What is a Free Auction?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Image By: Car Leasing Made Simple
  • Last Modified Date: 20 June 2019
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Free auctions are auctions that are open to participation by just about anyone. Auctions of this type normally do not require registration in advance to participate, or may require nothing more than supplying basic information such as the name of the potential bidder. In most countries, there are regulations that govern participation in a free auction, including requirements that have to do with the age of the bidder. Auctions of this type may take place at a physical location or in an online environment.

Just about any type of auction situation can make use of the free auction approach. Car auctions are an excellent example. In many countries, potential bidders do not have to register in advance. Registration takes place when appearing at the site the day of the auction. Even then, the bidder must only present proof of identification, and be considered an adult. There are some situations where the bidder must present proof of the ability to pay, but this is not always the case. In recent years, the advent of the online car auction option has been integrated into the bidding process for physical auctions, as well as allowing this type of free auction to take place in a totally virtual environment.


As with any type of auction, a free auction establishes procedures where the items won are transferred to the new owner, once payment is received and verified. In some cases, the auction house is involved in the transfer, releasing the items to bidders once payment has been rendered. Depending on the type of payment involved, the auction house may reserve the right to retain possession of the item won until the payment has been verified by the issuing financial institution. When the payment is made electronically and is immediately verifiable, the property can be immediately released.

Many online auctions make use of the free auction model. Bidders are required to sign up for an auction account, which allows them to log into the site, browse the items currently up for bid, and to place bids when and as desired. Inherent in this process is the covenant of the bidder to pay for any of the items he or she wins, with those payments rendered in accordance with the terms outlined by the individual or entity that created the auction. Failure to do so can lead to the revocation of bidding privileges and permanent banning from the auction site.



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