The Ins and Outs of Car Auctions

Online Loans

February 8, 2021

Buying a car sight unseen is scary, but the savings can take that fear out of car auctions.

More people are turning to car auctions. These take place all around Australia and can really help consumers get some of the best deals on cars. In fact, one reason is that COVID has pushed car prices and demand up.

COVID and Car Prices

The pandemic has pushed used car prices and Australia’s interest in car auctions up for three main reasons:

1: Public transport is way down.
Before March 2020, an average of 15.4% of men and 14.2% of women claimed to use public transport. Today, those figures have shrunk to around 4.9% and 2.9% respectively.

The result is a huge increase in the need for private vehicles.

2: The ease and reliability of buying online.
Today, every part of buying vehicles can be done online. Detailed HD photos, videos of cars being started, driven etc, arranging professional inspections, vehicle transport and, of course, payment.

This means you can view the car clearly before buying, arrange an inspection (for used cars), negotiate the price, arrange finance and pay and get the vehicle transported to your driveway – all online.

3: New car waiting times.
COVID significantly disrupted supply chains around the world. This caused delays in manufacturing. For example, electronic components from China and interior seating from Europe needing shipment to factories in Thailand.

But Back to Car Auctions
How Car Auctions Work

Usually, car auction houses offer online or virtual bids as well as in person. These include photos and videos of vehicles in addition to a condition report. Some auctions also offer vehicles at a fixed price before it actually goes to auction. Buyers can decide whether it’s worth purchasing a car at the fixed price or waiting to see if they can get it cheaper in a car auction.

Luckily, car auction houses know many people are unfamiliar with the process and offer guides and help.

Condition Report: These are listed by the car auction house and give a quick, but detailed rundown. For example, dents/scratches, tyre condition, any warning lights, interior condition and missing service books or spare keys.

“This means about 1-2 minutes per vehicle – too much umming and ahhing and you might miss your chance.”

Most car auctions have a similar process

Find the vehicle or types of vehicles you’re interested in. Some car auctions are for classic cars only, or ex-government fleet vehicles so check what’s on offer and when by doing a little searching.

Knowing what type of car is best for you is a good idea as most car auctions list hundreds of vehicles.

After finding a car you’re keen on offered by a reputable car auction house, you’ll be able to check out photos and condition reports. This is where some consideration is due. You’ll have to think about price Vs. condition Vs. possible repairs Vs. location.

Remember to note the lot number. These are numbers, usually on the front windscreen, that are specific to the vehicle.

To actually make a bid at a car auction, you’ll have to register with the auction house. This means filling in a form online and providing an ID. Some car auction houses require bidders to provide credit card details too. If you win by having the highest bid, you’ll need to pay a deposit.

You’ll receive your bidder number too – an identification number unique to you.

When the vehicle you’re interested in comes up in the auction, you can put your bid down. When bidding online, you’ll have more ‘space to think’ but they do move extremely fast. Some car auctions move through hundreds of cars in a few hours. This means about 1-2 minutes per vehicle – too much umming and ahhing and you might miss your chance.

If you’re the highest bidder, car auction houses often deduct a deposit for the lot number (vehicle) you’ve just bought. Upon making full payment, you’ve got a new car.

Safety Precaution
It’s often worth simply observing an auction or two (or three) if you’re new. Watching other people bid and experiencing the process as a spectator is a great way to get comfortable with car auctions.

Other Things to be aware of

Cars sold at auction must have no finance owing on them but it’s still worth doing your homework. Some vehicles may have previously been stolen and recovered or written off and repaired.

Get a Personal Properties Securities Register (PPSR) to check whether the car you’re looking at has had a troubled past.

Car auction houses often add their own fees for buyers and sellers. Read the fine print of the auction house you’re using to make sure you know what you’re up for.

The car you buy may need repairs or servicing so include that possibility in your budget.

Registration and stamp duty
It’s not uncommon to find unregistered vehicles in car auctions. Make sure you factor these costs into your budget along with the stamp duty which differs per state.

Transport and storage
When buying a car online, you might need transport, especially if it’s unregistered and requiring an inspection and/or repairs. Ideally, you’ll want to collect the vehicle as soon as possible because often car auction houses charge storage fees if vehicles remain on their property.

No test drives
Don’t forget, you won’t be able to take the car for a test drive.

Making Car Auctions a Win

Although there are things to worry about, many people aren’t deterred. Car auctions offer massive savings and can really make your dream car happen in most cases. OnlineLoans is able to assist people looking for car loans from auctions, so if you’re keen, get a quick quote to see rates and repayments.

If you do your research, it’s not hard to find a good-condition example that simply needs a transfer of ownership and re-registration for you to be able to drive it home.

More information about buying cars and car auctions.

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