Car Auctions are a great way to buy a new vehicle, so here at ALA GAP Insurance we’ve put together a comprehensive Car Auction Guide.
Our guide covers everything from how auctions work, car grades and Classic Car Auctions.
Car auctions enable individuals to buy and sell cars by offering them up for bid, taking bids and selling the vehicle to the highest bidder. While most cars sold are ex-company vehicles, many car dealer groups use auctions to sell on excess stock, whereas smaller dealers use them to expand their range.
People like to buy from car auctions because the vehicles tend to be relatively cheap. If you attend an auction house on a quiet day with few bidders, you could possibly purchase a car for significantly less than you’d pay for it at a dealership or private sale.
How do Car Auctions work?
If you are considering attending an auction, we’ve put together a guide to help you have a successful visit.
Do your homework. Car auction houses very often publish their catalogue online before a sale. Also known as ‘auctions lists’, these catalogues will help you check whether the car you’re interested is available.
Acclimatise. Car auctions can be daunting for first-timers. Before you think of buying a car, it’s definitely worth taking the time to get used to the pace of the place.
Set a budget. Auctions can be fast passed and it can be easy to get caught up in the moment. Once you have done your research, set your budget and stick to it. Remember that in addition to the hammer price, you’ll have to pay a buyer’s fee.
Register. Some auctions require individuals to register before making a bid. If you don’t remember to register you may need to pay at least £500 in cash upfront or pay by Maestro or Visa Delta debit card.
Check the cars. Examine the car you are interested in before the bidding starts to confirm it’s in satisfactory condition.
What to listen for. What the auctioneer says before the bidding opens is a legally binding selling statement. It is crucial that you pay close attention, as the details provided by the auctioneer supercede any descriptions in the auction list or online catalogue. Below are the key phrases to look out for…
No major mechanical faults – indicates the car shouldn’t have any faults with the engine, steering, brakes or gearbox.
Specified faults – this is where the auctioneer reads out the list of faults that vehicle does have.
Sold as seen – the vehicle is sold the faults it may or may not have, with no warranties by the seller.
Sold with a warranted mileage – The car’s mileage has had an independent inspection and the vehicle is sold on the description contained in the report.
If you win. The highest bidder must go to the rostrum to fill in and sign a purchase slip and pay the clerk £500 or 20% of the hammer price, whichever is higher. You then need to go to the cashier’s office to pay the balance, and get your invoice and vehicle documents.
Taking your vehicle. After the transaction is complete, you are free to collect the keys and drive your vehicle. Remember you will need valid insurance, a driving licence and a MOT certificate to drive legally from the auction house.
Car Auction Grades
Many car auctions have a grading system in place to help buyers and sellers know the condition of a vehicle. Most of the systems have 5 grades, ranging from A to E or 1 to 5, as well as including an unclassified grade.
Grade A/1 – Car has minor repairs like a small dent and may be missing minor trim items.
Grade B/2 – Car has one medium body shop repair or a mixtures of one medium body repair and a number of minor repairs.
Grade C/3 – Car has up to 4 medium body repairs and up to 3 major body repairs.
Grade D/4 – Car has one major repair and some medium and/or minor repairs
Grade E/5 – Car has more than 2 major repairs
Unclassified – Car is uneconomical to appraise, has major parts missing, multiple recorded items exceeding the criteria of Grade 5 and multiple unrecorded items.
Police Auctions and Government Car Auctions
One of the best places to buy cheap cars is Police Auctions and Government Car Auctions. Thanks to The Proceeds of Crime Act, it is now possible for a court to confiscate cars involved in criminality, which can’t be legally accounted for. If these cars can’t be returned to their legal owners, they can then be sold off at a local auction house. Local police and government auctions take place on a regular basis at auction houses across the UK.
Classic Car Auctions
Classic Car Auctions specialise in the buying and selling of classic cars. Different auctions focus on different types of classic cars. Some specialise in cars with a value of approximately £50,000, whereas others offer an eclectic mix of cars that vary in price and age. Thanks to the enthusiasm for classic cars, many of these specialist auctions have experts on hand to give sellers honest and realistic estimates. Due to the interest, classic car auctions draw from across the world, and many auction houses also provide a secure online internet bidding service.
Salvage Cars and Damaged Car Auctions
Damaged car auctions specialise in buying and selling salvage cars. Damaged auctions source their cars directly from insurance companies, and are happy for you to inspect a car before you bid. Many auctions are set up for 24/7 online bidding, allow proxy bids and have auto-extend auctions, making buying easier across the UK.
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