Should You Buy a Vehicle at an Automobile Auction? Here's What You Need to Know
Posted by: Lydia on 17/01/2019
When it comes to buying a car in the Great Southern Land, it’s easier than ever before.
There has been a growth in diversity throughout the car market in recent years and decades, as more car manufacturers have expanded their offerings in Australia. Alongside traditional dealerships, online car sales have made it a breeze to find the exact car you want to buy.
Given all these changes, it's no surprise that many Aussies are intrigued by the idea of buying a car at auction. With a best-case outcome, a car auction could allow you to buy a fantastic car at well under market price. But what do you need to know before you try to buy a car at auction? What factors are important to think about? Here's a look.
Who’s holding the hammer?
In Australia, car auctions can only occur with a licensed motor car trader. Certainly any Aussie is allowed to sell their own car via private sale, but if you roll up to inspect a car in person and find the owner setting up an auction in their driveway, keep driving.
This can get confusing in terms of online sales. After all, certain sites are a lot like an auction. Given that Aussies spent over $21 billion in 2017 buying goods online, it’s no surprise that many cars are now bought and sold on the internet.
But the differences here can be really important. When you buy a car in person at auction, if you have the winning bid, you can expect to receive the car. It can be trickier online, as sometimes sellers may be offering their car on other websites at the same time, or advertising with signs in their local community. This means there's no ironclad guarantee that even if you place a winning bid that you're certain to get the car. For example, the seller may have already sold it, but forgot to update their online listing.
This is why it’s really important to be cautious when it comes to buying online. The easiest way to ensure you don’t bid and end up disappointed is to message the owner of the car before placing a bid and confirm that it's still available. That way, you can be more confident that your bid will offer you a direct line to securing the car if you become the winning bidder.
The cooling-off period
When buying a car at a dealership, it's usually possible to change your mind and pull out of the deal during the cooling-off period. You may sometimes be subject to a bit of a financial sting for doing so, but this option exists because it’s recognised in the world of car buying and selling that sometimes people change their minds.
This is not usually possible when it comes to a car auction. Typically, if you have the highest bid at or above the reserve price (set by the seller prior to the auction), you are required to complete the sale. So it's really important to be 100% sure you want the car and can and will follow through with the purchase before you bid on it.
It’s also important to understand that the same protections are not usually in place when it comes to an auction versus buying a car from a dealership. Dealerships must follow certain laws around car sales that auctioneers and private sellers don’t always have to. The benefits of this can mean more flexibility when buying, but the downside is the risk of less protection if something goes wrong.
As detailed by CHOICE, "When it comes to the Australian Consumer Law, you're only fully covered if you buy your new or used car from a dealer. If you buy your car via private sale, direct from the manufacturer or at auction you're only likely to be partly covered by consumer guarantees." That’s why many cars auction sold at auction are sold on the basis of ‘buyer beware’.
Local rules in a national market
When considering buying a car at auction, it’s also important to keep location in mind. The law can sometimes vary among the states and territories throughout Australia. You may think it’s unlikely you’ll be bidding for a car outside your local market, but it’s important to remember rare cars can come up for sale unexpectedly.
You may find a car you really want set for auction in a neighbouring state, and next thing you know, you're bidding over the border. The same may apply when it comes to bidding for a car online. It’s important to check the local laws where the seller is. This will not only ensure you get the car fair and square, but will also tell you what recourse you may have available (if any) under local law if the car turns out to be a lemon.
Going once, going twice, sold!
Buying a car at auction can be more complicated and risky than buying via a dealership or private sale. At the heart of this bigger challenge will be the time factor, and also some nerves about whether or not you’ll be successful.
That’s why it’s important to keep in mind that there will always be more auctions in future. By all means go into any auction optimistic and ready to put forward a competitive offer. Just also remember that if you notice the bidding going beyond your budget, there are always other cars and other auctions out there. Even if it doesn’t turn out to be your day winning at auction, the next time around you’ll have experience under your belt and be all set to win the car.
What has your experience been like buying automobiles at auction? Let us know in the comments below: