With all the used cars and pre-owned cars dealerships around us, one would have thought that car auctions would fall out of favor with the public. But, this has not happened. Car auctions have only become trendier and popular, and are in great demand within the general public.
Not only do car enthusiasts throng car auctions to get good deals on their dream cars, but these auctions have become a good bet for dealerships, auction houses, and insurance companies to get the best out of their cars.
Before we delve deeper into some of the car auctions risks, lets first look into why are cars auctioned:
Why Are Cars Auctioned?
There are numerous reasons why a car can end up in a car auction. Cars can end up in auction houses for a variety of reasons, some of which are:
- Many cars have remained unsold for a tad bit too long at a dealer’s car lot. Car dealerships usually don’t have space and the time to accommodate a car for too long, which is why they seek the most plausible option in car auctions to sell off the vehicle to an eager buyer. Car auctions are frequented by a lot of different buyers, which is why there is great scope for dealerships to get the most out of the process.
- Cars that have suffered minor or major damages because of accidents or weather conditions are sold off at auctions. As insurance companies have already made payments to the clients for the damages, they look at these auctions as a way to recoup those payments and make adjustments in their accounts. The damages delivered to the cars could be in the form of minor dents, scratches or thickened fluids.
- Many private owners trade their old cars in a car auction to get a new one. In this case, most car owners exchange the old cars with them for a new car that they get from the auction itself.
- Cars brought through financial assistance, where the car owner isn’t able to make the due payments, are repossessed and auctioned off at car auctions from financial institutions wanting to get the payback on their investment.
Types of Auctions
Before we discuss the risks of car auctions in detail, let’s shed some light on the different type of car auctions in the market. These types include:
Pros and Cons of Auto Auctions
Obviously, you would want to partake in an auction only after you know the pros and cons of what you are stepping into. Some of the pros and cons here include: