Bidding on Repossessed Car Auctions

How to Bid at Repossessed Car Auctions

Successful bidding at repossessed car auctions starts well before attending the actual auction. Just showing up can lead to overbidding, buying the wrong car, or getting stuck with a lemon. While going to an auction without planning to bid on anything can be a good way to get a feel for the process and be more confident when you are ready to bid, being prepared is always a good idea.

1.  Pick an auction to attend.

Though they are not widely advertised, it is getting easier to find repossessed car auctions. Check with banks and other lenders to find out how they sell off their vehicles. Look for auction ads in local newspapers. Check online for announcements and repo car listings. Some websites will offer to send notices of new auctions or search for particular vehicles, usually for a fee or paid membership, but it can be well worth the cost to find out about additional auctions you would have a hard time hearing about elsewhere. Call to confirm times, dates, listings, accepted forms of payment, any additional fees or services offered, and any other pertinent information.

2.  Attend the preview/inspection.

Auctions provide a time to look over vehicles and start them, though you will not be able to drive them. This can be 1-2 days or just a few hours before it begins. Plan for about 2 hours to give you enough time to carefully look at the vehicles. If the auction is completely as is, this will be your only chance to inspect the cars. Some auctions provide an optional post-inspection service (usually around a couple hundred dollars) and/or give you a period where you can return a car if you find major problems (usually up to 72 hours). Even if the auction does provide for post-bidding inspections, you definitely want to know beforehand the condition of the auto so you can determine a maximum bid.

3.  Register for the repo car auction.

Bring along a photo ID (driver’s license, passport, etc.) to register to bid before the auction begins. You may be given a numbered paddle to hold up when you want to make a bid or instructed to just raise your hand.

4.  Arrive at the auction early and prepared.

Have your financing arranged and make sure you have the payment in an accepted form, usually cash or bank/cashier’s check. Some may require payment in-full, but typically there is a required deposit (usually at least $500 but up to 10% of purchase price) with the rest due at a set time (from 24-72 hours after the auction). Make sure to get there early so you are calm and collected. Bidding tends to go fast; they have a lot of cars to get through. Bring your notes so you know which cars you want to bid on and how high you are willing to go. In general, you don’t want to bid more than trade-in value.

5.  Bid confidently.

When one of the cars you are interested is up for auction, double-check to make sure it is the right one and note your maximum bid so you can keep it in mind. Let someone else start the bidding and see how many other bidders jump in. If there is a lot of interest, it will probably go higher and you may do better to wait for another car. When you are ready to bid, be confident and make sure the auctioneer notices your bid. Typically the bids go up by $100, $250, or $500 each time. The car auctioneer will ask for any final bids before awarding it to the highest bidder. If you are the highest, you win the vehicle and must purchase it. You cannot withdraw a bid once you have made it, so make sure you really do want to buy the car before bidding.

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