Buying your new used car from a car auction can often be a lengthy process that entails a lot of confusion in terminology. For someone who is new to the whole auction scene, knowing and processing these terms as they happen around them is a tough task. The terms in play within an auction relate specifically to the processes of the auction, which is why the lack of knowledge pertaining to these terms can come and haunt you later on if you make a wrong bid or an offer.
Knowing what is at stake, here we make a list of some of the most common terms that are used within a car auction. Study these terms in details and practice them to make sure that the car auction you attend goes the way you want.
Take this crash course of common auction terms and ace the car auction that you’re about to partake in:
The actual auction process begins before the selling stage, in the form of pre-bids. For those who are unaware of it, a pre-bid refers to the bids prospective buyers place on the car before it is auctioned in a live arena.Experts, however, recommend against pre-bidding as it inflates the price of the car. A pre-bid raises the tag on the car before it is auctioned, and eventually raises the final bid as well. A car that starts with a higher bidding value would obviously end up with a higher closing point as well. You don’t want the car’s price to be inflated beyond your purchasing power or limitations.
- Buy Now Prices
Buy Now Prices are usually set by auction houses before the selling process begins. These prices signify the value at which the auction house is willing to sell the car auto vehicle. Buy Now Prices are usually only considered valid until an hour before the actual start of the auction.The price for the Buy Now option is well thought out, and customers often go for it, in a bid to avoid the hassle that is involved in the actual auctioning process. However, going for this option stops you from enjoying the benefits on offer within the real auction.
- Winning Bid
Once the pre-sale process is over, we start with the actual selling process. One of the most common terms used within the actual process for a car auction is ‘winning-bid.’ The winning bid is the price at which a vehicle present within the auction is sold for.For starters, the winning bid is usually where the hammer is banged thrice and at which the bidder takes the car home.
- Documentation Fee
The documentation fee in an auto auction is usually the monetary value given for processing the paperwork on the vehicle. The documentation fee can vary from auction house to auction house, based on the kind of regulations within the state.
- Security Deposit
The security deposit is called as the money that you will have to pay to the auction house for seeing an auction through. The deposit is taken for covering any costs that might occur at the buyer’s default during or after the auction. The security deposit is set at a tenth of your buying amount, and it is refunded by the end of the proceedings if no discrepancies as such have happened.
- Domestic Shipping or Trucking
Once the auction gets over with, the auction house will discuss possible shipping options and routes with you. The option for domestic shipping involves the moving of your vehicle from the car lot where it is right now, to the nearest port for shipping.
- Ocean Shipping
As the name itself is self-explanatory, ocean shipping refers to the transportation of auto vehicles in a ship. The ship takes the car from the port of its current location to the buyer’s home port or the nearest destination.
This term is used to define the process when a car is delivered on to the ship, without the need of a container. This is the most common option for local clearing, and it is often preferred for cars that can move on their own without the risk of any significant damage as such. This option is relatively faster than the option for containerized shipping.