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What are Car Auctions?

Mary McMahon
Updated May 17, 2024
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Car auctions are events at which cars are sold using the auction method, with buyers offering bids and cars being sold to the highest bidder. Some auctions are open to the public, allowing anyone to attend, while others may be closed. Car auctions can be a great way to acquire a car at low cost, for people who are familiar with cars and know what they are doing. People who lack experience may find themselves making an unwise purchase at an auction.

Stock at a car auction can come from several sources. Government auctions include surplus government vehicles being sold off, along with cars which have been seized by the government and law enforcement. Car auctions can also include vehicles which have been seized by repossession companies, cars donated for charitable causes, surplus cars from dealers, or cars from private sellers who have decided to sell their cars at auction.

Typically, attendees of a car option have an opportunity to examine cars offered for sale, but they may not be allowed to drive them. The visual inspection gives buyers a chance to determine if the cars have any major problems, and sometimes information about the car is available. This information can include service records or an evaluation from a mechanic, depending on the type of auction. In other cases, inspection may not be permitted, with buyers bidding blind on cars in the auction.

Buyers may be required to put down a deposit to bid in the auction, ensuring that they have the funds to back their bidding. In all cases, once a bid is accepted, the buyer will need to present the money immediately to claim the car. Some auctions arrange for transport and shipping by request, usually for a fee, while others expect buyers to drive the cars off the lot. The cars are also provided without warranties or guarantees, which means that if problems develop with the car, the buyer cannot complain to the company which held the auction. Titles may still have liens on them, and cars may not necessarily pass smog tests.

The offerings at a car auction vary widely. Specialty auctions such as auctions of classic cars, luxury cars, or cars donated for charity may include very high quality vehicles, along with an opportunity for people to inspect the vehicles and receive complete information about their service records. Government car auctions can include a range of vehicles from unreliable government vehicles being retired after a term of service to brand new top of the line cars seized from drug dealers. If at all possible, buyers should examine the cars before purchase, preferably with the assistance of a mechanic.

Auction formats also vary. Some car auctions are held online, allowing people to bid from anywhere. Others require bidders to be present in person, and some auctions provide a mix of bidding options, such as phone bidding.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a WiseGeek researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

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