Malcolm Wheatley reckons car auctions are a good place to pick up a cheap motor.
Over the years, I’ve bought several cars at car auctions. By doing so, it’s possible to save serious amounts of money. Yet it’s also possible to lose serious amounts of money, by buying a ‘dud’ that needs expensive repairs. While buying cars at auctions isn’t for the faint-hearted, the downturn in the economy means that auction prices are even lower than usual. So here’s how to take the plunge and bag a motoring bargain.
1) Choose a reputable auction company
Auctions aren’t the back street affairs of yesteryear: British Car Auctions, for example, is a multi-million pound business with 21 sites across the UK.
It auctions vehicles on behalf of former owners such as car hire companies such as Lex Leasing, LLoyds TSB Autolease, and Pendragon -- names familiar to anybody with a company car, for instance. And if you’re looking for a very specific vehicle, look for auctions that list their catalogues on their websites beforehand.
2) Research how the car auction process works
Basically, you’re buying a car ‘as seen’, and although some vehicles do carry warranties against major defects and false claims, you sometimes have only an hour or so to detect the fault and notify the auctioneer.
Read the small print as to what constitutes a major fault, and take the vehicle for a test drive as soon as you can. Remember that by buying at auction, you’ll be buying a newer vehicle than would otherwise be the case -- which offers some protection. You can always restrict yourself to buying a car no older than, say, two years, further minimising the risk of buying a faulty car.
3) Research the hidden costs
The price at the fall of the hammer isn’t the only cost you pay: at British Car Auctions, for instance, there’s a buyer’s fee of £244 for a vehicle costing £3000, which rises by £5 for every additional £250.
This ‘levy’ is how the company indemnifies buyers against proving to be stolen property, the subject of outstanding hire agreement, having a false mileage reading, or being an insurance write-off. For a fee, the RAC’s ‘Car Data Check’ service will alert you to any such problems -- and you can check before you buy, either by phone (£14.99) or on-line (£9.99). You can read about the RAC’s Car Data Check here.
4) Take title of the vehicle as soon as you can
At British Car Auctions, a storage fee of £17 + VAT is chargeable for each day or part-day the vehicle remains uncollected. Other auctioneers have similar fees. So not only are you paying out more money, you can’t test drive it until you own it, and meanwhile it’s sitting there in the compound at your risk, not the previous owner’s. I once had a radio button stolen from a car before I paid for it. Who would do that?, I wondered -- until I saw the price of the replacement button.
5) Understand the payment methods
Car auctions used to accept cash, telegraphic transfer, or banker’s draft. Now you can pay by credit card and debit card as well. Research each, and the costs -- there’s usually a handling fee for credit cards, but not debit cards. Clearly, a fee of 2% + VAT on a £4,000 vehicle is worth avoiding, if you can.
On the other hand, to pay by cash, debit card or banker’s draft, you’ve got to have the money in your account. Be aware, too, that there’s often a requirement to pay a deposit once you have made the highest bid. At British Car Auctions, a deposit of 10% or £500 is required, payable by cash or Switch at the rostrum.
6) First, go along to watch, not buy
Once you’ve chosen your auction and researched the system and the costs, go along and watch. Don’t take any money, leave the plastic at home, and go and see how it works in practice. The pace is fast and furious, with cars being driven in front of the auctioneer for only a minute or two before the hammer falls and bidding starts on the next one. Next time, tell yourself, you’ll be here for real: does it feel comfortable?
Pick an example of the sort of car that you might be interested in, and follow it through from the compound to the hammer-drop -- this is your opportunity to listen to the car’s engine, ask the driver any questions, and generally make a judgement about whether you would feel happy to bid on the vehicle. To get a feel for prices, and to avoid over-paying, take along a copy of Parker’s Guide to second-hand car values, available from most newsagents. Remember, this is a practice -- so that when you do it for real, you’ll be able to concentrate on getting a good deal.
7) When buying ‘for real’, take along backup
For a start, ask a mechanically-minded friend to accompany you, if possible -- they’ll stand a better chance of hearing ‘odd’ engine noises, or spotting something that’s not right. And take your spouse or partner, if the car is for them -- it’s a little too late to discover they don’t like mustard-yellow when the car is sitting on the drive! The usual rules for going to an auction apply: agree an upper limit for what you’re prepared to pay, and venture beyond this with extreme caution.
If all that sounds too scary, remember this: you’ve nothing to lose by going through steps 1-6, but then dropping out without buying if it all seems a bit too much. So undertake the research, and then decide for yourself if it’s for you. My experience was that after watching dozens of low-ish mileage ex-fleet cars go under the hammer, it was surprisingly easy to conclude that they couldn’t all be lemons, and that the risk was worth taking. Happy hunting!
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For the record, Malcolm Wheatley has no connection with British Car Auctions -- even as a satisfied customer. None of the cars he has purchased at auction had any faults or defects, and his wife still mourns the loss of her favourite one -- a mustard-yellow Mazda 323, bought at an auction in Leeds many years ago, having done 14,000 miles under one careful lady owner. Honest!