Action Steps
The best contacts and resources to help you get it done

Find a public auto auction

Sometimes public auto auctions are advertised in the newspaper, but you can do just as well by using the Internet to locate auctions in your area. If you are having trouble finding a vehicle auction, consider attending a repo car auction or one of a few online car auctions.

I recommend: Visit Capital Auto Auction to locate public auto auctions on the East Coast. Capital Auto Auction also provides links to view automobiles offered at each auto auction and offers online auto auctions for anyone who is not able to physically attend. GovAuctions.org offers a selection of seized and repossessed vehicles automobile auctions.

Research the makes and models of cars available before attending the auction

Since you have to be on your toes at an auction paying attention to both prices and bidding wars, you need to know what vehicles are of interest to you and which ones will fit the budget and needs of your used automobile lot and it's customers. It pays off to spend some pre-auction time researching what each auto auction offers in the lines of cars, vans, trucks and SUVs.

I recommend: For auction attendees in the Southeast, Verastar offers a search feature that lets you see all the vehicles available at their auctions to search for a specific type of vehicle. If you live in the Northeast, the New York Auto Auction gives you a complete inventory of all vehicles up for auction.

Compare auto auction prices to reputable car price guides

When you attend an auto auction, you can expect the prices to be lower than what you would see either at your own used automobile lot or at a competitor's lot. The only way to know for sure that the price is low enough to be considered a good deal is to do your research and compare the prices at the automobile auction to those found in a reputable used car price guide. If the price is too high, you may not be able to turn a profit on it when you go to sell it on your lot.

I recommend: Use Kelley Blue Book to compare the prices at the automobile auction with the book value of the automobile. Kelley Blue Books can be purchased to take with you to the auction or you can use the Internet site prior to attending. NADA Guides also offers used car pricing and book values for use in comparison to auto auction prices.

Helpful advice for making the most of this Guide

• •  On the day of the auto auction, make sure you have a valid driver's license with you.
• •  If there is a car that you intend to purchase, be sure to have the deposit amount in the approved payment form.

Guide to Auto Auctions

Public auto auctions offer great deals for those not faint at heart

By Ned Averill-Snell

1. Gain entry: Some auto auctions --such as 'wholesale' or 'salvage' auctions -- admit only licensed dealers, but others are 'public auto auctions' 'police auctions' or 'government auto auctions' open to anyone. You'll still have to register (online or onsite) to get in.
2. Research & Inspect: You may find some information about the cars online before the auto auction day. On the auto auction day, you will have an opportunity to check a car over before bidding. How much opportunity varies -- some car auctions don't make a car available for inspection until shortly before bidding, and often you won't get a chance to drive. If you have access to a computer between the time you learn the car's Vehicle Identification Number (VIN) and bidding, you can run an AutoCheck or Carfax history report.
3. Bid: Once the car auction auctioneer opens bidding on a car, just raise you hand whenever he or she calls out an amount you are willing to bid. Assistants are usually on-hand to make notes of bids.
4. Pay: When the auto auction closes, if the auctioneer declares the car 'sold!' to you, you'll need cash, a casher's check or a credit card to cover not only the amount you bid plus sales tax, but often also another 5-10 percent of the bid amount in a 'buyer's premium.' Acceptable payment methods and any fees or premiums should all have been spelled out for you at registration; keep them in mind when bidding.

Action Steps
The best contacts and resources to help you get it done

Visit multi-source public auto auctions

There are third-party car auction companies that gather together used cars from a wide range of commercial sources: retired fleet, lease, and rental cars; cars repossessed by banks; and cars taken in trade by dealers ('consignment' cars) who expect to get a better price at auction than on the lot. They auction these at huge circus-style events (with hot dog vendors and balloons!). You'll find the greatest range of choices in model, age and condition at such auctions, but may learn less about a car's source and history than you would at more focused auto auction. The auctioneers have a lot of cars to sell, so things move fast.

I recommend: If you live in the area, check out the New York Auto auction; before going, you can even apply online for financing. Verastar hold auctions all around the southeast, while Brasher's holds events in California and all around the Northwest. The National Independent Automobile Dealers Association has a directory of auto auctions by state.

Tap into government auto auctions and police auctions

Just as with rental agencies, government agencies auction off cars after they have exceeded a certain mileage limit. At police auctions, police departments auction off their older cruisers and vans, as well as vehicles they have seized from criminals.

I recommend: The U.S. Government Services Administration sells its retired fleet vehicles (40,000 per year) at government auto auctions held around the country. CheapCarFinder.com offers one-stop shopping for repossessed and seized vehicles, by ZIP code, as do Gov-Auctions.org and AutoBeyond.com.

Surf to online car auctions

The first name you may think of when thinking online auction is eBay, and indeed eBay Motors auctions vehicles for dealers and private parties. But there are many more online public auto auctions specializing in used cars and/or trucks, as well as online dealers who sell direct online and ship cars nationally. The obvious extra gamble to online car auctions is that you can't examine the actual car (except in photos) before bidding, unless the car resides nearby and the seller is willing to show it. Some sellers will offer an inspection period after you win the vehicle; if there are any major defects the seller did not disclose up front, you can cancel the deal. Bear in mind that if you buy a car from far away, you'll have the additional expense of having it delivered or traveling to pick it up.

I recommend: In addition to eBay Motors, you'll find Monster Motors. Proxibid gives you live, online access to bid on live auto auctions as they happen.

Helpful advice for making the most of this Guide

• •  Cars sold at auctions may not have clear titles, leaving the buyer to straighten out title issues after the sale. The car auction is required to notify you of title troubles in advance; some use a system of colored lights to describe title status: green means clear title, yellow means there may be some small problems, red means no title available.
• •  Have a recent used-car price guide, such as the Kelley Blue Book, handy so you can look up the book value of a car while at an auto auction, where you should always expect to pay well under the book value.
• •  When buying from an online auto auction, you may be able to limit your search to cars for sale within your geographical area, so you can check them out before bidding.

Guide to Using Auto Auctions

How to make sure you don't buy a lemon at automotive auctions

By Michelle Cramer

Action Steps
The best contacts and resources to help you get it done

Arrive at public auto auctions early

It's a good idea to arrive an hour or two early at a live auto auction. This gives you the opportunity to take your time viewing the available vehicles, without the hassle of crowds, so that you can make completely educated decisions about your purchase. Take a Kelly Bluebook, Edmunds book or NADA guide with you to determine the average resale value of the vehicle, so you can make sure you don't overbid.

I recommend: Refer to CarBuyingTips.com for a guide on used car auto auctions for a variety of recommendations to make sure you get the best, and most reliable, deal on your purchase. The New York Better Business Bureau warns about advertisements and claims about auto auctions that consumers should be aware of beforehand.

Examine vehicles thoroughly before considering an auto auction bid

There are a number of things you should look for on cars you have interest in purchasing to make sure they're worth it. While you can't test drive the car, you can run some basic diagnostic checks to make sure it works sufficiently. For online auto auctions, you're bidding on a car that you can't see, so you have to trust the seller's information. Ask the seller every question you can think of about the car before bidding. You should also check into the auction site's buyer protection policy.

I recommend: Auto Broker Magic provides a list of things to test in order to separate the good vehicles from the bad. ConsumerReports.org offers helpful advice to make sure the vehicle isn’t a lemon.

Run the VIN through a history check before purchasing from automotive auctions

Before the auction, whether public or online, sign up for a vehicle history report account with a reputable provider, preferably with the ability to run multiple reports, since you will be looking at a lot of vehicles. Take a pocket PC with you to live auctions (or keep a friend on call that has Internet access). When you find a vehicle that you like, run the VIN number through the vehicle history report service and make sure it hasn't had extensive damage or other value degrading incidents. The auction company or seller might provide a history report, but you can't be certain it's accurate, so it's better to run your own.

I recommend: Visit DMV.org to find out what information a vehicle history report provides to you. AutoCheck offers unlimited reports for 90 days for around $25.

Helpful advice for making the most of this Guide

• •  Remember that you must pay a buyer's premium on top of your winning bid at live automobile auctions. Basically, this is a fee to the auctioneer, usually between 5% and 10% of the selling price. So, if your winning bid is $5,000 for a car, you will be paying an additional $250 to $500.

Guide to Auto Auctions Key Terms

Understand auto auctions better so you're sure to get a great deal

By Michelle Cramer

Action Steps
The best contacts and resources to help you get it done

Types of auctions

There are several types of auto auctions you should be aware of. A public auction is, obviously, open to the public. Bidders can attend a private auction by invitation only. Preset auctions mean that even if someone bids only a dollar on a vehicle, the auctioneer must accept it. In the alternative, vehicles in a reserve auction must meet a reserve price to sell.

I recommend: Auto Beyond offers more information on the different types of auto auctions.

Salvage

If you're looking to purchase a vehicle and the auctioneer mentions it is a salvage title, buyer beware. A salvage vehicle is a car that was in an accident and totaled, but repaired.

I recommend: AutoCheck provides more details as to why you should be careful about purchasing a salvage title vehicle.

MSRP

MSRP stands for manufacturer's suggested retail price. If you own a car dealership and are attending an auction to supply your used car lot, be sure that you're aware of a vehicle's MSRP to determine if you can make a profit.

I recommend: Obtain more information on MSRP from Autotropolis.

Buyer's premium

When you purchase a vehicle at an auto auction, your bidding price isn't all you pay. You have to pay taxes as well as a buyer's premium. A buyer's premium is a fee the auctioning company charges for its services. It's either a flat fee or a percentage of the sale.

I recommend: Car Buying Tips explains the buyer's premium in its auto auction advice section. Scroll down to the section entitled "The price you pay for the car is always higher than what you bid!"

VIN

VIN stands for vehicle identification number, which is placed on a vehicle when it's manufactured and is as significant as a fingerprint. Every incident that a vehicle goes through attaches to the VIN, and you can research these things when looking to purchase a vehicle at an auto auction to make sure it's a worthwhile purchase.

I recommend: Auto Insurance Tips helps you understand and decode a vehicle's VIN.

Abbreviations

There are several abbreviations that may be listed on a vehicle's information sheet at an auction. Some of these abbreviations may include 'ADJ' for adjustable, 'BS' for bucket seats, 'FI' for fuel injection and 'LIC' for license.

I recommend: Go to GSA Auctions for a full list of abbreviations that auctioneers may use in written vehicle descriptions.