As is often the case of something that is not widely understood, there is a lot of myths and misinformation that is often associated with auto auctions. As someone that has worked in the industry for a very long time, it is surprising how many of these myths are still around and repeated. More often than not, it is used car dealers themselves that perpetuate and spread this misinformation – usually starting with something like “I am a car dealer that goes to auto auctions, trust me I know…” If you made a living off of saving money at car auctions, wouldn’t you want to keep it secret, too?
Myth #1 – Car auctions sell vehicles for pennies on the dollar of their value
While you can save lots of money at a public car auction, most auctions will place minimum reserve prices on the car. The good news is that these prices tend to be much lower than what one might pay at a retail used car lot – in some cases, even thousands less. The key is to inspect the vehicle you are interested in as thoroughly as possible and then place your bid on what you perceive the value to be.
Myth #2 – Auto auctions only have damaged or wrecked cars or “Hurricane Katrina Cars” or cars with salvage titles
There are auctions specifically dedicated to wrecked cars that are sold to body shops for rebuilding or parts. On the other hand, there are lots of car auctions in the USA that sell new car trade-ins, repossessed cars, police impounds, private car sellers, etc. In this internet age, anyone can run a VIN history check on a car with their cell phone at an auto auction and know if the title is salvage or not – additionally, there are laws in most states that say that it must be declared on the bill of sale. With that said, you are not going to buy a wrecked or salvage car at an auction unless you are actively trying to.
Myth #3 – Car auctions move very fast and you do not have enough time to look at a vehicle before the bidding is already over
Every public car auction I have ever been to allows people to come early and look at the cars on the lot in daylight hours before the auction starts. It is very important that you take advantage of this opportunity. The easiest way to leave a car auction disappointed is to arrive late and hastily bid on a car or truck that you know very little about.
Myth #4 – Car auctions are intimidating and are “not for beginners”
Any successful public auction knows that the only way to last for long is to make that process as easy as possible for first time auction buyers. In fact, most auctions allow public buyers to make an offer on a car and buy it without even having to attend the auction.
This video shows a typical public auction. Compared to dealer only auctions, ones open to the public move much slower and bids are typically taken from auction ringleaders that help the public buyer interact with the auctioneer.
Most auctions are free to attend and can actually be a lot of fun – even if you do not end up buying a car. Some even offer the same warranties that used car lots offer on their inventory. Just be sure to research the auction and the vehicle that you plan to bid on.