Thinking of buying at a used car auction? Read this first....

CONTENTS

Part 1 - Used car secrets - Getting a good deal

Part 2 - Buying a car at auction (this page) Introduction Preparation The auctioneer Inspecting the stock Setting your price The bidding process

List of car auction centres

Used car auction buying guide

Introduction

Buying at auction has become very popular over the last couple of years as more and more used car buyers seek to save money on their next purchase. As a result, its now harder than ever to get a really good deal.

More and more private buyers are heading to the auction halls, margins are smaller than ever and spotting a potential bargain is becoming more difficult. So if you are planning to venture to your local used car auction centre, make sure you are fully prepared or you could end up getting your fingers burnt.

If anyone asks me, I never recommend buying at a used car auction. There are so many places you can get a good deal on a used car now that going to auction is not always the best way to save money. I have seen people pay over the odds for used cars at auction and then have to spend hundreds of pounds fixing them, resulting in a false economy. Even motor traders get caught out - but they can just take it on the chin. Remember this is your hard earned cash. If you must buy at a used car auction then make sure you are properly prepared.

Before you even think about bidding at a used car auction, visit the auction a few times first, just to get a feel for it. While you are there pay close attention to the auction process (it may vary slightly from auction to auction) and observe how the professional buyers operate.

Familiarise yourself with the buyers fees. Many people buy a used car at auction unaware that they will have to pay a buyers premium on their purchase. These fees are higher for private buyers and can be quite substantial as they are related to the purchase price.

If possible try to visit one of the larger auction group sales, such as British Car Auctions or Manheim and avoid the small local used car auctions. The reason for this is simple; the small local auctions are generally full of private entries and dealer part exchanges. This means the quality of stock will be poor and good cars will be harder to come by.

Private customers will generally auction their cars because it’s on its last legs or needs expensive repairs or because they need to generate some quick cash. Dealers will auction part exchange cars that are not fit for retail and that the smaller traders do not want.

The larger used car auctions are more expensive to enter and attract a better standard of entry. Generally they are full of ex-company fleet and lease cars. These cars make the safest purchase at auction as they are nearly always serviced and maintained regardless of cost.

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The auctioneers’ job is to sell the cars for the highest price possible as quickly as possible. To do this they must exceed the reserve (minimum sale) price, which the seller has set. Cars that have been entered by companies or through the trade will have a reserve price based on the trade value.

The auctioneer will very quickly describe the car before they start the bidding. You must listen very carefully at this point as it is your responsibility to make sure you hear what he or she is saying. They will describe the car and declare what paperwork and documents are present. They will also declare if the car is known to have been involved in an insurance loss claim.

If you want a car with full service history then this is the time to find out; if the auctioneer doesn’t mention it then the chances are that it does not have any. On very rare occasions the service history is left in the car and not mentioned, so try and look in the car just before it drives through (you’ll have to be quick!). At most used car auctions there will be a sheet paper in the window stating some basic details about the car.

If you didn’t hear what the auctioneer said then either don’t bid or accept that it’s your responsibility if you missed something crucial.

You may have heard of the expression “bidding off the wall”. This is a common practice at all types of auction and is not illegal. It basically means that the auctioneer will pretend to acknowledge a fictitious bid “off the wall” in order to get the bidding underway or sometimes to bump up the bidding to the reserve price. A shrewd auctioneer can get a private buyer to bid against the wall and increase the final value without them realising. The auctioneer will normally stop bidding this way once the reserve has been met and the real buyer has the winning bid.

To lessen the likelihood of being caught in this way, stand somewhere near the auctioneer so you are also facing the majority of bidders. Standing around the vehicle itself is a good place as you are in the middle of the saleroom and can face the crowds. By doing this it’s far easier to see if there are real bidders against you or not, also the auctioneer will be less likely to employ this tactic. Some bidders are very discreet so it can be hard to spot them. Other bidders may be traders bidding on their own stock, so there are no guarantees.

The most important thing to remember is to stick to your ceiling price. If you do this, you can avoid being taken for a ride. Never bid more than your set limit. It sounds so easy but so many people get carried away so be cool, there are always other cars.

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Make sure you get to the auction early, grab a brochure and a Tea or Coffee and start looking through the stock list. Most major used car auctions will let you view the stock at least an hour before the auction starts. Get there before the viewing starts and make a shortlist of cars that interest you.

When its viewing time, find the cars you like and spend this time examining them very carefully. Read part 3 of our buying guide for used cars and follow the steps for examining the exterior of a used car. Most of the traders and big crowds start arriving after the auction itself has begun, so this is a great opportunity to get a real good look at the cars and eliminate any that are unsuitable.

I would recommend buying cars from the big lease firms or motor group sales and not from the general sales. This will once again minimise your risk of buying a lemon. The auction brochure clearly states what sale a car is in.

Don’t be put off by very minor bodywork issues that can be easily fixed, but do allow for it when bidding. If the car has damage that you are unable to assess or looks too serious then its best to steer clear, there will always be better cars.

Remember to follow this process when you make your dummy runs to the used car auctions and learn how to spot the good stock. Then watch it go through the ring and see what price it achieves. It’s a good idea to make notes for future reference especially if you don’t have access to trade price guides.

Examining the interior of the car is a different matter altogether. The cars are kept locked until a couple of minutes before they go through the auction hall at which point the staff will unlock a whole row of cars ready to be driven through. This is your window of opportunity. As soon as the car is opened it will be left empty and running for a minute or two. Other traders will be gathering like vultures to get a look so you will have to be quick.

Wait by the car and be the first to look inside. Once again, follow our used car checklist as best as you can; look for warning lights, check the operation of the air-con and electrics, rev the engine, look for as much as you can as quickly as possible. Open the bonnet and check the fluids, listen for any nasty noises, do whatever you can but do it quick. You will not get long.

Some used car auction companies do not like and often have a policy against people getting in their cars but due to the amount of cars and grumpy motor traders they have to deal with, they generally cannot regulate this. So just dive in and if a member of staff asks you to get out of a car, smile and say, “I’ll be two seconds mate”. If they still ask you to get out then apologise and say it’s your first auction. In most cases they give up and carry on unlocking the next car.

Believe me, this is not for the feint hearted. You must be prepared to mix it with the traders and tread on a few toes in the rush to look at the cars. Just remember that you are spending a lot of your hard earned cash and you want to minimise your risks. So don’t be shy and get stuck right in.

If at any point any alarm bells ring about a car then just walk away from it. There is always an element of risk at any used car auction but there is no reason to gamble unnecessarily.

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If you do not have a trade price guide such as CAP black book or Glasses guide then it can be difficult to price a car. As these guides are very expensive (around �300-�500,) they are not a practical option for the private buyer. There are cheaper price guides available but they do not generally give used car auction prices. They do however give approximations of trade, retail and part exchange prices. Don’t rely solely on these guides though, as they can often be way off the mark when it comes to used car auction prices. Your best bet is to look at the suggested retail price of a car then decide how much you would want to save by buying it at auction. Bear in mind the risk you are taking and remember that you may have hidden expenses.

I wouldn’t buy at auction unless I was going to save at least �1500 on the retail price, even more for cars with higher maintenance costs. At least then you have a bit to play with if the car needs anything doing to it. Also remember that; no service history, short or no MOT and no registration document present, can all affect the value of the car.

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There are many theories about the best way to bid at a used car auction. Some people like to let others bid first and then come in at the last minute. The danger with this is that the current highest bidder may think they have bought the car and then carry on bidding to stop you stealing it from them. Private customers get much more emotionally involved than traders and once they start bidding they get very determined to buy the car.

Personally I like to get a bid in early and bid quickly and positively. Let people know you are serious about bidding on the car. Leaving big pauses between your bids gives other bidders time to step in and could push the price up. The fewer people involved in the bidding the better.

Listen to the auctioneer; they will indicate if the car has met reserve price by saying “its on sale”. If he says “ we are nowhere near” or words to that effect, then that means the bidding has not got close to the reserve.

If the car you are bidding on is from a major company then they will generally have a representative there who will stand close to the auctioneer and will tell them to “sell the car”. They do this sometimes even if the reserve has not been met but is very close.

Try not to be the very first to bid, the auctioneer will try to start the bidding at a price close to the reserve, usually there are no takers. He will then try a lower start price or encourage the bidders to offer a start price. He might even try to bid “off the wall” to get things going. Once bidding is underway then get your bid in clearly and quickly.

Whatever tactics people use at used car auctions the golden rule is to set your price and stick to it. This sounds so simple but for most people it is the most difficult rule to stick to, especially for first time private buyers. I have seen used cars at auction sell for retail price because a couple of private buyers have got carried away. Don’t get attached to the car before you have bought it.

Once you are involved in the bidding keep your target price in mind. As you get closer to your price, start to slow down your bidding. You can even start bidding in smaller increments (You can do this by making a cutting sign with your hand to the auctioneer, this will halve the amount of your next bid). Try to wind the bidding down by showing less interest, reducing the increments and taking longer to bid. If the bidding carries on past your price then drop out and walk away.

If you are the highest bidder and the hammer falls then you will either have bought the car or the reserve will have not been met and you will be the highest provisional bidder. Either way you will have to go the rostrum and give your details and a deposit. In the case of a provisional bid the auction house will contact the seller and see if they will accept your bid. If they don’t then you will have an opportunity to negotiate a deal with them.

If you are successful you will have to pay for the car the same day and will be given the keys and documents. Make sure you check what payment methods are acceptable with the auction house before bidding.

If you are well prepared, cautious and calculated you could get your self a real bargain at a used car auction. You could keep the car for a year and sell it on for what you paid for it. If you did this every year you would save thousands of pounds in depreciation. Or you could sell it in six months and make a small profit. You may find you are really good at spotting the bargains and fancy a career in the trade.

No matter how careful you are however, you could end up buying a lemon. Even the professional traders get caught out sometimes. If you follow our advice this should not happen but used car auctions always contain an element of risk. If you buy a car that needs too much money spending on it to make it financially viable then there is only one thing I would suggest. Cut your losses and put it back into auction. You may loose money after all your fees etc, but it’s the only sensible way out.

We hope you have found our used car auction guide useful and informative. If you decide that buying a used car at auction appeals to you then good luck and remember; it can be great fun AND financially rewarding but watch out for those lemons!