Buyers' Guide: Pros and cons of car auctions
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Vehicle auctions are ideal for those looking for a used vehicle or something that’s special and more difficult to find. They’re becoming increasingly popular online and at auction houses.
Typically auctions are fast-paced environments where it can become a bit dog-eat-dog, with large sums of money being invested wisely and others being lost in an instant.
There can be heaps of deals to take advantage of at auctions and, in some cases, your money may go further than you think.
Some auctions legitimately sell vehicles that were originally stolen and then recovered by the police.
It’s also common for ex-fleet and deceased-estate vehicles to be sold at auctions, so there are plenty of opportunities for car buyers to seal a deal.
Online auctions have also opened up an even wider selection of vehicles to consumers as they can now access the overseas market as well as that in New Zealand.
This is great for those who are after a set of wheels that isn’t available here yet. An overseas auction may have that classic car or other specialty vehicle you’ve been looking for.
If you know what you want and you’ve worked out your budget, buying a car from auction can be a swift process. For some, joining the bidding process is exciting and there are various bidding tactics you should research before you go.
For online auctions, setting the fixed price auto bid to your pre-determined budget is an effective way of establishing your maximum expenditure and not ending up in the red.
Although the experience can be exhilarating, that same reason can lead people to getting swept up in the moment and overspending.
Incremental increases in the price may not seem significant when the auctioneer is calling them out, but they do stack up.
When the air has cleared and you’re left with a bill that is hundreds more than your finance allows, it can set you off on the wrong foot from the get-go.
Buying a vehicle is a major purchase, so a high-pressure sale doesn’t always suit everyone.
Inevitably, buying at an auction does carry more risk. For example you could end up buying a late-model vehicle for your teenager, only to later realise that the engine capacity makes it expensive to insure.
Checking the fine details before you decide to take part in any auction is vital.
If you’re buying at an auction house, don’t forget to incorporate the buyer’s fees into your overall costs.
Higher-priced vehicles will inevitably increase the buying fees you’re required to pay if you win.
You’ll also need to consider on-road costs as they aren’t always included if the vehicle being auctioned hasn’t been registered on the road yet.
We’d always recommend taking a car for a test drive before you decide to buy it but unfortunately auctions don’t always present car buyers with the opportunity to get a true feel for a vehicle — especially those that are online or overseas.
Auction houses will generally allow you to take the vehicle out for a quick drive beforehand, but you’ll usually need to book this in advance.
We’d suggest carrying out a test drive and pre-purchase inspection on any vehicle that’s going to auction well in advance.
This will provide you with all the information you need and will warn you of any potential mechanical or structural concerns before the bidding begins.
Vehicle auctions are popular among car buyers but it’s important to be prepared beforehand.
Be ready to strike at the right time and be aware that one of the biggest mistakes you can make at an auction is to get caught up in the excitement and blow your budget.
Always think things through and enter any auction with sound knowledge on what’s to be sold.