9 Dos and Don’ts Of Buying A Car From An Auction
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An auction is a great place to buy a car for less than the market value. But should you buy a car from an auction? Is it worth the risk?

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Should I buy a car from an auction?
You should buy a car from an auction when you have the chance. However, when buying a car at an auction, it is important to find the right auction. Secondly, assess the risk, and watch before bidding. Inspect and verify a vehicle before putting your money into it.
We have been buying and selling cars at auctions for quite some time. With that experience in hand, we will educate you on the dos and don’ts of buying cars at auctions.
Dos and Don’ts of Buying Cars at Auctions
Choose the Correct Auction
Car auctions can be a great place to find a deal on your next vehicle. However, it is important to do your research before attending an auction.
One of the first things to consider is whether you need a dealer’s license to participate. In most cases, you will not need a license if you attend a public auction.
However, some auctions may require a license if they are considered “dealer-only” auctions. Another important factor to consider is the type of auction you are attending.
There are two main types of car auctions: open and closed. Open auctions are open to the public and usually have many vehicles to choose from.
On the other hand, closed auctions are only open to dealers and usually have a smaller selection of vehicles. Once you have considered these factors, you will be able to choose the right auction for your needs.
Watch Before You Bid
If you’re considering buying a car at an auction, you should keep a few things in mind. First, it’s important to get comfortable with how quickly the vehicles move across the auction block.
Things can happen very quickly, so it’s important to be prepared. Secondly, take note of how other buyers bid.
There may be certain signals or cues that you’ll want to pick up on. Finally, make sure you have a clear budget in mind before you start bidding.
It can be easy to get caught up in the excitement of the auction and end up spending more than you intended. By keeping these things in mind, you’ll be better prepared to find a great deal on your next car.

Assess the Risk
When buying cars at auctions, it is important to assess the risk of each vehicle before making a purchase. The auction staff will typically give each car a green, yellow, or red light to indicate its condition.
A green light means the car has no known defects, while a yellow light means there is a known issue. A red light indicates that the vehicle is sold as is.
It is important to remember that even if a car has a green light, it may still have hidden damage. For this reason, it is always advisable to have a qualified mechanic inspect the car before making a final decision.
If you are willing to take on the risk of buying a car with known damage, red-light cars can often be purchased at a significant discount.
However, it is important to do your research to avoid being taken advantage of by unscrupulous sellers.
Inspect and Verify
Before bidding on a car, it’s important to inspect it thoroughly to make sure you know what you’re getting.
Here are a few things to look for:
- Check the vehicle’s body for dents, scratches, or other damage
- Pop the hood and check the engine for leaks or other problems
- Take the car for a test drive to make sure everything is working properly
- Have a friend or family member with you who knows about cars to help spot any problems
If you’re satisfied with the condition of the car, then you can move on to verifying its authenticity. Make sure that the VIN (vehicle identification number) matches the one on the title and that all of the other paperwork is in order. Once you’ve done your due diligence, you can start bidding confidently.
Set a Bidding Range
It is important to have a budget when you are planning to buy a car at an auction. This is because you do not want to spend more money than you can afford on your new or used car.
One way to ensure that you stay within your budget is to set a bidding range before the auction begins. This means you will only bid on cars within a certain price range.
This can help to prevent you from overspending on your new car. Another way to stay within your budget is to track the cars being sold and their prices.
This way, you will know how much you can afford to spend on each car. Finally, it is important to remember that you should never buy a car that you cannot afford. If you do this, you may end up in financial trouble.
Don’t Overbid
When buying a car, many people get caught up in the heat of the moment and end up bidding too much.
While it’s natural to want to get the best deal possible, there are certain situations where it’s better to walk away.
Don’t Pay More than the Car Is Worth
If you get caught up in the bidding and end up paying more than the car is actually worth, you’ll be stuck with a vehicle that depreciates quickly.
Do your research ahead of time to know the car’s fair market value, and don’t let emotions cloud your judgment.
Don’t Go to a Shady Auction House
There are many reputable auction houses out there, but there are also some that aren’t so reputable.
If you’re buying a car at an auction, do your homework on the auction house first.
There have been instances where people have paid for cars only to find out later that they were stolen or otherwise damaged.
Don’t Underestimate Your Loan.
If you overbid on a car and take out a loan to finance it, you could end up owing more than the car is worth if the value depreciates quickly.
This leaves you “upside down” on your loan, which can be a difficult financial situation to recover from. Paying cash is always best, but if you must finance, be sure to stay within your budget.
Key Takeaways
- It is important to do your research ahead of time and know what kind of car you are looking for and what it is worth.
- Pay attention to the condition of the car, both inside and out, before bidding.
- Be prepared to move quickly if you make the winning bid as you will likely have to pay for the car right away.
- Be aware of any fees or taxes that may be associated with buying a car at an auction.