It is essential for road safety that road users share our roads in vehicles that are roadworthy, well maintained and insured. Few vehicle owners are fortunate to buy a brand new vehicle. Most of us have to buy used cars out of hand, via a dealership or at an auction.
Buying a used car is however always a risk and something to be done with caution. Here are some of the pros and cons of buying vehicles at an auction.
Benefits of Buying Vehicles at an Auction
- Most buyers recognise that they may be able to buy a vehicle at much cheaper than if compared to cars sold at conventional car dealerships and distributors.
- This may be well below current market value. [Some estimate a potential saving as much as 30%]
- Retailers can’t compete with auction prices, so you could potentially find a well-conditioned car at a very reduced price.
- The buyer with the skills to repair the small dents and minor mechanical problems will quickly realise the true potential of a used car on auction.
- Some of these vehicles include vintage cars that could almost be seen as “collectors’ items”.
- Not all vehicles are ancient – the fortunate buyer may still be able to find a vehicle within warranty.
- There is usually a huge variety of the cars offered to attract as many potential buyers as possible to the auction.
- Some auction houses hold weekly used car auctions, selling everything from passenger and commercial vehicles, through to 4WDs, trucks and utility vehicles.
- The patient buyer willing to wait a week or a month may find that the exact model he desires becomes available rather soon.
- Ability to do research
- Many auction houses allow potential buyers to view information on the vehicles to be auctioned online prior to the auction.
- This could include condition reports detailing issues with the car – such as major mechanical problems, dents and any other damage.
- The information may allow the potential buyer to do some research and enquire from others as to what a fair value should be both for the vehicle and estimated costs of repair/ improvements.
- Fleet Vehicles
- There is some extra value for money to be found in auctions of government and fleet vehicles.
- Some corporates, organisations or state departments often update their vehicles after a set number of years or kilometres and put them up for auction.
- The main benefit of these vehicles is that their service history is often complete and documented – most companies service these vehicles in line with the manufacturer’s recommendations.
- The potential buyer may know exactly what the car’s been used for.
- Repossessed Vehicles
- Buyers may find good value in a repossessed car.
- Repossessed cars are often a favourite among buyers as there is less chance that anything is wrong with the vehicle.
- Repossessed vehicles are usually sold at auction so that the money can be recouped quickly, not because it can’t be sold elsewhere due to mechanical issues.
What to be Cautious of when Buying Vehicles at Auction
Best advice is to always have a “Buyer Beware” attitude and to question everything. Do not rely on verbal promises and don’t trust sales talk!
Sold “As Is””
- Keep in mind that the vehicle is sold as is – what you see is what you get.
- You cannot take the car from the auction site to be checked out by a mechanic elsewhere.
- The vehicle you want to buy may not be second hand but 3rd, 4th or 5th hand etc.
- Unlike when you buy from a licensed dealership, there are no warranties, cooling-off periods or guarantees.
- Even with some legislative protection, there is not much of a safety net.
- The time and energy spent to limit damages by relying on this protection may be little consolation once you have made the wrong purchase.
Looks Can Be Deceiving
- Sellers could go to great lengths [and some do] to hide flaws and make the vehicle look desirable.
- Even though the vehicle may look shiny and new it may not be in good mechanical condition.
- You may need to check the legalities and whether the vehicle is not illegal and that ownership may legally be transferred to you.
- A good way to check is via the VIN (Vehicle Identification Number) on the build plaque in the engine bay, on the passenger side windshield and also on any registration documents. The VIN should match – otherwise this means that major parts have been replaced, indicating a serious accident.
Seeing is Not Feeling
- Most auction houses don’t allow you to take vehicles for a drive before placing a bid.
- You are buying with your eyes and don’t get to feel how the vehicle drives.
- You can turn the car on, listen to the engine, check under the bonnet and view any log books if they’re available – but that’s often the extent of it.
- There may be hidden costs you are not aware of…
- Ensure that you confirm what the “processing” fees might be before you start bidding.
- Costs may include an auctioneer’s commission and fees of obtaining registration papers.
- Should the vehicle not have a roadworthy certificate, then you need to organise a way to get it home.
- Be prepared for the costs of a roadworthy test and expenses needed to get it in a roadworthy condition.
Fraudsters and Dishonesty
- We need to be alert of dishonest sellers, buyers and even facilitators.
- Keep in mind that odometers can lie and some vehicle owners are not as trustworthy as we would like to believe.
- At any auction, there’s also a risk that ‘dummy bidders’ will artificially inflate the price (even though it’s illegal).
- Stay alert to “ghost bidding” and “vendor bidding” and methods that could be used to drive prices higher.
Remember: Always question why a vehicle is sold at an auction, and whether it is not the last place to sell a car that cannot be sold elsewhere.
Source: Arrive Alive