If you know what you're doing, auto auctions can be a great way to purchase a vehicle for your delivery business, a car for business travel or other company needs. There are several terms in auto auctions that you should know in order to make sure you don't get cheated, including the different types of auto auctions and vehicle description terms.
Types of auctionsThere 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.
SalvageIf 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.
MSRPMSRP 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.
Buyer's premiumWhen 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.
VINVIN 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.
AbbreviationsThere 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.
GSA Auctions for a full list of abbreviations that auctioneers may use in written vehicle descriptions.