How to buy a vehicle at auction
If you’re searching for a set of wheels without the big price tag, buying at auction could be your opportunity to drive away with a bargain, but only if you play your cards right. A vehicle purchase is a big deal, even if you’re buying it cheaper, and can have a lasting impact on your finances. Before you bid, know what the pitfalls are and what you’re signing up for.
Are auction vehicles worth it
The vehicles available at auction come either from banks or financial institutions that have repossessed a vehicle due to owners defaulting on payments or from private sellers who want to capitalise on getting multiple buyers in the room at the same time and speed up the sale.
Since the financial institution wants to recoup the outstanding money, you might be able to get a deal on a car for less than its retail value, but it’s not guaranteed. The biggest risk with a repo is that you can’t test-drive the car and you can only take it at face value. Therefore, it’s in your best interests to do your homework before you place a bid:
- The market value: Is this price realistic, a good deal or too good to be true?
- The condition and mileage: Has the vehicle been maintained, and is there a service record?
- Potential faults: If anything is wrong with the car, how much will it cost to fix?
- Warranties and/or maintenance/service plans: This could save you money later.
How vehicle auctions work
Understanding the process of buying a vehicle at auction will help you be better prepared and improve your chances of making a successful bid on a worthwhile purchase.
Find a vehicle
- Make sure the dealer is reputable and the vehicle meets your criteria.
Register
- Provide the required documents (ID, proof of residence and bank statements to show affordability) and necessary auction house paperwork.
- Pay the registration fee, which is refundable if your bid was unsuccessful or if you didn’t bid.
Get a bidding number
- Once you’ve registered and paid, you’ll receive a bidding number to take part in the auction.
- Be sure before you bid on a vehicle. The deal is sealed when the hammer falls. It’s best to have a budget in mind and stick to it.
Have the cash sorted
- Ensure you have the necessary financing or cash. Depending on the type of vehicle and the price, you can apply for a personal loan or vehicle financing.
- Use one of our calculators to see how much you qualify for, and the repayment terms you can expect.
Read the fine print
- Understand all the terms and conditions.
- Check that licensing, registration and roadworthiness are up to date.
- Factor in VAT, buyer’s commission and other costs.
Top tips before you bid
Auction houses usually hold viewing days before each auction. If there’s a car you’re interested in, take note of the vehicle identification number (VIN) and research the car’s history.
It’s worth taking someone along, such as an experienced mechanic or someone who has knowledge about cars, to fully inspect the car. Remember, you buy the vehicle as is.
Attending a few auctions as an observer will help you familiarise yourself with the process and possibly prevent you from getting carried away and suffering from buyer’s remorse later.