Guide to Buying a Car at Auction

Guide to Buying a Car at Auction

Buying a car at auction is a much feared but essential man skill, like reversing a trailer or owning a chainsaw. All have the potential to go horribly wrong but all will make you look effortlessly cool – if you do them right.

We’ve bought a couple of dozen cars at auction and have never (fingers crossed) had it go wrong. There are pitfalls, of course, but they are fewer than you might imagine. (We also own a chainsaw, a proper fire-breathing petrol jobbie, but reversing a trailer is a skill that still escapes us…)

Here is the BreakdownCover.org guide to buying a car at auction without making a fool of yourself.

What Are the Advantages of Buying a Car at Auction?

Price, primarily. You should pay less at auction than you would at a dealer.

But, you might pay more than you would privately. Why? Convenience mainly. If you are looking for a mainstream car then you will have the option of a dozen or more to choose from, all in one place and on one day.

Because car dealers measure their time in terms of money lost they will sometimes pay a little bit more for a car because they are already there; if they don’t buy then that will be a day wasted, time that they will have to expend again when they go and look at other cars. This is why you might pay more for a car at auction than you would privately.

What Are the Disadvantages?

It’s a risky business. Car dealers will offload their rubbish at auction. If a car is found to be in a worst state than they first thought, or if it just isn’t selling, then they’ll run it through the ring to get rid of it anonymously.

You won’t get a warranty either, so your car checks have to be spot-on.

So, it’s not worth doing then?

Steady on there, cowboy. Of course it’s worth doing – you just need to know what the risks are so that you can make an informed decision.

Budget

You’ll have a budget in mind. Stick to it.

To work out how much you can spend on a car you need to work out how much you can spend. Then deduct 10 per cent so that you can buy a used car warranty. You’ll probably have to tax it too, and insure it. Take these figures off your budget and that’s what you can spend on a car. Except that it isn’t.

You need to add the ‘buyer’s premium’ to the ‘hammer price’. The hammer price is the price that you bid up to and the buyer’s premium is a percentage that is added on top of that, which is the auction house’s profit. It’s generally about 10 per cent but it can vary, and you’ll also need to add VAT too.

As an example. If the hammer price on a car is £10,000 then you’ll pay £1,000 as the buyer’s premium plus VAT of £200 on the premium. The total that you’ll pay is £11,200.

The Catalogue

Some catalogues are online, so that you can look at the cars that you’re interested in before the day. Other auction houses, such as British Car Auctions, allow you to register online and search for a specific car.

Most will charge for a catalogue on the day, which you’ll need to do and factor into your budget.

On The Day

Get there nice and early. This lets you do two things: look at the cars at a steady pace and get a fried breakfast.

You might need to register as a bidder first, so bring some identification with you (a driving licence is OK for most, but check their website for full details). You’ll need to fill in a form and some will run your debit card through the machine to check that it’s OK.

You’ll be given a ‘bidding paddle’ in most cases, which is normally a piece of card with a number on it. Once you’ve done this sit down with a cup of tea and the catalogue and circle the cars that you’re interested in.

Car Inspection

Inspecting cars is easy – if you have a system. I’ll show you mine but yours will vary once you get the hang of it. Whatever way you do it you need to carry it out on every single car that you are interested in.

  1. First I look at the outside of the car. Is it straight? Are all of the panels the same colour? Do the panels ‘ripple’ and look wavy? Are there any even lumps that could be bodyfiller? Is it peppered with stone chips? Are the mirrors cracked and scuffed? Does it look ‘right’?
  2. I then look at the interior. The car should be unlocked, but if it isn’t then ask for the keys. Is the driver’s seat torn and sagging? Are there any cigarette burns? Is the spare wheel there? The service book might be in the glove box, so read that too. Ignore grubby seats and concentrate on anything that will cost serious money to repair.
  3. Have a look at the windscreen sticker. The best cars come direct from company fleets, and to begin with I’d advise that you only buy these. They’ll have a full service history and generally only one driver from new.

At this point you’ll have a rough idea of whether the car is worth looking at more closely. If you visit three or four auctions and go through the motions – without bidding – you’ll get a feel for the cars very quickly, especially if you are only interested in one specific model.

If it looks OK so far then you need to dig a bit more.

  1. Check the oil level under the bonnet, as well as the water. Are they clean and up to the ‘full’ mark? Are there signs of mayonnaise on the dipstick and inside the oil filler cap? If so then the head gasket might have gone.
  2. Look inside the bonnet and the boot. Do the panels look the same age as the rest of the car? If they look newer then they might have been replaced in a bump.
  3. Check the tyres. You want plenty of tread and even wear across the full width.
  4. Get on your knees and look underneath. Rust isn’t an issue these days on cars that are up to seven or eight years old but it is worth double-checking. Has the car been scraped underneath, indicating a careless owner?
  5. Sometimes you’ll be able to start the car. If you can then turn on the ignition and check that all of the dashboard warning lights come on. Now start the engine and look for smoke, unusual noises and oil leaks. Check that all of the warning lights go out. (If not then you’ll have to wait and watch it being driven through the ring.)
  6. Take the radiator cap off when the car is cold and with the engine running if you can. Check that there are no bubbles rising through the coolant. If there are then this is another sign that the head gasket might have gone.

If everything still looks good then go into the office and ask to see the paperwork. Is it MOT’d? If so, how long? Were there any advisories? If there were, is the sheet attached showing what they are? This is a great way of telling you what’ll need doing next time. You’ll need to know when the cambelt has to be changed on ‘your’ car; check that it has been done at the right time or mileage.

Check that it has a full service history from a main dealer. Anything up to three years old must have to buy it and up to ten years old you’ll settle for a service history from anyone. If it’s older than that then you just want the best history possible, but we’ll cover classic cars at a later date.

You’ll have a shortlist now of three or four cars now, so go and get a fry-up and get your Smartphone out. Most auction houses will carry out their own HPI check (to see if it has been stolen, has finance outstanding, or been in an accident) but if they don’t then you’ll need to do so. You also need to double check what the car is worth on a site like Parkers, PriceAnyCar, or Autotrader.

Now you’re ready, big boy.

Bidding

Bidding is straightforward and nothing to be scared of. The auctioneer will introduce the car and tell you the salient points. Listen carefully because it isn’t unusual to find that the catalogue details have changed slightly, with an unexpected problem or change to the description. He might also tell you that the car is sold with ‘no major mechanical faults’, ‘specified faults’, ‘sold as seen’, or with an ‘engineer’s report’.

He will then start the bidding with an optimistic price. Sit quietly and don’t start yet. If no one bids he’ll drop the price and someone will make the first bid. If no one starts bidding then the car may well be known to the dealers there (a car can sometimes be offered for sale a few times before an unsuspecting punter buys it). Once the bidding has started you’ll need to concentrate.

There is no point in joining the bidding early. Wait until the bidding has stopped and the auctioneer says something like ‘selling once’ or ‘selling for the first time’ and then raise your catalogue or paddle in a confident manner. This’ll catch the auctioneer’s eye. You might get lucky and win with this bid but if not then just make further bids by nodding. If the money gets too high for you then shake your head to let him know that you won’t be bidding again.

Don’t get caught up in ‘bidding fever’. Decide a price and stick to it; just because someone else is daft enough to pay over the odds doesn’t mean that you should. I’ve lost a few cars over the years because they sold for more than they were worth to me.

If you win then he’ll ask for your number. Just hold up your paddle and show him the number. Sometimes you’ll need to go to the rostrum and pay a £500 deposit; at others you’ll just go to the cash office and pay for the whole amount. You’ll find out which one applies at your auction house by looking at their website.

Incidentally, most auctions allow you to leave your best bid in advance of the sale and they’ll bid on your behalf. Others allow you to bid on the telephone or online. These are very useful resources but are only for the experienced, so leave them for now and bid in person.

Paying for the Car

You’ll need to go to the cash office and pay for the car. Show then your paddle and they’ll print off an invoice showing the full amount (hammer price plus premium plus VAT). You can pay cash up to about £10,000 but the easiest is by debit card. Most will accept a credit card too but you’ll pay about 3 per cent for the privilege.

They’ll give you a receipt and, in most cases, a collection note. Hand this to a porter and you’ll be given the keys and the paperwork. Providing you’ve got car insurance and road tax arranged you can now drive your new pride and joy home.

If you leave your car at the auction house – and most will allow you to do so – you’ll be charged a storage fee of around £10-20 plus VAT per day.

The Golden Hour

Some auctions now give you one hour to test the car and make sure that it is ‘as described’. The catalogue or windscreen sticker will tell you if this is the case.

If it is then get in the car and test it. Drive it around and check that the clutch and gearbox are OK. Check the steering. Check the engine for strange noises and smells when it gets hot. In short, drive the bollocks off it to see if anything breaks or falls off. If it does then take it back and talk to them. You might be able to reject the car or they might offer to knock a few pounds off.

Used-Car Warranties

Your auction car won’t have a warranty. This is another drawback of buying at auction according to the pub bores. Except that it isn’t.

If you buy privately you won’t have a warranty. Most used car dealers’ warranties are pretty much worthless too. Buying at auction just means that you are on a par with every other way to buy a used car.

We’ll look at buying a used car warranty in a later article but, in general, they’re a good thing.

Why not write in and tell us how you get on buying a car at auction? We’d love to hear from you!

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