Since dealers don’t offer the best solutions to the average Joe that can’t afford to pull $20.000 for a decent new car, more and more clients have diverted their attention from dealers to auctions. Here we will some of the car auctions types, see the advantages and disadvantages of each type of auction and so on. Here you can answer the question “should I head for a car auction to buy my car?”
If we were to look in a dictionary, an auction is defined as a public sale in which valuable items are sold to the highest bidder. It may sound simple enough, but that word can cause a wide array of emotions starting from excitement to disappointment. The simple process of placing an ad in the paper can be an auction since you will eventually sell the car to the person that offers you the most for it.
Buying Car At Auction
When entering in an auction house don’t expect any solidarity because in a bid it’s every man for himself. Despite the fact that the laws might have intended to protect the customer, they actually protect those who rip off the customer. By the simple use of 2 words like “As Is” an excellent defense has been given to a defense lawyer that protects the seller. At some auction houses you may pay a fee to receive a 30 day “warranty” for the engine, frame and bodywork. Yet the phrase “Buyer Beware” becomes very important at auctions since you don’t have time to get a mechanic to check out the condition of the car. Therefore each car is sold “As Is” and no warranty to cover it. The deal is final without the possibility of undoing it, unless you find out that the title is fraudulent.
Sellers are completely free to make any kind of promise without having anything in writing. Since there is no written contract, you have only your word against theirs, and they win all the time, since they claimed you were warned that the car is sold “As Is”. Therefore you should always be careful around auctions. If you feel that something is wrong like a very low starting price, than you should follow that instinct. Don’t think that the law will protect you in case of any scams because they won’t and since there is no written condition, you only have your word in court. A lawyer won’t even bother to talk to you if your car is a common used one, and not something of real value from which he may take some profit.
Another thing that places you in a bit of a disadvantage is the fact that you will always pay more for your car than you’ve bid. These premiums represent the commissions the auction house earns from each bid. That premium can mean a hundred or two extra which is not bad, but other auction houses charge 5 or even 10% of the winning bid which is quite a lot. Think about it, you’ve just won a used Audi with a $20.000 bid and afterwards you find out that you’ve got to pull $1000 extra to finally get the car. Tactic works like magic since usually bidders get caught up in the race for the car, and they forget about other taxes and premiums that ultimately go to the auction house. That premium may tip the price over a reasonable price, and you can’t back out either since you have been the designated winner. The same thing you could’ve obtained at a used car dealer