What should I pay for a used car? This is a question that has sparked a debate and confusion, especially for those considering a used-car auction for their next vehicle purchase. Having said that, there are a few rules that you can adhere to in order to land a good car deal. Some of these factors are discussed below:
Factors that Determine the Price of a Car at an Auction
The season plays a key role in determining the market for certain vehicles. For instance, during snowy seasons, the value for those brawny 4x4s is bound to go up, while the shining spring sun will have convertible car enthusiasts flocking to vehicle auctions. So, if you decide to buy a car during its off-season (a 4×4 during summer, for instance), you might be able to get a good price.
Often, city cars lose a lot less value with time, compared to exclusive sports vehicles or sedans. The main reason behind this difference is the former’s lower prices and mileage. In addition, the abundant supply of city cars makes them a comparatively more secure investment.
Regardless of condition or quality, the vehicle’s brand can play a key role in its auction price. When it comes to mass-market brands, Toyota, Hyundai, Subaru, and Honda are known to have the highest re-sale values, while Audi, Mercedes, Infiniti, Acura, and Lexus fare best in the luxury-car department. Usually, these cars can retain around 50% of their initial value over a three-year period, compared to around 40% for other car brands within the same timeframe.
Condition of the exterior
Naturally, if the exterior of a vehicle is damaged, no matter how minutely, it will lead to a price reduction. If you are considering purchasing a used car at an auction, you should compare the price benefit against the additional costs that you will have to endure to repair the damage.
Condition of the interior
Even more naturally, cars with well-maintained and clean interiors are likely to fetch more buyers and higher prices. On the other hand, untidy vehicles having unpleasant odors will have significantly lower values.
While every color is beautiful in its own way, some colors are certainly better than others when it comes to vehicles. Buyers want to go with vehicles that have ‘safe’ colors, such as neutral or dark. In comparison, brightly colored cars are still not as popular as the classic black, silver, or white.
We previously mentioned how mileage can impact the value of a used vehicle. Often, impeccably-maintained vehicles do not fetch very high prices simply because they have mileages exceeding 200,000.
Availability of parts and accessories
You might expect cars with the most sophisticated equipment – such as high-end stereos, supercharger kits, or custom rims – to go for higher prices. However, this is often untrue because prospective buyers express concern about the high upkeep expenses.
Cars that have been regularly serviced and are in excellent running shape will certainly attract better prices. Therefore, if you are considering putting your car up for auction, you are likely to get a good price if you have a record of consistent repairs and maintenance.
Tips for Purchasing a Vehicle at an Auction
Now that we have determined what goes into determining the value of a vehicle at an auction, you should have a decent idea of how to get a good vehicle deal. However, we will now further improve your auction-winning chances by discussing a few essential tips that you should implement if you plan to purchase your next car through an auction.
1Observe before playing
Before you place a bid, you should visit the auction multiple times just to see how the action unfolds. Familiarize yourself with the speed at which they go across the blocks. Often, larger auctions have multiple vehicle lanes that move simultaneously. In addition, notice the auctioneer’s style of delivery and how the buyers listen and respond.
2Analyze the risk
If your chosen auction has a website, make sure to visit that and check for any guarantees included with the vehicle that you plan to purchase. A lot of auctions divide their vehicles into three categories:
Category 1: This category contains cars that do not have any known defects. In addition, vehicles in this category often offer arbitration in case of any undiscovered mechanical problems.
Category 2: This category contains cars that have known issues, without any arbitration.
Category 3: The last category normally contains cars that are to be sold ‘as is’. In other words, if anything goes wrong with the vehicle, you can only blame your bad luck.
3 Assess and verify
It is possible to inspect the vehicles prior to placing a bid, but test drives are usually not allowed at auctions; at best, you will be allowed to enter the car, switch it on, and maybe use the gear. With online auctions, you usually get a ‘condition scale’ where ‘5’ represents a brand new car, and ‘3’ means regular wear-and-tear. In addition, you might also have access to a comprehensive list of any mechanical malfunctions or other problems. Regardless, you should always request an inspection report before making a bid for any vehicle.
4Bring someone with you
Ideally, you should be accompanied by a mechanic or someone else who is vehicle-savvy. But, even if your wingman does not know much about cars, they can always help you prevent your emotions from going overboard during the auction process. This is why they need to be aware of your budget and bidding range.
Speaking of keeping emotions in check, it is a lot easier if you have not completely lost your heart over a single car. In other words, you need to remain open-minded and make sure that you pick multiple cars that you can go for.
6Establish a range
After making a short list of your choices, do explore the trade-in values for each of those cars. Make sure to hammer this number in your brain, and in no circumstances, go above and beyond.
To sum up, there’s a wide range of factors that determine the price of a car at an auction. Being aware of those factors, as well as the vehicle auction tips that we have discussed, will significantly improve your chances of walking away with a bargain deal.