What is a Public Auto Auction?

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  • Written By: Phil Shepley
  • Edited By: Jenn Walker
  • Images By: Snehit, Michael Shake, Car Leasing Made Simple
  • Last Modified Date: 20 May 2020
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A public auto auction is a sale where many cars are sold to members of the public who bid against one another to buy a vehicle for the cheapest price possible. Auctions can be held by private companies as well as public institutions. A public auto auction does not necessarily need to be held in a public place, but it does need to be accessible to the general public. Auctions also can be conducted online at Internet auction sites or through various types of auction software. There are several ways that live and Internet auctions can be conducted.

The premise of a car auction is relatively simple. A vehicle is offered at any starting price, as low as $0 US dollars (USD). People then bid up the price until it does not go any higher, after which the person with the highest bid gets to buy the car at that price. The auction can also have a time limit after which the car is sold to the last person to have bid on it. This can be a very competitive process, whether it is in person or online, but many times people drive off in a car that they got for a very good price, sometimes well below the vehicle’s value.

The most popular public car auctions generally happen online. Internet sites are popular because the buyers can often bid with complete anonymity until the auction is done. The are also popular with people selling cars because they can reach a large number of potential buyers, hopefully driving up the price of the car.

Cars up for sale at a public auto auction can come from several sources. Dealer trade-ins, lease-end vehicles, and end-of-year inventory vehicles are types that may be sold at auctions held by car dealers. Dealers generally can move a good number of cars off their lot in a short amount of time this way, making room for new year models. People who buy from a dealer auction may still have to go through a salesperson before driving off with the car to negotiate additional items such as financing, options and warranties.

Donated cars and confiscated vehicles can be sold through government, police or charity auctions, which will typically offer even lower starting prices for vehicles. There are many online sites that display government public auto auction information for deal-seekers. Repossessed cars are also found at many public auctions, sold by people trying to recoup losses.

People will seek out a public auto auction for several reasons in addition to good deals. One is that they may not have to deal directly with a car salesperson, which is a terrifying prospect for some. Car auctions can also focus specifically on antique cars, custom cars, or other types that are difficult to find elsewhere. Others who attend car auctions are in the business of buying many cars at a time so they can turn around and sell them privately at a profit.


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