Thursday 26 April 2018

Going, going, gone: The ups and downs of buying a car at an auction

Aidan Timmons and Motoring Editor Eddie Cunningham team up to help readers make the right choice with their next car. Aidan visits dealers all over the country to produce a monthly guidebook on the values of used cars. He is co-editor of Motor Trade Publishers, who supply a car-valuing service to the motor trade, insurance companies and finance houses. Eddie is author of former best-seller 'Clever Car Buying'.

Our simple advice could help you to make the right choice when buying your next car
Our simple advice could help you to make the right choice when buying your next car
Do some background work before going to an auction.

Everyone loves the buzz of an auction. The bidding, the decision to raise the hand one more time, the adrenalin surge when that car you've had your eye on is finally yours.

Or the sense of loss and self-criticism when it isn't and you look enviously at it as your bidding rival takes possession. Or the dread of feeling you have paid far too much. It can all be intoxicating.

The potential to hunt down a bargain and cut out the 'middle-man' gives it a potent mixture of motives. But like everything else in life and in business there are upsides and downsides.

Here we are going to try to guide you through whatever pitfalls that might arise and, hopefully, steer you to bringing down the hammer on a successful deal and a trouble-free drive.

Generally speaking, we always advise people to bring someone along with them when they are looking at, or thinking of buying, a car. We would certainly urge them to do so when going to an auction. We'd go so far as to say you'd be mad not to.

That is not a reflection on the auction houses by any means. It is a by-product of the process.

From the moment you first start bidding to the drop of the gavel can take such a short a time. It can be over in a few seconds. That's where the danger can lie. You've got to be prepared and have someone to quietly advise when enough is enough.

Before going any further, just a little bit of background. When the economy hit the skids in 2008/2009 auctions became hugely popular. They were mainly filled with finance repossessions as banks ranked among the largest dealers in the country.

And boy were there some deals to be had. It was just a pity that more people did not have the money to buy them all.

Thankfully, fewer and fewer people are getting into financial difficulty with their cars nowadays, so the products going through auction houses mainly consist of stock from dealers.

The quality of auction stock is constantly improving, too.

Dealers are now under pressure to only retail cars of a certain quality, usually really high quality.

This means that some cars, whether because they are a little older than dealers might prefer; or they have too much of the same product in stock; or they are too costly to recondition and make sufficient profit on, can now all be found in auctions.

So armed with all that background, here are a few of the most important things that you should remember.

* There are different types of auctions held on different days. Some large dealer groups hold special auctions for stock traded into them from various outlets around the country.

Other days there is general stock from a variety of dealers. As a result the choice of car can vary tremendously.

* Most auction houses keep their websites up to date so be sure to do your research at home before going to on to buy.

* Each car is graded and given a report. By narrowing your search at home you will avoid the risk of missing something at the auction (they are busy places) or making a knee-jerk reaction.

* Once the gavel drops the car is yours. Be most acutely aware of that. There is no going back. Your raised hand, which brings down the hammer, symbolises a legal obligation to buy the car. Good or bad, it is yours to pay for.

* For the most part, cars at auction don't come with warranties unless there is some outstanding manufacturer warranty remaining. You need to check this out beforehand. Manufacturers' warranties carry on for the full duration of their application which means second and subsequent owners can benefit.

* Stick to your budget. This is absolutely vital because it is so easy to go an extra couple of hundred euro.

And then a few more.

And then a few more until you're paying way above what the car is worth to you. Do not let it become a personal duel with the other bidder or bidders.

* There are different reasons for people being at an auction. Sometimes there are dealers looking to fill a gap in their stock.

Some traders try to spot the potential to make a few euro on a car that they might not otherwise have come across in their travels around their local dealers.

* And then there is the regular retail customer who can often pay a higher price to secure the car as they are not going into the deal to make a profit.

* Whatever you do, set a clearly defined budget and don't pay over the odds. If a car exceeds your budget then stop bidding. Once your hand is raised, you are in the game so keep them in your pockets when pricing gets steamy.

* It is worth repeating: Bring a car-savvy person with you. Someone you really trust. Before bidding starts, you can take a walk around the auction lot and start the car in which you are interested (you can't drive it, though).

* The auction floor is well lit but as the evenings are drawing in it is wise to bring a torch with you to peruse the cars before they go for bidding. And remember lights can flatter. You've got to try to picture it in daylight.

* Always remember you are buying something that has been used by someone else. Satisfy yourself that the wear and tear that is visible on seats, bootlid, sill, brake, accelerator and clutch pedals is reasonably within the ambit of wear you'd expect from the mileage. If you're not happy, don't get involved.

* Assess the likely cost of reconditioning the car. Don't blow your whole budget on the purchase price. Instead, keep aside a few euro to cover servicing and any other remedial work required.

* Check the auction fees. You need to pay the auction company once you purchase a car. Be sure to check the website or call their office to get a clear indication of how much it will cost you. In most cases, the fee is a percentage of the purchase price of the vehicle. Better to know in advance.

* Auctions are moving online but unless you really know what you are doing or have someone on the ground to see the car, it is probably best you go in person.

* Don't just go to an auction with the intention of buying. We strongly advocate that you go to a couple first just to get the feel for it and to understand the system. It costs just a few euro to attend but you are under no obligation to buy anything. And it is not a bad way to spend a couple of hours. It will really 'tune' you in to the scene.

* It is obvious, but make sure you have your financials all sorted and ready should you buy. Clear all limits with your bank, building society or credit union and use them as a discipline to stick to your budget.

* It is an old piece of advice but it is worth repeating. It is much worse to be sorry for buying something than for not buying it.

So don't panic into thinking you've let a bargain slip through your fingers. There will always be more to follow.

* And finally, if you (or your back-up expert) have the slightest doubt about a car then don't get into the bidding because you think you'll get it cheap. We're not saying there are dodgy cars at auctions but why put yourself through the subsequent torment of wondering on a daily basis if there is something about it you sense isn't quite right.

Good luck and enjoy the experience.

Indo Motoring

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