Why Car Buyers Should Beware of Public Car Auctions

A growing trend I see from consumers calling my radio show is people who are interested in buying their next used car at a public auction. The perception is that you can get yourself a bargain, but that is often not the case. Reality TV shows and televised auctions have glamorized the process of buying cars at an auction. While I am sure there are success stories, my experience is that most people end up getting burned.

Public Car Auctions

There are also individuals and companies that will go to auction for you, and for a fee, will buy a car for you at a dealer-only auction. In my opinion, your �buyer� is likely going to find some kind of car so he or she can get their $500 or so flat fee, without your long-term best interests at heart. I am sure there are some great people who do this, but you just have to assume that priority one is making their fee. That is human nature.

The Inspection Process

While auctions say they inspect cars before they run through the lanes, my experience is that it is very rapidly done, and not very extensive. Usually, they take the word of the seller, which is usually a used car dealer. You better understand too, that auction cars are sold �as is� which means you have absolutely no recourse. If it falls apart on the way home, gather the pieces up, they are yours.

If you decide to go to the auction alone (by now you probably know I don�t recommend this) do your homework in advance. Get a list of vehicles in advance, run history reports on vehicles you might be interested in, and come up with the maximum you are willing to pay-then stick with that price. Auctions count on ego coming into play and count on those people who are determined to be the last person holding their hand up. When I was going to auctions weekly, you learned about �ringers�, people the seller brings to run the bidding higher if they see someone who is very interested in a car.

Savvy Buyers Vs. Amateurs

Remember, too, auctions move quickly, and there is a reason for that. Auctioneers usually start a car very cheap to get the most people raising their hand and to get them caught up in the bidding. You see the savvy buyers walk away quickly when the price is running up rapidly, leaving the amateurs to fight it out and overpay.

The Most Important Question

Perhaps the most important question to keep in the back of your mind is �why is this car here�? New and used car dealers are in the business to make a profit, they have overhead to pay, and most have brick and mortar facilities. The biggest challenge dealers face is getting enough inventory to stock their lots. So why take a car to auction? Simply put, they don�t want to be responsible for selling these cars to the public because it doesn�t meet their standards.

My Dealership Experience

In my days of owning and running new car dealerships, I cannot count the number of times we traded for a car, sent it to the service department to check it out, only to find out it had issues. The first words out of my mouth were �send it to the auction�. So, multiply that by the number of dealers out there and you can see why there are so many bad cars sold at auction.


In closing, auctions serve a purpose, and honestly, auctioneers are generally some of the nicest people you�ll ever meet. Just know the risks if you decide to go to an auction, you might get lucky and get a great car at a great price, but odds are if that were the case, the car would be sitting on a dealer�s lot.