08/07/2009 01:21 | By By James Ruppert, contributor

Buying a used car at auction

A used car auction (© image © PA Photos)

Buying at auction

Here it is, perhaps the most risky way to acquire a used car. Whether you buy privately, or from a car dealer there is no guarantee that you will pay the bottom line price.

To do that you would have to buy at an auction. The trouble is, things happen fast at auction, very fast indeed. If you miss one lot, another one will be along in a minute and then another and then another.

Not surprisingly auctions are not for everyone. However those who are prepared to do some research and use their common sense can buy a used car at a wholesale price. That is reason enough to consider making a bid at an auction.

The way auctions operate

It is very simple. Vehicles are sold on behalf of the owners, who complete a legally binding form (the Entry Form) which attests to the vehicle's age, mileage and condition. Usually a reserve value is set, which is the lowest figure the seller will accept - the auctioneers cannot sell below this value. Auctions are really the stock market of the used car industry.

Often vehicles are categorised; there may be executive and prestige sales, late year and low mileage. It is at the general sales where just about any type of vehicle, usually the older ones that we Bangernomics students love, can turn up.

On the sale day itself all the vehicles will be lined up by lot order in their correct sale section ready to be sold and can be displayed under cover in well-lit viewing areas or outside. A sale catalogue on the morning of the sale can be used by buyers to help them locate potential purchases. Viewing is normally from 9.00 am, with sales starting at 10.00am on the busiest days. However there are evening and Saturday sales aimed more at the private buyer with cheaper cars although the larger number of buyers can push up prices.

When the sale starts vehicles are driven into the auction hall in lot order. The car on sale stops in front of the rostrum and the auctioneer describes it to the buyers. Listen closely to what the auctioneer says: that description is legally binding. They could be warranting the mileage, mentioning any major mechanical faults, the existence of a service history, MOT or whether there is a reserve price.

Then the auctioneer will ask for a starting bid on the car. The bidding increments are controlled by the auctioneer reflecting the interest from the auction floor. Typically bidding is done in £100 increments or less (sometimes as low as £10), but it is not unusual for £200, £5,000, or even £1,000 bids on high value cars. Don't worry about sneezing, or scratching your itchy nose. There are all sorts of apocryphal stories of people buying cars by mistake, but in today's professional market, that is never going to happen. Just bid clearly by raising your hand.

What cars go to auction?

Just in case you wondered, cars come from either the general public, dealers, company fleets, local authorities or finance companies. The dealers dispose of cars because it is an unsuitable part exchange as it is too old, or just the wrong make. Also the car could be too expensive to put right. Quite simply the car may have been stuck on their forecourt without finding a buyer and the dealer would rather have money in the bank than a depreciating hulk in the showroom.

It is much rarer to find ordinary members of the public putting their cars through the auction but they will often do so either because they don't want the hassle of selling privately, or that it has been advertised without finding a seller. Again, there may be something wrong with the car that is uneconomic to put right, or won't show up on its brief drive through the auction ring. That is why you need to be so careful.

Another group of vehicles are those classed as stolen/recovered and sold by finance or insurance companies. Often they are damaged, but they can be in perfect condition too. Other sources of auction fodder are the fleet and company cars which are usually no more than two or three years old, often with a high mileage but backed up by a full service history. Vehicles also come from utility companies or the Police. They may have lead a hard life but once again maintenance has usually been a priority

Choose your auction

Find your auction by looking in the yellow pages - there may well be more than you imagined. Even the classified section of your local paper. Ideally they should be a member of the Society of Motor Auctions who abide by a code of practice.

Your first visit must always be your research trip. Leave all your money at home and just watch what goes on. It may frighten you off and for some that might be a good thing. Auctions aren't for nervous types.

Get a copy of the Conditions of Sale and Entry and any other information issued by the auctioneers. You will find out what rights you do and don't have especially as rules vary between auction companies.

Take a price guide with you which you can buy in the newsagent so that you can see what the vehicles are making compared to the wholesale trade, private or dealer price. Ideally it will be around the trade valuation. But always remembers these guides are just that, guides and some models are more in demand than others.

Also private buyers can push prices beyond what a dealer would be prepared to pay. Condition is vital and ultimately a car at auction and anywhere else for that matter is only worth what someone is prepared to pay.

Auction language explained

Before the sale starts listen carefully to what the auctioneer says and also read any stickers on the car windows carefully.

'Without reserve' means that the car will be sold to the highest bidder.

'Reserve' is the minimum the seller will want for the car, not usually revealed before sale, unless it has been entered previously and didn't sell. Sometimes the auctioneer may give a clue to the reserve.

'As seen' is what you see you get, including all the faults. Some cars fall into this category merely because of the seller's policy.

'All good', 'on description' or 'no major mechanical defects' sounds promising, but it only applies to the major components. So although the engine, gearbox, axles, steering, suspension and brakes may be fine, instruments, electrics, tyres and trim may be broken or damaged. Some auctions may offer an insurance backed warranty to cover this.

'Warranted all good' actually guarantees that the car is as described with no major mechanical faults, so a warranted mileage and service history. A successful bidder can therefore reject a car if it is not up to these standards.

'Specified faults' can be underplayed so a phrase such as 'worn gearbox' could actually mean that it is permanently stuck in second. It is worth bearing in mind that an auctioneer is acting as an agent for the seller and may only know as much about the car as they have been told.

Auction Survival Kit - what to take with you

Cash: the minimum amount required to pay a deposit, read the conditions of entry to find out how much.

Friend: to stop you making any rash bids, or buying something that you don't need. They can also drive you to the auction so you don't have to pay a delivery charge or make a return visit.

Old clothes: after all you will be crawling around getting a closer look won't you?

Torch: All the better to look into those nooks and crannies.

Magnet: When in doubt about filler rely on the old fridge magnet test.

Price guide: Newsagent price guides do what they say.

Tool kit/gallon of petrol to help you get the car you bid for home. Don't carry the petrol can around with you.

Buy a catalogue

The cars will be parked together and on the windscreen will be a lot number. This gives some indication of the running order, but don't rely on it. There may also be some information about the car such as make, model, mileage and perhaps a brief engineer's assessment, which may not be binding anyway. Watch out for 'sold as seen' and 'recorded on Vcar register'. Don't pin all your hopes on one lot. It could be withdrawn, you might change your mind, or you might not bid enough to buy it, so draw up a shortlist of lots.

Checking the car

There isn't a lot that you can check. The cars are usually parked so close together that they will restrict your view and mostly they will be locked and won't be started until a few minutes before they go into the auction hall.

Tyres - for their condition tread and brand.
Entry form on windscreen - read carefully for major faults warranties and mileage.
Lot number - so you know roughly where it will appear in the sale.
Bodywork - look for rust, poor repairs and panel alignment.
Trim - anything from a cracked windscreen to missing or damaged accessories.
Interior - look for wear and tear, best done when the car is in the auction hall.
Engine - are there oil leaks where it is parked? Be there when it is started so that you can check for smoke and listen for noises. The auction driver will usually let you pop the bonnet when it is in the auction hall.

How much to bid?

Now is the time to set your budget. Look at the guide trade price and bear in mind what similar vehicles made at the previous sales you attended. The questions are what can you afford and more importantly what are you prepared to pay? Obviously there is no point bidding up to what a main dealer would charge for a car with a year's warranty.

Don't forget about VAT because if you buy a commercial vehicle and are not eligible to claim it back you will be paying 17.5% more than you thought. Usually it is pick up and van variants that are chargeable. So listen carefully to what the auctioneer says about the lot before they invite any bids.

Auction Action: our 10 point bidding plan

1. Before your lot is called position yourself near the car you want. Use your friends if the lots you are after are close together.

2. Watch the car being started. Does the oil light go on and off quickly? Does it start first time. Does the engine sound healthy? Are there any strange noises. Is there thick black smoke from the exhaust?

3. When driven to the auction hall it will join a short queue of cars. Now is your chance to take a good look inside. Maybe ask the driver to pop the bonnet. Make your decision now, do you want to bid for this car?

4. If you want to bid place yourself in view of the auctioneer and listen. What they say now is crucial. Listen out for the good points like a warranty and guaranteed mileage and also any negative ones like 'gearbox trouble'.

5. Now programme yourself. What is your budget and if you have a friend with you remind them to stop you bidding above that.

6. The auctioneer suggests an opening bid and usually it is an optimistically high figure. Don't get sucked in too early. Wait and see what happens.

7. When you do bid raise your arm clearly and confidently. Be aware of the margin of the bid: is it £50, £100, or £500 or more? If you want to make your bid less tell the auctioneer. Don't worry if the auctioneer ignores your bid because they usually concentrate only on two bids at a time.

8. If you seem to be bidding against someone you can't see, it is permissible for the auctioneer subject to their company rules, to take 'bids off the wall'. They do this to get closer to the reserve price. So don't get carried away and exceed your bidding budget.

9. If you drop out of the bidding a shake of the head is sufficient to indicate this to the auctioneer.

10. If your bid is successful you will be required to pay an immediate deposit, usually 10% or a fixed sum in cash to the rostrum clerk.

After the sale

The balance will need to be paid within a short period usually with 24 hours, or sometimes before the auction closes, by cash, banker's draft or credit/debit card. You may also have to pay an indemnity fee on a sliding scale according to the cost of the vehicle which insures you against the car being stolen an insurance write off, or still on finance. Bear in mind that if you delay in paying the full amount you will probably be charged storage fees, so don't dally.

If your bid was successful but it does not exceed the reserve figure set by the seller, the auctioneers will contact them to find out if they will accept less. In the meantime don't bid for another car or you might end up with two!

Should the seller make a counter offer the decision is yours, but don't exceed your budget, or pay more than you think it is actually worth.

If you have a bought a vehicle that came with a trial, in most cases you will only have one hour after payment to drive the car and find a serious fault. If a car is sold on an independent engineer's report (attached to the windscreen), or 'with no major mechanical faults' then that is exactly how you should expect the car to be. Remember that it is up to you to check the car's overall exterior condition - paintwork, trim, tyres and the interior, seats and carpets - for example - prior to sale. All these factors are 'sold as seen'.


Once you have paid, the office should be able to give you all the relevant paperwork, MOT, service history and V5 registration form, plus a radio front, or anything else removed from the vehicle for security reasons. You will also get a pass out form allowing you to take the car off the premises. If the V5C document is missing, the auctioneers receipt is sufficient proof of ownership until you can apply to the DVLA for a new V5C.

Before you drive off though make sure that your insurer will cover you. Also remember that whatever the MOT may say the vehicle has to be roadworthy. One balding tyre or a dodgy wiper blade is illegal and ought to be fixed. It is not unknown for the constabulary to lie in wait at the exit of auctions and nick unroadworthy vehicles.

When you get the car home sort out any problems as a precaution and unless there is any evidence that it has been done recently you should have the car serviced.

Bangers under the hammer - coursework


The best way to learn about an auction and find out if you are comfortable with the whole experience is to go to as many as possible. Don't bid, don't take any money and just look and learn and walk around for several hours.


Write down prices. Compare and contrast with the prices in classified ads. They might not be too much different.


Look at the condition of the cars at the auction. Would you buy or at least bid for one?

09/06/2012 22:12
Something very important about buying at auction.
If a car is bid for and the hammer drops, then the bidder has bought the car and it is bought under the terms by which it is offered, with or without warranty or trial. The law states vaguely that if an item is sold under competitive tender ie people biding against each other then they are seen to be offering what they think it is worth so no consumer rites under the sale of goods act other than the vehicle must be as described.
However, cars are more often than not, not sold under the hammer and the purchaser is told that their bid will be submitted to the seller, if this bid is accepted, then the same rule of competitive tender still applies, but IF THE BID IS DECLINED BY THE SELLER,  AND THE BUYER IS ASKED TO PAY A HIGHER PRICE FOR THE CAR, the element of competitive tender is now GONE and the transaction is now a straight forward sale and would be covered under the sale of goods act, you are entitled to your full consumer rites and cannot be asked or even hinted at to give up those rites, your contract is with the car auctions and they must give you a proper warranty exactly the same as any other carp dealer, if in a couple of months you get a problem take it back, they will tell you that your are wrongly informed, but this is a fact. I raised the issue with trading standards about why auctions could sell as sold as seen but car dealers could not, they had no idea so I pushed them to find out, it took 3 months and the above was the final conclusion.
23/10/2010 16:55
Open-mouthedgood bit of info recomend any one not used to auctions to go by 
06/01/2013 16:57
Brilliant piece of info , thank you .
26/08/2013 11:20
Is there any auction center in Nigeria?
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