car Auction

About 9 million vehicles are sold through auto auctions in the U.S. each year. Cars of every shape, size, color, and condition change hands with the bang of a gavel, with most transactions lasting just minutes.

Some auctions are private, not open to the public, while others, including government and police auctions, can be open to anyone who qualifies to participate. At times auctions have a specific category of vehicles, whether dealer consignments, former rental cars, totaled or repossessed cars, off-lease, salvage, fleet, or, in police auctions, impounded or abandoned. It’s important to learn as much as possible about the auction before attending, including policies on returning vehicles that are sold under false pretenses.

VIN Lookups are crucial tools

Vehicle Identification Numbers (VIN) are unique identifiers for cars, the 17-digit number located in the corner of the windshield. This number is used to track vehicles and may be used to learn about a car’s history, including title status (if it has been deemed a total wreck in the past), any recalls on the model, repair history, and more.

Using a VIN number lookup to trace the vehicle’s history is particularly helpful at an auction where prospective buyers are often left to their own devices to look vehicles over before they go on the block. If VIN reports aren’t available for each vehicle, buyers are in the dark about the condition and history of the car. Fortunately with a smartphone and the ability to log onto one of many VIN-check websites, those interested in a vehicle have as much information as the auctioneers. The National Insurance Crime Bureau offers a free VIN lookup service, but the information it returns is somewhat more limited than the commercial sites.

5 things you need to know:

  1. Read the fine print. If you’re able to get into an auction, do your best to read and understand any sale conditions before bidding on a car. Is there a period during which you can return a vehicle and get a refund if its condition was misrepresented? You will be asked for a deposit in exchange for registering to bid. Understand the buyer’s fees as well: this is the premium added to the cost of the vehicle at the end of the auction.
  2. Do your homework. Think like an auto professional who will go to auctions seeking a specific make, model, and year of vehicle to purchase. The more you know about that used car’s value and likely issues, the better: you may be able to spot signs of a costly leak, a frame that’s been welded after a crash, and other defects that will affect the sale price. Know that auctions are often the sale of last resort for dealers, so the vehicles may not be in the best condition. If you think you’re getting a bargain price there may be a good reason for it.
  3. Red light, green light. When an auction starts, things move quickly. It may be best to sit back and watch a few transactions before jumping into the fray. Near the auto being sold will be an indicator light, like a traffic light. These colors (red, yellow, green) represent the type of sale that’s going on (detailed in the auction’s paperwork that can be reviewed when you register). Red is the “as is” condition, which means that there is no recourse/refund for purchasing the vehicle unless specific information is found to be in error, including the odometer reading or title information. Yellow generally means there are specific conditions under which the vehicle may be returned. A green light means the vehicle may be returned. However, these conditions only apply for vehicles sold above a base price of about $3,000. Anything that sells for that price or less cannot be returned for any reason (further reason to beware of bargains).
  4. Double check the VIN. A Vehicle Identification Number appears in more than one place on the car, including inside the doors. A simple test to find out if the condition of the car you’re examining is accurately represented on the auction paperwork is checking to ensure the VIN numbers match. If they do not match (windshield VIN, door VIN, etc.) it’s a clear indication the vehicle has been wrecked and pieced back together. A reconstructed vehicle is prone to other issues. If that information is not disclosed on the auction paperwork, beware.
  5. Understand the refund process. Most auctions sell on a cash basis only. Some will allow buyers to return vehicles if they’re notified within a brief window. Others will extend that period if the title is not available at the time of sale. It’s rare for potential buyers to have an opportunity to drive a car before bidding on it; if you’re able to get the vehicle into a shop immediately after buying and find serious issues that void the sale, you must seek a refund quickly