How often have you thought that there has to be another way of buying a used vehicle other than through a dealer or privately? If you go to an auction you might be able to get a vehicle for considerably less compared to a forecourt.
But to buy from an auction there is much you are going to learn. What follows is based on British Car Auctions, but the principles generally hold true for other auctioneers.
…lifting up bonnets, test drives or looking at the spare tyre. Vehicles are available to view beforehand and watch as they are driven through the auction, but that’s it. And from the time the vehicle enters the hall, you’ll have about 30 seconds to bid for what you want before the hammer drops.
It’s good to have an idea of what you want before you go so that you can look around the stock more quickly. It’s easier than you think to find target vehicles as auctioneers invariably have comprehensive websites that feature searchable stock locators on everything that’s about to go through auction.
Others, however, just have lists that can be emailed to those that sign up.
Remember that there may be late entries so it’s worth checking to see exactly what’s on offer. Critically, get to the auction early and look at the vehicles of interest, noting their lot numbers.
What is imperative is that before you get into the auction hall, you consider the maximum that you can afford. The vehicles are not bargains and they are certainly not cheap. The people who attend auctions are generally traders who come to make a living. They know what they are doing and are prepared to take a calculated risk when bidding. You’ll find it easy to get carried away with the bidding, so stick to your limit.
Above all, don’t get possessive about a vehicle –there will be more that day or at other sales.
As each vehicle is driven into the hall, the auctioneer will give a brief description of it in plain English. This will include the make, model and specification. The mileage will be described as “warranted/guaranteed” or “not warranted/guaranteed”. It may be described as having “no major mechanical faults” which means that the vehicle has a limited guarantee, or sold with “declared faults”, that the auctioneer will explain. It may be sold with a full or part-service history and with or without the V5 document (log book) and MOT. Younger vehicles may have the balance of the manufacturer’s warranty available, which may be transferable to the new owner.
Some are “sold as seen” which means no complaints will be entertained by the seller – whatever might be wrong with the vehicle. Try to avoid vans that have no documents or a chequered past, no matter how cheap they look – that is where the risks can increase.
The auctioneer will also mention how many previous owners there have been. Remember everything and make a note, because if the vehicle does not match the description, it could help you later.
To an extent, ignore black smoke from the exhaust as the vehicle is brought in, this may sound strange but often it is because the vehicle is running from cold. But do look for blue smoke as a sign of possible engine wear. You’ll have to watch and listen to the auctioneers carefully to follow the action, and to bid make a firm hand movement that the auctioneer can see. Note that bidding is done in £100 increments, but it is not unusual for £200, £500 or even £1,000 bids on high value vehicles.
Fees are added
Every vehicle bought from an auction is subject to a buyer’s fee. Further, commercial vehicles normally have VAT added to the auction price. The fee is compulsory and will cost you roughly 1-2% of the purchase price and covers against buying a vehicle which has outstanding finance or is found to be stolen; warranted mileage readings which prove to be inaccurate; and against vehicles not disclosed as insurance total write offs. In other words, it guarantees “Good Title”. Even so, don’t lose sight of the fact that you have fewer rights at an auction.
This fee is paid on top of the price you will pay when the hammer falls. It is the seller who pays the entry fee as well as a commission charge.
The hammer only falls when the vehicle is “sold”, otherwise the auctioneer states it has been “sold provisionally”. “Sold” means that you are the new owner of the vehicle, “provisionally” that you were the highest bidder, but the reserve price was not met. Here, the auctioneer will negotiate between you and the seller to try and reach a mutually acceptable price. If agreement is reached, the vehicle is yours. This is known as a Private Treaty Sale and is covered by the normal conditions of sale.
If the auctioneer announces that the vehicle is “sold” then you must pay a deposit to the Rostrum Clerk – either £500 or 20% of the vehicle’s sale price, which ever is the greater. You can use a debit or credit card, or even pay cash. If you use a cheque, you’ll have to wait until it clears before removing the vehicle. Remember to take a passport to prove your identity.
At the same time as arranging finance, make sure your insurance covers you to drive any vehicle you buy. Also, ensuring that the vehicle has been taxed and has an MOT is your responsibility, as is checking that the vehicle is roadworthy. You can have the vehicle delivered to any address, but there will be a charge for this service.
Taking the vehicle away the same day is a good idea. Some auctioneers offer no warranties at all. Others may offer a warranty that will be good for up to a short period after the end of the auction. Where a vehicle is sold with no major mechanical faults, warranties will only apply to the major parts such as a clutch, engine, gearbox and steering. Components like bulbs, broken glove compartments and dents are not covered. Remember, if the vehicle is “sold as seen” it has no warranty whatsoever.
Vehicle price guides are available online as well as at many newsagents these days. But remember, they are only guides. The most accurate, CAP and Glass’s Guide, are only available on subscription to dealers. The best guide of all is your experience if you attend auctions several times. Most auctioneers offer advice via their websites. Some will offer online bidding, but this isn’t recommended – there’s no substitute for being in the room and looking at vehicles on offer.
Buying at auction can be a great way to acquire a vehicle. But it’s riddled with risks for the inexperienced. So go to an auction at least once before you buy, because if you are unaccustomed to the methods of operation, you could get your fingers severely burnt.
If you buy from a dealer, you are buying a vehicle at greater cost but with security and after sales service. If you buy privately, the vehicle is sold as seen but will cost you less. But if you go to an auction, you could get the best of both worlds because you are buying wholesale.