer at that.  This story happens to be from Canada where Jacq purchased a loaded 2008 Mitsubishi Outlander XLS 4WD for $11,000, about half of the normal retail price.  She shares nine steps for buying a car at auction.   Briefly, they are

1.  Find an open auction with newer cars not restricted to dealers (We have Michigan auctions on this site).

2.  Check the auction’s inventory and choose a few cars that interest you (in your price range).

3.  Inspect the cars that interest you in person and check for obvious problems.

4.  Learn all you can about the cars that interest you–value, reported problems, user satisfaction.

5.  Determine you maximum bidding price, then hold to it.

6.  Visit a couple of different auctions to get a feel for how they work before  you place your first bid on a car you want,

7.  Check the mood of the bidders.  Some days a crowd will be frugal and bidding will be low, and then at other times, the bidders are willing to spend and bid high.  Be prepared to walk away.

8.  Don’t let yourself get too much into the spirit of the thing; do not exceed your maximum price (set when you were thinking calmly and reasonably.

9.  Take advantage of the on site inspection services some auction houses offer.

I’d add that you should acquaint yourself thoroughly with the particular auction’s policies, so that you are prepared to follow their procedures, once you’ve won the car you want.  This article also includes a video of an auction house in Charleston.

June 7, 2012

Advantages of Seized Auto Auctions

Lee Connors wrote about “Five Reasons to Try Seized Auto Auctions” in this 2007 article.  His thoughts seem worth a look today.  If you’ve ever bought from a dealership, you know how challenging it is to get a good price, perhaps later discovering that someone had gotten a better deal.  We a ll want a great car and a great price.  Seized auto auctions offer “vehicles seized by the banks, police agencies or government” or pre-owned government vehicles with potential for thousands of dollars in savings and, in come cases, starting bids of as little as $100.

1.  Peace of Mind

To maintain a good reputation, auctions sites offer a variety of customer services.  You may get a vehicle history report, buyer protection from fraud or misrepresentation, or even a buyer’s rating if he has sold before.  Some sites also offer resources on how to bid and how to buy on line.

2.  Convenience

With on-line auctions, you may bid from home.  With a laptop or iPad, you can bid from anywhere with wireless and be taking care of other business while you wait for your winning bid.

3.  Staying on Budget

On-line bidding isolates you from pushy salesmen determined to get your name on a sales contract.  With the placement of a maximum bid, you also establish your limits before the excitement of bidding begins, giving you a better chance to stay with your means.

4.  Easy Paperwork

Many sites seek to keep your purchase as simple as possible, starting with on-line forms.  Many also offer courses on bidding procedures, access to finance or insurance companies, and even a way to verify V.I.N. numbers.

5.  Thousands of Choices

Starting with vehicles on site, to lists of cars to be auctioned with their location, and finally access to databases, auction sites can help you find a car you want, pretty much where you want it, or take you request and inform you when the car you want is available.  Some business are dealer only, while others allow access through membership.

Connors wraps up with this excellent counsel:  “Remember that information is key. Like any major purchase you should do your research on the car you plan to purchase. Once that research is done familiarize yourself with the policies and guarantees offered by the seized auto auction site. Find out what you can about the vehicle and the seller. Look into insurance and financing options. Prepare well and you should have a very enjoyable experience and own the car of your dreams for thousands less than the guy next door all buy trying out the seized auto auctions.”

May 28, 2012

Know Your Stuff (unless you have money to throw away)!

Auto auctions cover a wide ranger of possibilities, everything from buying a decent car inexpensively to buying an expensive collector’s car.  You can sell a junker, donate a car you no longer need to charity, or seek a good price for a classic car you’ve personally restored.  The possibilities vary, but one thing does not:  you need to know the value of the vehicle you wish to sell or buy.

Now if you wish to bid on a one-of-a-kind item like this “ghost car,” then your decision will likely be based on it value to you, as a collector, the number of other bidders who also want it, and the amount of money you have available and are willing to pay.  Although auctioned items are typically, “as is,” the state of a collector’s item will probably be reliably stated.  If you’re a collector or wish you could be, you’ll probably enjoy this video, but I can’t imagine people in this high-priced environment often get ripped off.

However, for more ordinary needs, one thing is pretty clear, and this is you need to know the value of the car whether you’re buying or selling.  Now, if you’re a dealer, well established in the business, I probably need advice from you.  For the rest, there are places like this, that provide guides for looking up the information you need by make, model, and age.  Not only do they include information for the prospective classic car buyer, but they have guides for buying all kinds of vehicles as well as on line information.

Finally many dealers will assist you and provide an estimate to help your deliberations.  If you have a friend who is a knowledgeable mechanic, I’d encourage you to bring him to the next auction you attend because checking a vehicle’s condition is also a valuable piece of information as you determine a far price to bid.