If you’re looking to buy a car, your first thought may be to head to your local dealership or peruse online listings on a vehicle selling platform. But there’s another option: auctions. Buying a car from an auction in Ontario can be a good way to save some money and gain access to a greater selection of vehicles. However, buying a car from an auction can be a complex process, especially for first-time buyers. Understanding how car auctions work in Ontario and where to find them is important to ensure a streamlined process.
Key Points
- Different types of auctions are available, including dealership, public, online, and government auctions.
- Car auctions may be a great place to get a good deal, but they also come with the risk of buying a vehicle in need of extensive repairs that you may not be aware of before committing to the purchase.
- Before heading to a car auction, know your budget, research the make and model, and get your hands on the car’s certification (if possible).
How To Buy A Car At An Auction
Ready to find that hidden gem and explore the world of Ontario car auctions? It’s a fairly straightforward process; which, when properly handled, can result in serious savings on a car.
Step 1: Find An Auction
Find an auction house and register. You can find them easily online. Type in the name of your municipality along with car auctions in your preferred search engine. Check its location and look into its standing in the community.
Once you’re confident, register as an attendee.
Here are a few places you can check out:
| Manheim Canada | Manheim hosts both online and in-person car auctions across Canada, including major provinces like Ontario and Quebec. |
| ADESA Canada | ADESA hosts public auctions across the country including Montreal, Toronto and Vancouver. |
| Police Auctions Canada | Police Auctions Canada hosts auctions for various seized assets, including cars. So you may be able to find cars in good shape that have been seized by the police. |
| Canada Buys | The Government of Canada sometimes auctions off surplus cars through public auction. |
Step 2: Do Your Research
Do some research prior to the auction. Investigate the vehicles up for bidding and figure out which ones catch your interest. If you have the opportunity to look into specific car details, do so. Check the Vehicle Identification Number (VIN) against a public database to learn about any issues in the car’s past.
The more information you have, you’re less likely to end up with a lemon.
Step 3: Arrive Early
If you’re planning to go to an in-person auction, be sure to arrive early. Take that extra time to look at the vehicles available.
For those with the option, you can bring along a mechanic (or friend with a lot of car knowledge) to look under the hood. A trained eye can spot red flags more quickly and save you a lot of hassle. You don’t want to be doing your investigation in the midst of a crowd, so give yourself the extra time and get there early.
Step 4. Bid On A Vehicle You Want
The auction will show the cars in a predetermined order. Typically, there is a copy of the schedule. As long as you arrive early and know what cars pique your interest, you can duck in and out, provided you’re there to bid on the cars you want.
Step 5: Buy The Car
If you make the winning bid, you’re now the proud owner-to-be of the car. It doesn’t automatically put it into your possession, though. You will be asked for a down payment of roughly 10%, in addition to the auction fee. After that, the full payment is usually required within a certain amount of time, usually between 24 hours to a few days.
After the paperwork is complete, and payment and registration is complete, you are the official owner of a car you bought at auction.
How Can You Pay For A Vehicle Purchased From An Auction?
Depending on the auction house, a variety of payment options may be available. Most places will accept a bank draft, certified cheque or direct debit. Some places may also accept credit cards or cash. Funds may be sourced from a personal or car loan.
- Unsecured Personal Loan. Much more expensive vehicle purchases may be too much for you to cover in an all-cash deal. In this case, you may consider getting an unsecured personal. You’ll want to shop around for loans from different lenders before heading to the auction house. It’s also a good idea to get pre-approved for a personal loan so you know how much you can afford.
- Used Car Loan. You can apply for a car loan from a bank, credit union, or online lender. Use an online loan comparison site like Loans Canada to find used car loan lenders and the rates and terms they offer.
Learn more: How To Finance A Used Car In Canada
Types Of Car Auctions
The first thing to understand is that not all auctions are made alike. Depending on the type of auction you’re considering, you can expect a certain experience (and budget). Options include:
Dealership Auctions
Dealership auctions are typically private, which means they’re closed to the public. The prices are usually quite attractive. Provided you get an invitation, the cars are often in new, or next-to-new condition.
However, dealership auctions can be tricky to access. While you can reach out to the proprietor directly, it might be easier to try one of the more open options.
Public Auctions
This type of auction often consists of cars that were repossessed from banks, traded-in vehicles, and wholesale sets of cars. These increased in popularity recently, with many households competing for the best price. As such, while you can get a good deal at these auctions, you can also end up overpaying for something subpar if you don’t set a price threshold in advance.
Online Auctions
As the world shifts into an increasingly digital atmosphere, auctions have moved online. These operate similarly to in-person auctions, and for many, are more convenient. You must register with the auction beforehand and are able to see the different cars available.
The bidding process is virtual and completed over a set period. Ensure that you have a reliable internet connection to avoid issues during the bidding period.
Government Auctions
When vehicles get impounded due to traffic infractions or other criminal activity, after some time they become available at auctions. Also offering commercial vehicles like utility trucks used for government work, these auctions tend to be extremely competitive. The vehicles range in quality (as with any auction) but they also give an opportunity to get a good deal on a car.
Pros And Cons Of Buying A Car At An Auction
As with any method of purchase, there are upsides and downsides. Buying a car from auction in Ontario is a good way to go for many, given the competitive prices. However, it’s also a time-consuming choice.
Weighing the pros and cons is about identifying your personal priorities and making sure it’s worth the effort.
Pros Of Buying A Car At An Auction
There’s a lot to like about car auctions, including the following:
Vehicle Diversity
The cars hitting auctions are always different, giving you access to many different vehicles that you may not otherwise find.
Low Prices
Cars sold at auction are some of the cheapest vehicles around. Because of their backstories, you can find great vehicles at a fraction of the cost.
Convenience
Instead of going from dealerships to private lenders and back to the used car lot, an auction offers a one-stop solution for variety and affordability. If you’re in urgent need of a vehicle and don’t have the time to jump through the hoops of standard car purchases, the convenience can be tough to beat.
Cons Of Buying A Car At An Auction
Car auctions aren’t perfect. There are a few downsides to this approach, including the following:
Variety Is A Gamble
Unless you take the online approach, there’s no effective way of knowing what you’re getting into. It could be an endless lineup of minivans. Or it could be a range of cars, trucks, and SUVs. If you’re willing to put in the time, you can eventually find something amazing, but it might take more than one attempt.
Vehicles Are Sold As-Is
Let’s say you find that perfect car at an amazing price, win the auction, and drive away. If your radiator is cracked or your brakes are compromised, that is your responsibility. Unless you have a lot of mechanical knowledge and expertise, it’s difficult to gauge. While auction providers aim to keep their names in good repute by dealing with quality vehicles, there is always a chance of getting a lemon.
May Need To Pay In Cash
Unless the auction is conducted online, you’re likely to need to pay in cash. At the very least, you’ll need to have some cash upfront to cover the auction fees or part of the vehicle’s price.
Things To Keep In Mind When Buying A Car At An Auction
There are a few key factors to consider before buying a car at an auction. The key to succeeding in any large purchase is research and preparation. So long as you keep your priorities fixed in your mind, you can have a good auction experience.
Know Your Budget
Auctions are designed to play off of the natural fear of missing out. Things move quickly, and it’s easy to get caught up in the high-energy current of your surroundings. However, if you get swept away, you could find yourself in a bidding war for something that’s not worth the extra cash.
The key is to set a firm bottom line and don’t waver. Even if things don’t go your way, there’s always another opportunity (as long as you don’t blow the whole budget on an impulse buy).
Research The Make And Model
If you have the opportunity to look into the cars up for auction, do so. Most will specify certain specs on the vehicle, especially if the auction is online. Take it a step further and research the make and model. Determine the wear it is likely to have incurred based on the mileage on the odometer.
Also, check the value. It might seem like an auction will guarantee you a good deal, but that’s not necessarily true. Be sure you’re making a worthwhile investment.
Check The Car’s Certifications
When you’re buying the vehicle, make sure that it is road-worthy. Certain jurisdictions preclude the registration of vehicles once they reach a certain age. Ensure that you can actually use the vehicle you’re getting.
Bring Help
Auctions can get overwhelming. By going with a trusted friend, you’ll have someone to help prevent yourself from getting caught up in the action. It helps you stick to a budget and can make the process more enjoyable.
Watch Out For Used Car Dealerships At Auctions
Research is about more than looking into the items up for auction; it’s about investigating the sellers. Used dealerships may be trying to offload subpar vehicles under the illusion of a good price.
Trade-ins that aren’t eligible for standard sale often pop up at auctions. Used dealerships can also mark them at a higher starting bid than is warranted as a way to recuperate their investment in the car.
Buyer’s Fees
Auctions are businesses too; and, in order to stay that way, they need to make a profit. If you make the winning bid on a car, you’re expected to pay a fee to the auction house. These fees are typically based on the final sale price of the vehicle and can cost you hundreds of dollars that you should budget for.
Should You Buy A Car At An Auction?
Buying a car at an auction may be a great idea for some people, but not necessarily for others.
| When You May Consider Buying A Car At An Auction | When You Shouldn’t Consider Buying A Car At An Auction |
| – You want a lower price – You have cash readily available – You’re knowledgeable about cars or have a mechanic’s help – You’re comfortable with the auction process – You’re fine with dealing with repairs | – You need a reliable car – You’re not familiar with vehicle inspections – You don’t have cash readily availableYou’re not comfortable with the auction process |
Final Thoughts
Car auctions represent a unique approach to purchasing a car. They are best when you have the time to spend and want to save as much money as possible. Provided you plan ahead, do your research, and keep your wits about you throughout, you can get a high-quality car at an impressive price.
