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Buying a Used Car at a Wholesale Auction (Part 1) The Basics to Finding a Good Deal for That Dream Car

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Updated November 15th, 2020

Purchasing a new-to-you used car can be a real hassle. You have little to no idea as to what you’re really getting, and it sure seems like dealers and private owners are both a little prouder of their cars than they have any right to be.

Top Online Auto Auction Websites

RankTop Car Auction Website
1Salvage Bid
5Auction Auto USA
6Auto Trader
7eBay Motors
8US Marshals Service
9GSA Auctions
10Insurance Auctions USA Inc.

That’s why buying a car at a wholesale auction can be such an attractive alternative. You can get a great used car at an even better price – provided you know what you’re doing, of course. This three-part series will walk you through the process, so you can look like a pro at your next auction.

Why an Auction? Be Keen to Get Really Good Deals

The great thing about auctions is you can set your own price for the car. You simply do your homework ahead of time and figure out how much the car you want is really worth – and then decide how much you’re willing to pay.

Used car at a car auction

You can get all types of cars at an auction. Photo by John Lloyd (Creative Commons)

Automobile Auctions Can be Hassle Free, Know What you Are Doing

What makes auctions so hassle-free, however, is the fact that no one has any skin in the game yet. This means you don’t have to haggle with a dealer that’s aggressively trying to protect his margin, and you don’t have to worry about getting caught in a bidding war since there are so many cars up for grabs.

This is especially true since most of the people you’ll be bidding against are big-time dealers. They’re here to get as many good deals as they can, so if you seem like you’re willing to go to war over a certain car, they’re just going to shrug and move on.

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Compare that to haggling at a dealership – it’s like night and day in terms of stress. The cars you see at a dealership represent a sunk cost for them, and they’ll do whatever it takes to get their money back – at your expense, of course.

Once You Go To An Auction it Could be the Only Way You Buy Ever

After you buy your first car at an auction, don’t be surprised if you vow never to go back to another dealership again.

Checking Transmission Fluid in a vehicle.

Image Credit: Samarins.com

Note: When buying a car at an auction (or buying a used vehicle) be sure to check the oil and transmission fluid. Transmission fluid should be clean and transparent.

However, there is a catch – you absolutely must do your research beforehand. Many manufacturers look to prey on consumers who think that, just because it’s wholesale, it must be a great deal. They then deliberately set the floors of some prices absurdly high, so you could overpay if you’re not careful.

Top Tips To Buy At a Car Auction

 Top Tips To Buy At a Car Auction
1Be Honest With Yourself
2Be Vigilant
3But Don't Believe Everything You See
4Check the VIN
5Pull the Dipsticks
6Know Car Values Before You Bid
7"As Is" Means "As Is"
8Observe Other Bidders
9Don't Get Caught Up in the Bidding

Just do your homework, figure out how much the car’s worth before you get there, and stick to your budget.

Are the Cars at Auctions as Good as Cars at Dealerships?

In a word, yes. As a matter of fact, where do you think dealers get most of their used cars? They’re here at the auctions, bidding against everyone else!

Most wholesalers will provide you with an exhaustive amount of information about the cars you’ll be bidding on – their ownership history, any scratches or dings, and major repairs.

Be Prepared & Do Your Homework Before the Auction

Again, though, you have to do your homework here as well. Don’t skim the vehicle information – really take the time to study it. There can be things in there that can be expensive if you miss them; for example, they’ll list the number of keys the vehicle comes with. If you buy one without any keys, you have to pay to have them made – and that can cost up to $750 per key, so factor that into your budget.

Final Thoughts & on to Part 2

Ultimately, though, buying from an auction is like buying from a dealer – research the car before you buy, and you’ll probably be fine.

In part 2 of this series, we’ll talk about the actual auction experience itself, so you can bid confidently for your next car.

Shaun Fyffe

Shaun Fyffe

Shaun is an auto insurance expert with ten years of experience as a researcher and content writer. He's fluent in Spanish, teaching it plus AP computer science at Nyack Public Schools in New York. He has a B.A. in Spanish, B.S. in computer science from Florida State University, and an M.A. from SUNY New Paltz. He also is the lead editor for AutoInsureSavings.org.

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