How do you buy your car at auction?


A driver pays for his purchase by bank card photo credit: Gettyimages

Auto auctions are on the rise. They are organized regularly throughout France and allow you to take advantage of attractive prices. How are these sales going? Is buying your car at auction really a good plan? What precautions should be taken to avoid disappointment?

Summary:

  • Summary

  • What type of vehicles are in the auction rooms?

  • Start by examining the vehicle carefully

  • Be aware of the additional costs of auctioning a vehicle

  • How does an auction take place?

  • Auto auctions: remedies and liability in the event of a problem

Summary

What type of vehicles are in the auction rooms?

Start by examining the vehicle carefully

Be aware of the additional costs of auctioning a vehicle

How does an auction take place?

Auto auctions: remedies and liability in the event of a problem

What type of vehicles are in the auction rooms?

Every week thousands of cars of all brands

are sold at auction, often at a price lower than their market value. From the small city car to the minivan, via the large sedan or the SUV, the vehicles presented are different both in terms of model and their origin. The sales calendar is available on the interencheres.com website. Very often it is also possible to access the online sales page and follow the auctions remotely in real time.

There are two types of public auctions:

  • Voluntary auctions. They relate to vehicles freely given by individuals or professionals to be sold to the highest bidder. There are mainly vehicles from fleets of companies or administrations, rental companies, leasing companies or even credit organizations.

  • Legal auctions. These are assets that have been seized in connection with bankruptcy or following a court decision. All types of vehicles can be represented: sports car, luxury sedan, utility or even motorhome.

Auctions are open to individuals and professional car sellers. They are organized under the direction of an auctioneer. The presence of this sworn professional is a guarantee of seriousness and safety for the buyer. If the vehicles are stolen, then found or damaged, the auctioneer is required to indicate this at the time of the sale.

To know

The two main players specializing in car auctions are Alcopa Auction and VPauto.

Start by examining the vehicle carefully

As a starting point, the cars are exhibited in the auction room to the public a few days before the auction. Examining the vehicle you are considering buying is an essential first step because it allows you to get an overview of its general condition: bodywork (scratches, bumps), rocker panels, tires, interior… You can ask to sit behind the wheel and start the engine, but you cannot drive the car. Take the opportunity to check the lights on the dashboard, wear on the steering wheel and upholstery, the pedals…

Gather as much information about the vehicle as possible. The characteristics are displayed in the catalog that groups them

advertising vehicles sold at auction and is affixed to the windscreen. You will find the model, mileage, equipment and options, date of entry into service, starting price and sometimes the origin of the vehicle.

All cars sold must have one

recent technical inspection carried out in an approved centre. This is displayed on the vehicle and only relates to points related to safety: lights, brakes, accidents, etc. It is recommended that you carefully read all the documents you have provided, especially the maintenance booklet. The more up-to-date it is, the more reliable information you have about the vehicle being offered for auction. If you wish, you can be accompanied by a qualified expert. This service is billed on average around 100 euros.

Be aware of the additional costs of auctioning a vehicle

Set a budget taking into account the condition of the vehicle. To provide a consistent quote, you can rely on the Argus rating and the displayed prices for an identical model on online sales sites. On average, vehicle appraisals are 20% below market prices. Below a 15% saving compared to the price of Argus, the auction is often less attractive.

Various costs will be added to the price advertised in the room. All these elements (payment terms, sales costs, vehicle pick-up conditions, etc.) are summarized in the sales terms, presented on the Internet and in the catalog. Consider including these amounts in your total budget:

  • Auction fees vary by auction house, but are generally between 12 and 15% of the vehicle’s price.

  • Administrative fees of around one hundred euros are often requested from the buyer.

  • There may be additional fees if you bid online.

  • To get back behind the wheel of the vehicle, you must take out temporary insurance.

  • You may have to pay parking charges if you don’t collect the vehicle within the deadline (or delivery charges).

The boom in the used car market

The automotive industry has been hit hard by the Covid-19 pandemic. The shortage of electronic components imported from Asia has caused the production of new cars to plummet, prompting many buyers to turn to used cars. In 2021, the used car market registered a record growth of 8%, surpassing the threshold of 6 million transactions for the first time. The proportion of registrations is 3.6 used cars for a new one. On average, prices have risen 13% in 2021.

How does an auction take place?

You can go to an auction room even with no immediate intention to buy to see how a sale actually takes place. This first visit allows you to discover this rather special world of vehicle auctions. On the day of the sale, avoid rushing and bid at the opening price. Observe first and show up when the bidding pace slows.

Make sure you never go over budget. Bidding can be exciting and in the heat of the moment you can acquire the vehicle for a price higher than its listing. In the event of a losing bid, don’t fall back on a less attractive model and instead wait for another sale. When you win the auction, you agree to pay the stated amount and the associated costs in full. Fines may be imposed when the purchase intent is not complied with. Furthermore, you have no right of withdrawal and therefore cannot exchange the vehicle or get a refund.

Complete the purchase of your used car at auction

Once the vehicle is sold, you must go to the counter in the auction room to confirm the hammer price and pay a deposit, usually by credit card. Full payment in cash on the day of sale or within 48 hours thereafter. Vehicles purchased at auction cannot be financed. Check with the bank in advance if you need a loan.

Auto auctions: remedies and liability in the event of a problem

As mentioned above, you have no right of withdrawal. However, there are funds if problems arise after the sale. In the context of voluntary sales, the commercial company at the origin of the sale acts as an agent for the owner of the vehicle. It is therefore an intermediary, and the buyer has the same rights of appeal against the seller as in an amicable sale. In the case of a hidden defect or non-conformity, you can request a remedy, that is, cancellation of the sale or reduction of the price, or even compensation for the damage suffered.

The law prohibits any action for latent defect in judicial sales, but there is recourse. The auctioneer is in fact civilly liable for any shortcomings committed in the performance of his mission if they cause damage to the chosen bidder (the buyer). This type of liability will not allow you to request cancellation of the sale, but only to request compensation and interest in compensation for the damage suffered.

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