Public Auto Auction Dealer – How to Buy Car from Auction house?

How to buy Car from Auction house

If you are planning on getting a four-wheeler, then an auction can help you save more money compared to getting the car from a private party or a dealership.  You need to know the rules for buying a car at an auction to make the most of this route. Read on to know more about the things to consider before bidding on a car at an auction.

Do you need an auction license?

Whether or not you need a license will depend on the type of auction. Licenses aren’t usually needed for private buyers attending public auctions. However, cars sold at public auctions are generally in extremely bad shape. Dealers are required to have a license if they wish to attend a wholesale auction or sell a vehicle bought at a dealer auction. The dealer auctions are meant primarily for car dealers trying to add second-hand cars to their existing inventory. In such cases, a dealer’s license becomes mandatory for participation. Public auctions, on the other hand, are meant for everyone whether or not they have a license. Often websites can also participate in dealer auctions after setting up an account and paying a deposit or fee.

Be it public or dealer auctions, whether held online or in person, you will find vehicles that were repossessed, seized by the local police department, surplus or government-seized vehicles, salvage title cars declared a total loss by auto insurance companies, and title pawns that aren’t sold at dealerships.

What to do before buying a car at an auto auction?

Find an Auction

If government vehicle auctions interest you, then you can search online by typing in your location followed by the “vehicle auction” keyword. For cars owned previously by the U.S. government, you can search the website State government surplus auctions can be searched at while the surplus vehicles auctioned off by police departments can be found on their respective websites. News about public auctions is often published in the classified section of a newspaper. For greater transparency, it is advisable to stick to government auctions from where you will get to buy school buses, police cruisers, and other fleet cars used by different government agencies. The information provided is also more reliable and comprehensive than other types of auctions.

Research in advance

In the case of certain auctions, you will get the chance to go through the listings before the auction. Doing this offers you a clear understanding of the available options so that you can focus on the vehicles you like. The listings may include the VIN or vehicle identification number for each car which can be used to search for the vehicle history report on various websites like AutoCheck or Carfax. Car dealers can collate information on previous owners, maintenance history, major accidents or damage, manufacturer recalls, and odometer readings from these reports. Different online tools like Edmunds, Kelley Blue Book, or NADAguides can offer insights on the vehicle’s current market value so that you can understand how much to bid for the car in the auction.

Register yourself

Once you have done the research, it’s time to get yourself registered either as a guest, a business buyer, a public buyer, or a seller by paying a deposit or a registration fee. On registering as a public buyer, you will have to provide a government-issued photo ID and fill out a form offered by the auction house. If you register as a business buyer, then you will have to prove that you are registered with an auto business by providing the requisite information from your business license. The registration memberships usually last a year during which you can attend an unlimited number of business or public car auctions.

Know how to transport back the auctioned vehicle

You will have to transport the vehicle you buy at an auction and for this, you might have to bring a trailer along after considering the following aspects:

  • The number of cars you are planning on buying and whether your trailer can tow all of them simultaneously.
  • The type of car you wish to buy is the second factor to consider. If it’s a salvage car, then you might not be able to legally drive it until the title is updated.
  • The distance will also have to be taken into account as you might not want to drive miles to retrieve the car. In such cases, a professional car transport company might serve you best.

Flexibility is the key

You might have a certain type of car in your mind but you are bound to get disappointed if you focus on a single listing. It is advisable to focus on certain aspects of the vehicle like a four-door SUV that’s between four to six years old and has run less than 100000 miles. You will find multiple cars banking on this criterion that fits the bill so that you can enjoy multiple options.

Be aware of the rules

Every auction has a separate set of participating rules which you need to learn in advance. You might be required to provide some form of identification or register by a certain date. It is also required to know the payment terms as some auctions are cash only while others accept cashier’s checks, credit cards, or money orders.

Reach the auction before time

If it’s an in-person auction, make sure to reach out before time so that you can take a detailed look at each vehicle that sparks your interest. Often auctions allow to bring a mechanic for a car inspection or start the vehicle before placing the bid. If these are not allowed, then you can check the oil, pop open the hood, kick the tires, and look under the car for leaks and other important red flags. Here you will also get the chance to scan for various cosmetic defects like rips and tears on the inside and dents and scratches on the outside that haven’t been highlighted in the listing. If the VIN wasn’t provided in the pre-action listing, then you can get it now to examine the vehicle’s history. The VIN can be found by looking at the spot where the windshield on the driver’s side of the car meets the dashboard. Alternatively, it might be present on the driver’s door where the door latches on being closed. All the VINs should be identical, otherwise, the car might have been rebuilt using other vehicle parts.

Don’t go alone

Buying a four-wheeler can be an emotional experience which is why it is advisable to bring someone along who can keep you focused on the facts of importance. You might have a soft corner for a particular color or model but it’s upon your friend to make you realize that the upholstery on the driver’s seat is torn, or the windshield is cracked.

Maintain a budget

We don’t blame you if the excitement of an auction feels befuddling. But on making the winning bid, you will be required to go through a transaction and pay either part or full cost. Take some time beforehand to determine your budget and stick to the numerical while bidding. If you can’t get the car you want, don’t feel disheartened as there will always be more cars and auctions. Often auction houses charge a “buyer’s premium” on top of the sales price. This might either be a percentage of the bid or a flat fee.

Should you buy a car from an auction?

Getting a well-functioning car at a low price can seem like an appealing idea. However, you need to bear the following considerations in mind before buying from the auction:

  • You won’t get to customize the vehicle at an auction if you have add-ons, specific features, and particular colors in mind. There is a heightened chance that you might end up with a defective car with problems that couldn’t be gauged at the onset if you fail to test drive the car. This won’t be a pertinent problem in case of minor maintenance issues but you might end up stuck in a money pit if you incur major problems.
  • You might be required to pay the entire cost upfront of buying a car at a live auction. Enquire with the auction house beforehand regarding accepted forms of payments like debit cards, cash, cashier’s check, or money order. Sometimes the auction houses accept credit cards. However, in this case, you need to remember that stringent interest charges might be levied if you don’t pay off your dues in time.
  • Cars listed at an auction might be in poor condition due to neglect, have wear and tear, or could have traveled a lot of miles. This is why they typically don’t come with any sort of guarantee or warranty from the auction house. However, this doesn’t necessarily mean they are bad. You just need to set the right expectations before initiating the process.
  • It isn’t advisable to buy from a salvage title auction if you are planning to get a vehicle for everyday use. When a car gets a salvage title, it means that the auto insurance company has declared the vehicle a total loss either due to an accident or any other issue. A salvage-title vehicle might be considered illegal depending on your locality.

Buying from a live auction

Auction houses like Mecum, Barrett-Jackson, and RM Sotheby’s create a circus-like atmosphere with flashy signage, bright lights, and polished presentation to encourage frothy spending. Though you won’t get the opportunity to drive in, you can bombard the seller with multiple questions. Read on to know about the steps for buying from a live auction:

  • First you will have to register by paying a nominal fee before placing the bid at the auction. For doing this on-site you will have to fill out the online forms at least a day before the event so that the auction houses can process your application. You might be required to submit a bank’s letter of guarantee and a credit card number to prove that you have adequate funds in your account for an immediate wire transfer.
  • A paddle with a number on it with be issued to an in-person bidder. At the onset of the auction, the commentator will announce the car that will be bid on alongside a brief description. Next, the auctioneer will announce the starting price for the interesting parties to raise their paddles. The auction will be considered over when the auctioneer’s calls for further bids remain unanswered and they drop the hammer. Often live events allow bidding over the phone, online, or via proxy in exchange for additional fees if you are unable to attend the event physically.
  • Sellers can set a reserve price for the vehicles which is the minimum amount that the seller will accept. This price is unknown to bidders. Often auction houses charge an additional fee to set this safety net and determine a fair value by working with the seller.
  • The winner will have to pay a buyer’s premium to the auction house in addition to the vehicle’s sale price and the registration fee. This will approximately be 10% of the final bid. Thus, if a car is sold for $30000, the winner will have to shell out an additional $3000.

Buying from an online auction

The online auctions allow for a greater number of bidders and sellers despite lacking the pomp and grandeur of live events. Your chances of finding the perfect vehicle remain higher in this case provided you are ready to compete with a bigger crowd. These auctions can run from three days to a few weeks depending on the site. The following steps have to be followed for buying from an online auction:

  • Register by filling in your contact details on a short form. You will also be required to mention your credit card number here which will be used by the auction house to automatically collect its fee if you win a vehicle.
  • Place a low bid early on to understand how long it takes for the site to process your offer. Traditional auction houses often offer vehicles using a sealed-bid procedure in an online auction. Here you won’t be able to see the current high bid or the final sale price unless you win the lot. However, the auction house might inform you regarding the ranking of your bid among others.
  • Most online sales also allow sellers to set a reserve price in exchange for a fee just like live auctions. At times, this information might have to be requested from sellers.
  • Sellers on online platforms like eBay can add a “buy it now” button allowing buyers to avoid the stress by paying a premium for the vehicle. They might also add a “make offer” button allowing the interested parties to make an offer that the seller might accept, counter or reject.
  • Similar to live events, the online auction house will collect a buyer’s fee from the credit card information before the winner’s contact information is shared with the seller. On confirmation of the transaction, the seller and the winner will work out further details about payment and shipping. Usually, websites recommend a wire transfer and if the winner fails to make a timely payment, the auction house might pressure them into honoring the terms or even ban them from their platform.


Despite how lucrative it sounds, buying cars at auction isn’t considered ideal for everyone. You should take your specific requirements and your financial situation into account. An auction might not be the right fit if you aren’t flexible regarding the model or don’t have adequate funds in hand. However, if you decide on proceeding with a car auction, then follow the tips we have listed above so that you can make the best selection.