Apr 10
22
You may have heard about the great deals on used cars that can be found at a repo car auction, but assumed that only licensed dealers could buy vehicles there. Or maybe you have heard about an auction that is open to the public, but you were unsure of how the auction worked.
The different types of repo car auctions are classified by two major things: who can attend and how the auction is run. Knowing how they work will give you the knowledge to successfully bid at these auctions so you can get a great car at a really low price.
Private vs. Public
Some auctions are private and only open to those invited. Auto auctions can also be closed to anyone who is not a licensed dealer. However, most repo car auctions are open to the public. Government run auctions that may include seized and surplus vehicles in addition to repossessed ones are open to anyone and can be a great place to find good prices.
While regulations vary from state to state, most let you sell a certain number of vehicles in a year without having to become a licensed automobile dealer. If you end up enjoying the auction process and the additional income that comes from reselling cars you found cheap at auction, getting your license may become necessary and also will make it possible for you to attend those auctions that are only for dealers.
Live, Silent and Online Auctions
Typically a repo car auction will be a live auction. You will be with all the other bidders, making bids until the auctioneer calls for a final bid. If no one outbids whoever is highest, that person will win the auction and buy the car for the price of his highest bid. Though the banks that repoed the autos typically request certain starting bids, once the car is being auctioned it will go to whoever bids most even if that bid is below market value. This provides an opportunity to get great deals. It can also be exciting and emotional, so be careful not to get too caught up in the bidding and overbid for a car. Getting into a bidding war usually means the price will go too high. Try to remember that there will be other cars available that you can get a better deal on when the bidding gets too high.
Sometimes repossessed vehicles are sold by silent auction where bids are placed in sealed envelopes until a certain time and then all the envelopes are opened. Whoever has bid the most buys the vehicle at that price. These auctions can be tricky since you want to bid high enough to be the highest but not overbid so much as to pay more than you should. Sometimes unpopular cars can be bought for very cheap if there are not very many bids, but this is also true with a live auction.
Online auctions allow you to bid conveniently from your computer. You can bid multiple times as others make higher bids just like in a live auction, but the auction typically lasts longer. Many sites allow you to set up your computer to keep increasing your bid to a pre-set maximum. Some will have reserves, which means no one will get to purchase the car if the bidding doesn’t reach a particular dollar amount. Unless you choose online auctions that are local and allow for inspection, you typically will not get to see the cars beforehand, so there is a lot of guesswork involved. Other auctions allow you to inspect the vehicles and note their condition and any repairs needed before you bid, so you can avoid the cars that need too much work.
If you decide to buy repo cars auction, consider going to a few different ones first to see how they work and what they are like so you are prepared to bid confidently and successfully at the next one.
More on Types of Car Auctions
Other Interesting Articles To Consider
How to Buy a Repossessed Car At Auction
Seven Secrets to Finding Online Auto Auctions
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