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This Is Why Cars Go To Different Auctions

Reading Time: 5 minutes //  by Austin

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Car auctions have been something I have been interested in for quite a long time, and more recently have gotten to go to an auction both to look at cars, and to see the auction in action. I have never gotten into bidding, but may at some point.

However since I was a teenager, and now even more so, I have wanted to understand them even better, and what different auctions are, as well as many other questions. 

Why are cars sold at auction?

Most people think of completely wrecked vehicles that are being sold for parts when they think of auto auctions, or at least I always did! However that just really doesn’t encompass everything that a car can be sold at auction for. So here are some of the real reasons why they may be sold.

Insurance totalled vehicles – Flood, damage, hail, etc

This is obviously the most common category of vehicles you would think of when thinking of an auction. Standard vehicle accident vehicles may either be slightly damaged, or extremely damaged depending on the situation. 

Flood vehicles on the other hand may not show any damage to them, but if they were flooded by salt water, it can cause crazy amounts of electrical issues, or a flooded engine.

Hail damage is rather obvious by the small dings all over the vehicle. If I were personally trying to hunt for cheap transportation at an auction, and didn’t care about how it looked, this would be my choice. Although, if you are wanting to fix it up back to the way it was, I would look elsewhere, as you will be replacing too many hard to replace panels to generally make it worth it.

Repossessed vehicles

You will find repossessed vehicles at a variety of types of auctions. It is what it sounds like. Someone couldn’t pay their bill in the variety of ways you can have a lien or loan on the car, and the company came and repossessed the vehicle.

It is a sad thing to think about, however it is also common to find these vehicles at the different auctions.

Rebuilt Vehicles

Rebuilt vehicles are a bit of a strange one. Basically these vehicles are bought at auction as a damaged vehicle, fixed up, and then resold at a later time at auction.

The difficulty of this is that many times people will fix the cosmetic issues with the vehicle, but not any structural or more difficult parts to resolve.

However because it is at auction, you won’t be able to find these issues before purchase.

That said, of course there are also the good people who will actually rebuild a vehicle into a new state and then try to resell it at auction.

So in the end, buying a rebuilt vehicle at auction is a bit of a toss up.

Private parties just selling their car easily and without hassle

You will find these vehicles normally at public auctions, where anyone can put their vehicle up for auction. If you have ever tried to sell a vehicle private party, you will know the challenge behind that. 

All of the tire kickers, no-showers, people asking if it’s still available and then never respond past that. Well, selling your vehicle at auction may not get you quite as much cash, but it does get it in front of a lot of people at once, and it has a great chance to sell with little effort on your side.

Different types of auctions

Public Auction

This is likely the auction most people will be able to go to! These auctions tend to have the private party sellers, maybe some insurance company sellers, and some repossessed vehicles in it.

This auction is open to the public and anyone can join in, and you just have to simply sign up to get yourself a number and start bidding.

Government Auctions

You know all of those white equinox’s running around that have government stickers, or those police interceptors. 

Well they have to be sold somewhere as well, and Government Auctions is that place!

They also use these auctions to sell off seized property, including cars and trucks.

You can find out more on how to find these auctions by visiting usa.gov’s page here.

Online Auctions

This is becoming more and more popular as time goes on. An online auction will be held entirely online. There are definitely upsides and downsides to this though. 

One great thing about these, are that online auctions can be bid on wherever you are in the country!

One not so great thing, is you aren’t able to see the vehicle in person, and sometimes just that one quick glance at the vehicle in person tells you that this isn’t the one for you.

How much do cars go for at dealer auctions?

Cars will sell at a huge array of prices, discounts, and more. However you need to keep in mind that auctions are where dealers tend to buy many of their used vehicles, so you will likely buy it at a decent discount.

You will however want to weigh the upsides of that discount with the downsides of not being able to test drive the vehicle, as there may be further issues that you will have to fix that may eat away at that discount and more.

Can anyone go to an auto auction?

This really depends on the auction itself, some may be invitation only, some may only be for dealerships only. The best way to find your local public auction that anyone can go to, or drop off cars for sale, is to google “public car auction near me”. 

Buying a used car from dealer who bought from an auction

Once you have been to an auction, and have started to see the quality and condition of the cars at these auctions, you may start to wonder if you really should be buying a car at a dealership that was bought at an auction.

My thoughts are, yes, you can still buy a car from a dealer that was purchased at an auction. However I would highly recommend always getting a car fax report, even if the car is at a dealership.

On that report, you will be able to find if it was maintained well, how many people have owned it, if it was a lemon buyback, and more.

Conclusion

I hope this quick guide to why vehicles go to car auctions, and a little bit on how to shop at them has helped you understand this a little bit more.

Auctions can be risky to buy a car at, however if done right, they can also really pay off.

My personal recommendation: If you are mechanically savvy, I would buy vehicles that were in smaller accidents and repair them. These cars tend to have been driven up until the accident, and haven’t sat, and are less likely to have not been taken care of.

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