Used Car Auctions Online
You’ve certainly heard of e-Bay, the popular online auction site where you can buy and sell just about anything, but did you know you can even use e-Bay to buy a car? This method of buying a car can save you a lot of money. However, there are some obvious drawbacks to buying a car you’ve never seen or driven.
Perhaps you know someone who has bought a car on e-Bay or another similar online auction. Chances are they paid less than they probably would have paid for a similar car on a dealer’s lot. There are certainly good deals to be found. However, there’s an inherent risk in buying a car you haven’t driven.
Dealer Auctions
From my experience working as a used car salesman, I know a little bit about car auctions. Typically, they are open only to dealers. However, some dealer auctions are lax in their rules about civilians. This means that a dealer can take a potential customer into the auction to pick out a car for the dealer to bid on. If the auction is strict about not admitting civilians, dealers will often use cell phones to describe cars to potential customers and ask the customers how much they are willing to pay. Again, there is always an inherent risk in buying a car you’ve never driven, so make sure the deal is really good.
Rules and Laws of Car Auctions
Beware that biding at a car auction represents a binding contract between you and the seller. There is no “cooling off” period during which time you can change your mind and annul the sale. Once you’ve won the bid, you will typically be required to deposit a percentage of the total vehicle price within a short period of time.
There are, however, laws and rules on your side as the buyer. For example, if you are the winning bidder on a car and discover that there was damage that was not disclosed, you may be able to cancel the sale. Or if the vehicle was not advertised accurately (4x2 instead of 4x4) you have the law on your side.
Extra Fees and Costs Associated with Car Auctions
Even if you need to use a magnifying glass, you must read the fine print. Typically, an auction will have extra costs and fees associated with all sales. For example, documentation fees can run as high as $500, though the average is usually closer to $150. Keep in mind that if you use a credit card to purchase the vehicle, you will probably be required to pay a surcharge of two to three percent.
Remember that the winning bidder will be responsible for all costs associated with shipping or storing the vehicle. Storage fees typically cost $25 to $75 per day after the auction has closed. To transport a vehicle within the continental United States, you should budget about $500. Keep in mind that if you use a credit card to pay for transportation costs, you will likely be subject to an additional surcharge.
By Aaron McCullough