Deciding How Much to Bid at Car Auctions

Car auctions are great places to find deals on used cars, but you’ll need to come prepared. The last thing you’ll want to do is overpay, especially since the cars you purchase at car auctions may have hidden problems that need repair. You’ll want to know the maximum price you’re willing to pay for a particular car before you attend car auctions – that’s the best way to make sure you don’t overpay. Here’s the best way to determine how much to bid at car auctions:
Take advantage of the pre-sale inspection period. Take a look at the outside of the car, checking for dents, scratches, and signs of unusual wear and tear. Inspect the interior the same way. If you’re not sure you have the expertise, ask a knowledgeable friend to attend the auction with you. (If you’re lucky and are friends with a mechanic, ask him to attend with you.)

Take extensive notes. Make sure you get the Vehicle Identification Number (VIN), the make, model, and model year, the number of cylinders, the car’s mileage, and any optional equipment on the car.
Use the data you collected to try to establish a fair market value for the car. You can check the blue book value or use other online resources to establish the car’s value. Or, you can call a few dealers: describe the car, give them the details, and ask for an estimate of what the dealer will give you. Typically the dealer will quote a price 20% to 25% below wholesale value – after all, he or she has to make a profit. Factor 10% to 15% back in (to be conservative) and you’ll have a pretty good estimate of the car’s value.

Compare the information you’ve collected and determine the average of the prices. Then adjust your bid down so you’ll feel comfortable that if you buy at car auctions you’ll be able to sell the car to a wholesaler if you decide you don’t want it. No matter what make sure your maximum price isn’t above the wholesale value of the car.
Use the VIN Number to run a CarFax report before you attend car auctions. You can get information about previous owners and any accidents. While it’s not a guarantee the car is in good shape, it will let you know if there have been major repairs made due to an accident.

Advice for Bidding at Car Auctions
Set your maximum bid price and stay with it. Don’t bid higher than your maximum price in the heat of the auction. Car auctions can be exciting – use your maximum price to keep you thinking rationally.
Auctioneers will sometimes start the bidding at a high price and then lower it if no one bids – which often happens.

There’s no reason to be the first person bidding. Wait and get a feel for how many people seem to be interested before you bid. It doesn’t matter whether you’re the first person to bid – it only matters if you’re the last person to bid.

To get a feel for the process, go to a few car auctions to watch and learn. The more you know about car auctions, the better chance you have of finding a great deal when the car you want is on the block.

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