The Quick and Easy Guide to Car Auctions

The Quick and Easy Guide to Car Auctions Table of Contents I. An Amateur's Overview of Car Auctions a. Three Simple and Easy Facts About Car Auctions b. What You Need to Know When Buying Cars at Auction II. Standard Kinds of Auto Auctions a. Salvage and Insurance Auctions – only open to dealers b. Government and Law Enforcement Auctions – open to anyone c. Public Auto Auctions – open to any consumer d. Auto Auction Wholesale – dealer to dealer e. Auto Auctions Online like Yahoo Auctions and eBay Motors III. The Process of the Auction a. Green, Yellow, Red Light IV. Things to Remember a. Being a Beginner b. Advantages and Disadvantages of Purchasing Cars at Auction c. Easy Things to Check V. Tips for Used Car Shoppers

An Amateur's Overview of Car Auctions There's a misconception out there that car auctions are only for people in the trade. Read this guide to learn how to nab a motor at a bargain price.

Before we get into the nitty gritty details of auctions and potential problems, it's important to know that all of these problems can easily be avoided by heading to reputable auction houses. One of the most reputable places to bid on cars is BNO.com. BNO has a unique Auto Protection Policy that supplies bidders with full refunds if there are any problems with your new vehicle.

Many people avoid the auction houses when it comes to purchasing vehicles, believing they are mainly for trade customers. However, auction houses are really trying to change this perception. Auction houses welcome newbies with open arms.

Being Smart with Your Money Nowadays, it seems that people are more privy to the idea that the used car they buy from a car garage is most likely from an auction in the first place and they've marked-up the price.

Buyers are becoming smarter and realize that they can make a significant savings coming to the auction from the get-go.

Be Money Savvy There is money to be saved at auction. Period. The cars that are normally up for auction are part-exchange vehicles. For instance, if a Toyota dealership winds up with a different make because of a part-exchange, they have to get rid of it, therefore they will sell it at auction.

Many dealerships end up with old stock which they also need to get rid of to make room for brand-new models.

Three Simple and Easy Facts on Car Auctions • Use the Internet... The internet is a great way to learn both sides of the auction story.

The internet has a wealth of information about vehicles and ways to save money on new or old cars. The internet is your most powerful resource.

• Do Your Homework… Research, price other sources and learn everything you can beforehand.

• Carfax... If you're purchasing a used car, make sure you've viewed the car's history.

These reports will let you see how many accidents it was involved in, important maintenance and mechanical info and how many people have previously owned the vehicle.

What You Need to Know When Buying Cars at Auction • There's Always a Set Order for Cars... Get there early and know when your favorites will be up. You can normally get a copy of the list when you first arrive. If you're late, you might not have the opportunity to examine the car you like.

• It's Gonna Get Wild... The general intensity in the atmosphere could pressure you into feeling rushed, so have the personal wherewithal to think calmly if you have a bad feeling about a certain car. You'd much rather walk away from the situation, than have a bad car that won't sell.

• Have a Limit. Stick to It... It's also good practice not to go with a “special friend” you're trying to impress or drink a lot beforehand. You'll want to be clear-headed.

• You're Going to Need Cash... or a loan if your bid wins. If you have secured a loan from your bank, you should plan to cover a deposit if the bid you placed wins. You need to know which credit and debit cards are approved. Also registration, taxes and title fees will occur. It will most likely be necessary to have comprehensive and/or collision insurance by the lending agency if your plan is to finance the purchase of your car. And seriously consider speaking with an independent agent to assist you in finding car insurance quotes before your purchase. These agents work with numerous insurers and can comparison shop - all for no additional cost!

• Don't Forget to Leave Room for Shipping Costs... Just don't forget!

• Don't Let the Shiny Polish Fool You... Most cars will be well maintained and in solid

condition. However, don’t think that the nice exterior guarantees a good car. ALWAYS be sure to look at the car history and make sure the points of identification all have matching VINs. • Make a buddy tag along… It might be a good idea to bring a friend who knows a lot about cars.

• The best inventory and prices are normally owned by banks… These are the kinds of cars to look for at public auction. Repossessed cars and trucks are normally the vehicles that the lender wants to sell at a reasonable price to recover losses.

• Take a second look at car dealers who sell at auction... The majority of used car dealers will want to sell to customers, other dealers or at auctions for dealers. If a car can't sell in one of those methods, they'll generally consider the public auction. It's imperative to thoroughly inspect a used car dealer's offers.

Standard Kinds of Auto Auctions There are many different kinds of car auctions. However, we're going to cover the four categories of auctions that need further explaining.

Here's the list: • Salvage and Insurance Auctions – only open to dealers • Government and Law Enforcement Auctions – open to anyone • Auto Auction Wholesale – dealer to dealer • Auto Auctions Online like Yahoo Auctions and eBay Motors Salvage and Insurance Auctions – only open to dealers This is a whole other ball game. These auctions are rarely open to the public. These cars have undergone real damage. Steer clear!

Government and Law Enforcement Auctions – open to anyone In government auctions, the cars that are normally present are decommissioned or government-seized vehicles that the agencies don't use anymore. It is possible that impounded vehicles might have been sitting in a lot for a year without maintenance. Another issue to keep in mind is that confiscated cars could have serious problems with title issues.

Run a history report on them to see if you'll be able to take the title. Don't forget that these cars are sold with no warranty.

Auto Auction Wholesale – dealer to dealer These types of auctions are only open to car dealers. The cars at these auctions, fall into these categories: • Returned cars once lease expires.

• Rental cars from agencies • New or used exotic cars from collector dealers.

• Used cars that are older than four years.

I'll just go to a wholesale auction and purchase my car there, right!?

Unfortunately, you can't just walk in and go shopping. You have to be a licensed dealer. A way around this, is if you know of a licensed dealer. You can simply tell your friend which car you want and have him/her buy it.

The Black Book The black book in this instance is not a place to keep track of your romantic dates. You'll most likely witness dealers walking around with these books – they are small and updated monthly with selling prices from auctions at wholesale. It lists the majority of vehicle models, makes, estimates on prices, and whether the vehicle is in good, fair or bad condition. Many of these dealers will want to pay less on a car than the black book price. This will ensure that they are getting a great deal.

Auto Auctions Online like Yahoo Auctions and eBay Motors Yahoo and eBay Auctions All of these car auction tips go for eBay auctions too. Attempt to get the VIN of the car from the eBay seller, this way you can check into the history beforehand.

It's important to remember that if you place the winning bid, you are contractually required to buy the car. Don't bid unless you're absolutely certain. EBay has an escrow service where the seller is not paid until the buyer has received the vehicle. An inspection period can also be agreed upon between buyer and seller. A certified mechanic will examine the car and see if there are damages or necessary repairs that the seller overlooked purposefully or otherwise.

These are just a few of the problems that can occur when you can't buy the car in person.

Things to lookout for • You can't make the buy in-person.

• Vin numbers aren't always listed, or a potential fake could be used. Run a title check on the number to verify.

• You may find that some sellers don't write the right engine configuration, model or ear.

Auto Check Report will help here. • Sellers could very easily shill bid, meaning falsely bid under other accounts to have the bidding price go up. Just know your limit and stick to it. • You might have to pay shipping fees or go across the country to retrieve the vehicle.

The Process of the Auction This is the image of most auctions: several lively lanes going simultaneously with their own auctions running. The auctioneer will be talking extremely fast as I'm sure you're aware. It takes most people around 20 minutes to comprehend what he's saying. The car will drive through the lane to be bid on and hordes of potential bidders will swarm the vehicle. Some potential buyers will use their Alcometers on the body to determine thickness of paint as well as opening trunks and hoods for signs of damage... Seems hectic, right? This isn't the time to begin your examination of the car. It's imperative you get there early and do it then. Quick tip: Call the Better Business Bureau and check up on the used car dealer before you buy.

Green Light, Yellow Light, Red Light A traffic light normally rests behind the auctioneer. These lights signify the status of the car's title. Be sure that when they write the purchase up, they include the color of the light on the contract. If they write down green, then that title better not have any problems!

Green Light – No problems whatsoever with the title.

Yellow Light – This normally means one of two things. There might be frame damage but the kind that won't brand the title, or the title is still in transit.

Red Light – There are problems with the title, it's rebuilt, mileage is inaccurate or another irritating issue. The price usually drops around 30 percent. Rebuilt car = Bad news.

Things to Remember Being a Beginner Do your homework! Go to an auction beforehand as a trial run to get accustomed to things.

See what kind of car you'd want to buy and find out what its final auction price is.

Ask Questions If you don't know much about vehicles in general, bring someone who understands cars.

Sales staff will be present, so feel free to ask as many questions as you want. Read the description, see how the engine sounds, and look under the hood.

Check Out the Fine Print Every auction will have its own rules, fees, guidelines on how to complete purchases, and its terms and conditions. Once again, make certain to read the info prior to the auction so you're prepared. Some auction houses ask for a deposit 48 hours later. If you have the money with you, you can immediately leave with the car.

Have a Budget. Stick to it.

If you miss out on a car you want, don’t worry. There will be a next time. Besides, if you do the proper research, you'll know about how much the car will sell for next time.

Insurance Costs If you know how much the car insurance will be, you'll have a better understanding of the cost overall.

Make Your Bid Seen This is simple but needs to be said. Be very clear and persistent when raising your arm so that the auctioneer sees your bid.

Car Insurance This is important because you'll need insurance to legally drive away in your new car. You can set up temporary car insurance coverage with a series of providers.

Easy Things to Check • You can determine if the car has bad alignment, perhaps from a car wreck, if the tire wear is uneven or bald on all four tires.

• Damaged wheel rims not facing potential buyers.

• The VIN number stickers all over the car don't match. This means the vehicle could be stolen or wrecked.

• Red light titles. Steer clear of “title in transit” vehicles.

• Excessive dings, dents, scratches and so on.

• Check for paint over-spray. Common problem areas: door seams, door edges, engine compartment and along the windshield.

• A/C not working.

• Too much exhaust from muffler.

• Convertible top doesn't work.

• Check the windows. Power windows could be malfunctioning. Also, loose or crooked windows spell trouble.

• Check for hand-applied seal to hole up window leaks.

• Too much mileage for the car's age.

• Lastly, go with your instincts. If something doesn't feel legitimate – walk.

Advantages and Disadvantages of Purchasing Cars at Auction Advantages Price • Cars at auctions are usually much cheaper than cars sold at normal dealerships and distributors.

• This includes the best models and car brands at solid prices.

• The possibility of reasonably priced vintage cars that could be considered collectors' items.

Volume • Lots of cars. Lots of variety. Auctions are happening across the U.S. as you read this. If you don't see the car that you want, there's a chance you could find something better or simply wait a week or a month for the model to become available.

• The cars are usually somewhat new and in solid condition. While this isn't always true, it more often than not is. Also, most auctions already have history reports available or for perusal.

• If you're a collector or someone on the lookout for a rare vehicle, an auction may be your best chance to find it. The advantage is that you'll be against a potentially small pool of bidders.

More Good Stuff • At dealer-only auctions, you pay for the car and then simply take it home.

• Auction companies have created a well-developed, efficient sales system to resell cars.

• The cars are well maintained and independent reviews of a car's condition are normally a requirement before selling it.

• Open to anyone... The only requirement is that you have money and are over 18.

Disadvantages • You must do research.

• Normal dealers and distributors will have insurance coverage and warranties. Nearly all cars at auction come in “as is condition,” meaning that they will come with neither.

However, as mentioned earlier, BNO.com comes with a great Auto Buyer’s Protection Buyer Policy.

• Sales claims that are not based in fact like, “This car's a great bargain!” Aren't exactly dishonest, but a little meaningless. If you've done your research, you'll know what's a great bargain and what isn't. A salesperson can say whatever he/she wants about a car to make a sale.

• A LOT of car auctions are cash only. This could potentially be an issue for you.

• Fees will be added to the bidding price.

• Inspect the car, make an educated guess beforehand, but test driving a car at auction is rare.

• A private seller’s car's resale value is usually higher than a car that’s been constantly sold at auction.

Tips for Used Car Shoppers • Check up on the car dealer by calling the Better Business Bureau before you purchase.

• Be sure to check the title history with the Department of Motor Vehicles.

• Call the previous owner if you can and confirm mileage and condition.

• Verbal promises mean nothing. Get them in writing.

• If there's a deposit, have a sales contract approved by management. Get a receipt that lists the conditions for refund.

• Don't buy during conditions that can hinder examination – night, in the rain, sludge.

• Be sure to not sign a sales order with blank spaces.

• Report to the Department of Consumer Affairs if you experience any fraudulent used car sales.

Do You Want to Buy at Car Auctions?

This is all dependent on whether you're willing to do research, your knowledge of cars and of course sheer luck. If you're prepared and have a good eye, you could drive home with the steal of your life. However, it's important to remember that while there may be numerous great deals, there are sure to be a few rotten eggs present as well.

With that said, almost ALL of these problems can be avoided by going to reputable places.

One of the most reputable places when it comes to auctions is BNO.com. BNO is a live auction house where bidders can place bids from the comfort of their home.

BNO also has an Auto Buyer's Protection Policy. Buyers have 9 days from when the auction takes place, to view, visit, inspect AND test drive the vehicle. If for some reason, the description does not match the vehicle, the potential buyer will not have to complete the purchase. If there is an issue with the sale and it's not completed, the potential buyer gets a full refund. No questions asked.

Resource Links •

http://bno.com (Bid on or sell at BNO's live auctions, streamed online in real time. Art & Collectibles, Vehicles, Real Estate, Charity. Exciting, safe, low fees, great services)

• http://www.auctiondirectusa.com/ (At Auction Direct USA has cars in Jacksonville, FL, Raleigh NC, & Rochester NY.) • http://www.autotrader.com/car-auctions.jsp (Find used cars and new cars for sale at Autotrader.com) • http://http://www.carfax.com/ (Don’t run the risk of buying a used car with costly hidden problems. Shop with confidence for a car with the Carfax vehicle history that's right for you) • http://www.edmunds.com (Research new and used cars including car prices, view incentives and dealer inventory listings, compare vehicles, get car buying advice and reviews)