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Deciding Which Car to Buy at Auction
Auto auctions have a reputation for offering great deals, but is that true? The answer depends a lot on how much you know about cars. Deciding at an auction requires educated guesses at what might be wrong with the vehicles offered.
Some people feel more comfortable buying fleet vehicles at auction because they're believed to be more regularly maintained. But not all fleet vehicles are alike.
Who Drives Fleet Vehicles?
Many organizations that use fleet vehicles resell them through auctions because it's the most straightforward route when replacing cars. These companies and public service agencies often don't pay retail prices for cars, so they don't have to worry about getting top dollar on each resale. These vehicles are replaced on schedule.
Organizations that use fleet vehicles include:
- Law enforcement
- Auto rental agencies
- Utility companies
- Engineering companies
- Cities and towns
Top Five Things to Look for at an Auto Auction
Purchasing at an auction can be nerve-wracking because you have a limited amount of time to decide and limited ability to review the vehicle's condition and history. Rules of auctions only allow a vehicle to be returned after purchase under strictly limited conditions, so it's a "buyer beware" situation. Be alert for the following:
- Low mileage. A vehicle with low mileage may still have manufacturer's warranties.
- Clean title. Salvage titles can be headaches, as can liens (loans).
- Maintenance record. Was the vehicle maintained regularly?
- Environment. City vehicles suffer more starts and stops, increasing wear.
- Certified. This is unusual in an auction situation, but a certified car means its mileage is under a certain threshold (usually 50,000 miles) and includes a manufacturer warranty.
Autos sold at auction can be great deals, but each should be evaluated individually, keeping in mind many factors that can be observed or tested prior to purchase. Ways to evaluate a fleet vehicle for sale at an auction include:
- Title information
- Vehicle History Report (GoodCar)
- Maintenance schedule
- Prior use
What Makes Fleet Vehicles Different?
Fleet vehicles are those owned in large numbers by one organization. Although they may have been driven by several different people within that organization, fleet vehicles are usually maintained on a more rigorous schedule than most private owners. Consider the type of fleet use before making a purchase. Keep in mind that electronic devices removed by the fleet owner may alter the traditional wiring schematic (such as police computers, taxi fare machines, and GPS installed in other fleets):
- Law enforcement – the vehicle may be subject to fast starts and stops, which increases wear and tear on components like brakes, shocks, springs, and bearings. However, police may purchase vehicles with higher-end specifications and sell them at specific intervals, such as three years old. The difference between a city patrol car and a highway patrol car may not be as significant as you think. A study of average miles per hour for law enforcement vehicles shows that highway patrol cars make a lot of short trips just to get to their assigned stations.
- Rentals – multiple users without an ownership stake in a vehicle may treat them badly. Still, maintenance of rental vehicles is usually above average. Also, rental fleets are refreshed every couple of years, so mileage is generally low.
- Utility companies, city vehicles, college vehicles – daily use during work hours could mean a lot of short trips that increase wear and tear.
- Taxis – Long periods of idling and generally short trips with lots of stops and starts, putting brake and transmission systems under constant stress.
What a Vehicle Title Tells You
A title is a legal document that shows the previous owner of a vehicle and the years it was owned. A title will also show the location of the owner's home or business and whether the title is for salvage value or if the vehicle was rebuilt after a wreck.
Why is title information important?
- If the vehicle has had several owners and has been moved to several different states, it could be a "lemon", which is a vehicle with serious deficiencies that nobody has been able to fix.
- If the vehicle has a salvage title, it has been deemed a total wreck and must be repaired or rebuilt and re-inspected before it can be registered for regular use. It can be challenging to get insurance for such vehicles. Vehicles with rebuilt titles can be a good buy, but auctions rarely allow an opportunity to question the previous owner to learn about the extent of repairs and whether they were done professionally.
- The location where a vehicle was kept can be very important because cars that have been in floods often don't show any evidence of it. If you match the vehicle's registered location with a hurricane event, it might give you a reason to pass on the purchase.
- Sometimes a title will be branded with "water damaged" to alert future owners to the issue, but that's only when an insurance company has paid a major claim for a flood incident.
- Mileage or odometer reading is a key factor in a purchase because the vehicle may still have some manufacturer warranty available.
What a Vehicle History Report (GoodCar) Can Tell You
This report has become an essential ingredient in making decisions about purchasing vehicles. The information it contains is based on the unique Vehicle Identification Number (VIN) shown in the corner of the windshield, inside doorframes, and on the chassis. A GoodCar report shows:
- Previous owners. And if someone holds a lien on the car. Locations where the vehicle was registered can indicate a scheme to "wash" the title. This involves moving the vehicle to a state where a salvage, flood damage, or otherwise negative title status may be removed to fraudulently sell the vehicle as undamaged.
- Recalls. Manufacturers often issue recalls for safety issues. A GoodCar report will show if the current owner has addressed them.
- Major repairs. Anytime a vehicle has a major part replaced or significant service done, it is registered under the vehicle's VIN number and logged by GoodCar.
- Accidents. A prospective buyer should examine the extent of damage to ensure no lingering issues.
What Else to Watch For
The lifespan of an average automobile is longer than it used to be. Cars generally last for 200,000 miles now, and some go longer if they're well-maintained. Finding a vehicle with a reasonably low number of miles on it and in apparently good condition is possible. But there are lots of ways that problem cars can be disguised, including:
- Cleaning the engine so that drips don't show.
- Removing the wire for the "check engine" light so it doesn't show up on the dashboard.
- Replacing damaged seating and floor material that would show that the past owner was lax about maintenance—or worse, that the vehicle was previously flooded or burned.
Car Auction Frequently Asked Questions
What is a car auction?
An auction is a type of sale in which the highest bidder wins. One common theme of auctions is that buyers must do their homework in researching the vehicles or items for sale as much as possible before bidding. Auctions are usually open to dealers only, but the general public may participate in some. Auctions set bidding rules and usually publish a book that describes the vehicles for sale before the start of the sale.
What is a fleet vehicle?
A fleet vehicle is purchased in bulk for use by an organization or city, such as for meter readers, law enforcement, deliveries, or moving personnel around a big campus. Fleet vehicles may be purchased in bulk from the manufacturer and may have specific requirements to fulfill the mission of the organization.
What is a vehicle title?
A title is an official document created by the state Department of Motor Vehicles. Titles track the ownership of specific vehicles using the unique Vehicle Identification Number stamped into different parts of the vehicle. A title describes a vehicle's particular qualities, including year, model, make, and mileage. The owner holds the document; if a loan is owed on the vehicle, the title is held by the bank that made the loan. The title is signed over to the new owner when a vehicle is sold.
What is a vehicle history report?
A GoodCar vehicle history report is essential to the car buying puzzle. It traces the vehicle's history using the unique 17-digit VIN number assigned to the car when it was built. This history should show where the car was housed, how many owners it had, any significant repairs, accidents, lienholders, and recalls.
Why are vehicles sold at auctions?
The National Auto Auction Association says more than 9 million cars and trucks are sold at auction each year. Many are sold because they are fleet vehicles, such as police cars, taxis, rental cars, or corporate-owned vehicles, and they are scheduled for replacement. Banks may also send cars to auction if the owner has let the loan lapse, and auto dealers may auction leased vehicles that have too many miles on them. In addition, law enforcement agencies periodically auction vehicles that were involved in crimes or those that were impounded. Vehicles may be repossessed if they were used as collateral for loans, and when repossessed they are auctioned.
How can I buy a car at auction?
First, find an auction that is open to the public. Many vehicle auctions are open to dealers only. Some states may allow individuals to participate in state-run auctions of surplus goods, which can include vehicles. Ask for the catalogue of vehicles that will be auctioned, which may be available well ahead of auction day, allowing time for research. If you plan to bid on a vehicle, you must register at the auction. There should be time allotted for shoppers to view the vehicles, including starting the engine, opening the hood, and other visual inspection. Take note of the auction number of the vehicle that interests you and be ready when it comes up because each car is usually sold in 60 seconds or less. Lastly, if you purchase a vehicle at an auction, don't expect the title to be sent to you for two to three weeks as processing takes time.
Is it bad when a vehicle has been sold at auction?
No, it isn't bad for a vehicle to be auctioned. Some people get great deals on good, solid cars at auctions. Vehicles can go to auction for a number of reasons, ranging from repossession by a bank to being a corporate vehicle that is liquidated due to age. Many small auto dealers buy cars at auctions and fix them up to sell. It's best to find one that the dealer warranties.
How can I find out how much a car sold for at an auction?
Contact the auction house that held the sale.
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