Buying a Car through an Online Car Auction

Years ago the only way to buy a car was through a dealer or from a private individual; you visited the car lot or checked the want ads in your local paper to find a car you were interested in buying. That’s all changed – thousands of people buy cars through an online car auction. Online car auctions make it easy for car buyers to search through hundreds of different vehicles to find the car – and the price – they want. How does an online auction work? It’s simple: the owner lists the car with the online auction site, commonly including pictures, specifications, the car’s mileage… any information they think is important to car buyers. Buyers then bid on the car until the auction’s time period ends, and the highest bidder has purchased the car. In some cases the auction is final, and in others the owner is allowed to set a “reserve” price; if the “reserve” price isn’t met, the owner isn’t required to sell the car.

The most commonly used online auction site is eBay. Thousands of cars are available on eBay. Other sites include carsdirect.com and cars.com, and on Yahoo! auctions. (Keep in mind that there are two basic ways to buy cars online: through an online car auction and through a private individual or (more likely) a dealer using the internet to advertise cars for sale. Online car auctions allow you to bid against other potential buyers – online sale sites simply list cars for sale, and you negotiate with the owner to attempt to buy the car.)
If you’re interested in buying a car through an online car auction, here are some tips:

Decide what car you want first. Online car auctions aren’t the best places to determine which car is right for you. Decide the car or cars you really want and then check online car auctions for what’s available.
Decide ahead of time what the car should cost. Establish the fair market value of the car before you check prices on online car auctions. The bids you’ll see don’t necessarily reflect the reality of a car’s value – remember, sellers are trying to get as high a price as possible, and buyers are looking for the lowest price. Check local dealers and blue book values to get a sense of a fair price range.

Use watch list tools on online car auction sites. You can create a list of makes and models you’re interested in, and sites like eBay will notify you when a car that fits your parameters is up for auction. You don’t have to use a watch list, though – many people enjoy checking out what’s new on the online car auction sites.

If you find a car you’re interested in, look closely at the description. If there isn’t enough information, ask the seller for more details. If they won’t provide the information you want that’s a warning sign.
If you can, try to talk to the seller on the phone. It’s nice to put a voice to a seller instead of simply dealing through e-mail.

If you decide you want to bid on the car, make sure you understand the seller’s return policy, any warranties offered, or any other guarantees. Also make sure you have a sense of the shipping costs involved if you won’t be traveling to pick the car up. Remember, the total cost of the car is both the purchase price and the cost to get the car to you.

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