Have you ever experienced the stress of needing a vehicle and not having one? Whether your commute doesn’t accommodate public transportation, or you simply need to spend a lot of time travelling, having a car is essential for many people. But, however important a car may be, buying a new one is not necessarily in the cards for everyone. Dealerships — both old and new — are a go-to for many, but their credit requirements, high interest and often high prices can be a problem for some. Private sellers are a good option in some circumstances, but they don’t usually come cheap in the long term.
The process of finding an affordable and safe ride can be overwhelming. Car auctions in Ontario offer a frugal-friendly way to purchase a car for those on a budget. Of course, auctions can be somewhat overwhelming. You must know what to look for and what to expect, and understanding auctions is a great place to start.
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
These are typically private auctions, closed to the public. The prices are usually quite attractive; and, 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 bottom line 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
There’s a lot to like about car auctions. For starters, there’s a unique level of diversity amongst the cars sold. With many ways to attend an auction, it is also a fairly accessible way to approach vehicle purchases. Some of the many perks include:
Vehicle Diversity
The cars hitting auction are always different, giving you access to many different vehicles than you would find if otherwise looking for a car.
Low Prices
Cars sold at auction are some of the most cost-effective vehicles around. Because of their back-stories, you can find vehicles at a fraction of the cost without necessarily speaking to the quality of the car.
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 carries a lot of weight.
Cons
Car auctions aren’t perfect. There are a few downsides to this approach, namely the gamble of getting an as-is vehicle. Unlike dealership options that can carry a warranty, if you get a car that needs a lot of work, there’s no real recourse except a (potentially costly) mechanic. Among the downsides are:
Variety Is A Gamble
When you go to an auction, 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
At an auction, unless it’s conducted online, you are likely to need to pay in cash. It eliminates the opportunity to get a car loan; and, though the price of cars at auction is much less than market value, you’re still paying for the whole thing upfront. Small personal loans are an option to access the cash for the auction car yet still make payments on the full amount, but that would require advanced planning.
Things To Keep In Mind When Buying A Car At An Auction
When you go to purchase a car at an auction, there are a few key factors to consider. 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 do not 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
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 are making a worthwhile investment.
Check The Car’s Certifications Before Buying
When you’re buying the vehicle (unless it’s something you plan to repair as a hobby), 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 can ensure that you don’t get caught up in the action. It helps you stick to a budget and can make the process more enjoyable. If you’re doing the process online, video chat with a friend to talk through your ideas on bidding.
Watch Out For Used Car Dealerships At Auction
Research is about more than researching 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 on auction. Used dealerships can also be marking them at a higher starting bid than is warranted as a way to recuperate their investment in the car.
Buyer’s Fee
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, then you are expected to pay a fee to the auction house (or virtual auction house). Typically in the range of $500, this is to pay for the service of accessing the auction itself. It’s a fair component of the auctioning game, but it must be factored into your bottom-line budget.
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.
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. In general, when you have access to this information, you are less likely to end up with a lemon.
Step 3: Arrive Early
If you are planning to go to an in-person auction, be sure to arrive early. Take that extra time to look at the vehicles available. If you’re early enough, you might be able to test drive the car. 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. The Bidding Process
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 car’s pique your interest, you can duck in and out, provided you’re there to bid on the cars you want. Set a budget. Stick to it. If you do that and don’t get caught up, auctions can save you a lot.
Step 5: Buy The Car
If you make the winning bid, you are the proud owner-to-be of the car. It doesn’t automatically put it into your possession, though. You will be asked for a downpayment of roughly ten percent, in addition to the auction fee. Be sure of the payment options available to you. Most opt to get pre-approval for a car loan, proving that you can pay for the vehicle on which you bid. After the paperwork is complete, and once your registration is up to date, you are the official owner of a car you bought at auction.
Car Auction FAQs
What type of cars are sold at auction?
What happens if the car I buy at an auction needs extensive repairs?
Who can buy a car at an auction?
Can I finance the car through the auction house?
Do I need cash to buy a car at an auction?
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 and keep your wits about you throughout, you can get a high-quality car at an impressive price. It’s not a quick process, though. Auctions involve research, time, and effort, but they can reveal hidden vehicular gems for a fraction of their market price.
