Tips For Buying Stock At Physical Car Auctions

Pre-Auction

Do Your Research Before Attending A Car Auction

Learn About Best-selling Vehicles & Their Features Online

Before attending an in-person car auction, it’s worth researching which used vehicles are currently selling well and the features buyers are actively looking for.

A good practice is to check with The Society of Motor Manufacturers and Traders (SMMT), who publish regular used car data. This will give you a good idea of which makes, models and colours are selling well, and in what geographical region these particular vehicles are being bought.

Second-hand car dealers can also evaluate the SMMT data to find out what models are starting to decline in popularity overall. This can offer insight into which cars will be showing up at vehicle auctions in the coming months.

Visit Auction Houses Before Bidding

For new second-hand car dealers, visits to vehicle auctions prior to making any purchases is a must. You can get a sense of how that particular auction house runs things, how popular the location is and how competitive the bidding gets.

The same is true for established second-hand dealers with new auction houses or sites in new regions. Visiting a site in person will give you useful insights such as how the car auctions are run, how detailed the vehicle specifications are and what the bidding is like. Additionally, some physical car auctions are more comprehensive than others in terms of scrutinising the condition of the vehicles up for sale and identifying existing issues.

Create A Short List Of Vehicles You Are Interested In

Once you have an idea of what the market is like and how the auction houses you plan to visit operate, create a short list of vehicles you will be seeking at auction. Having a clear defined list will keep your bidding focused. Include any factors that will impact your bidding, such as market sale values and known issues with makes/models.

Before Specific Auctions, Note Cars & Lot Numbers

Typically, auction houses create listings of cars available ahead of time, allowing you to note lot numbers for particular vehicles of interest. Not all auction sites do this and it can differ depending on whether the vehicle auction is in-person, online or both.

Where lot numbers and detailed listings are provided, take time to check through them in advance to make sure you know what cars you are interested in and to plan your bidding. Run a vehicle history check, use registration plates to search online and ensure there are no unlisted issues, such as outstanding finance or mileage anomalies.

If your budget is limited, it’s important to know how many suitable vehicles will be available at the auction you plan to attend. If you want to give yourself more purchasing power, consider arranging vehicle stock finance in advance.

At The Car Auction Site

Arrive Early To Physically Assess The Cars

Getting to the physical vehicle auction early will give you enough time to properly evaluate the cars up for auction before you start bidding for the day. This enables you to identify any issues that may not be reflected in the vehicle listing. It also provides an opportunity to inspect the vehicle first-hand and assess any known faults before bidding.

When evaluating a car at an in-person vehicle auction, consider the following:

• Check the car’s bodywork for obvious signs of damage (dents or scratches), lacquer peel and corrosion.
• Ask for a copy of the scrutiny report or download it before attending the auction.
• Check under the bonnet for fuel, water or oil leaks. Remove the oil filler cap and check for discoloration from oil stains. Keep an eye out for gunged up areas which could indicate issues with the engine.
• You won’t be able to test drive a car but most auction sites will let you turn on the engine. Always carry a long-handled screwdriver or stethoscope with you and listen around a running engine for knocking or unusual sounds like a misfire.
  • If you are able to start the vehicle, verify there are no warning lights on the dashboard, and check for any strange odors, like cigarette smoke.
• Check the exhaust output for excess smoke and the colour. Too black and the engine may have an over-fueling issue. Too white and the engine may be running too lean, which would indicate an emissions problem.

Network With Other Buyers For Information Sharing

Networking at car auctions can be a useful way to learn more about the market and what bids might get competitive. Do share any vehicle faults you have found with others in the crowd ahead of bidding, so the message gets around. This can help prevent overbidding.

Be aware that when other dealers seem keen to network, they may have ulterior motives. Always ask more questions than you would answer and listen to the things that are not being mentioned. Sharing information can be beneficial but you may also want to keep the best deals for yourself.

Preparing For Bidding At Car Auctions

Decide On Your Fair Max Bid

Ahead of your lots, consider what your max bid will be for each vehicle in order to achieve a healthy profit margin. Bear in mind any potential repair or cleaning costs, both in terms of what is known and what is unknown, even if you just include a small buffer. Bidding can be fast and competitive and you don’t want to overpay in the heat of the moment.

Use online advertisers, like Auto Trader, and media companies, like Kelly Blue Book, to find out the current market value of the cars you are considering bidding for. Evaluate potential profit margins based on the market. This will help you create a sensible cap on your bids. Don’t be tempted to pay more than your max bid or you might risk your profit margin.

Consider The Seller & Their Reasons For Selling

There can be any number of reasons why a vehicle is being sold. For example: A private owner may be upgrading their car to a newer model OR they might be getting rid of a vehicle near the end of its life and hoping to make back some money. Another car dealership might not have demand in their region for a particular vehicle but that doesn’t mean it won’t be right for yours.

Look out for large numbers of similar or the same makes and models; these vehicles may be ex-fleet vehicles. Try to discover what type of fleet user owns the vehicles because some fleet owners will care for their fleets better than others and some industries have a reputation for poor driving habits. For example, there are differences between mobility, taxi and courier vehicle drivers.

During Bidding At Car Auctions

Listen Attentively To The Auctioneer During Bidding

It’s important to listen carefully during a car auction, not only so you can hear your preferred lot numbers being called, but also because the auctioneer may provide additional information about the vehicles as they come up for bidding.

Key details that might be mentioned at this point in the car auction include: number of owners, service history, MOT test history, number of keys and exact mileage.

Be Clear When Bidding & Avoid Bidding Wars

Ignore the movies and subtle nods, be clear in your bidding so the auctioneer knows when you are bidding on a vehicle.

Don’t be afraid to lose out on a vehicle that has gone beyond its value during bidding. Consider the competition in the room and try to keep an eye on anyone bidding on similar lots to you to avoid bidding wars.

After Bidding/Setting Up Payment

Once bidding has completed, you will need to arrange payment for the cars you’ve purchased. If you are set up for stock funding with LE Capital, you can make your purchase request at the end of bidding. Typically, we will arrange a same-day payment, direct to the auction house. Alternatively, you can use your personal funding and settle with the auction house directly.

Physical Car Auction FAQs

When Will You Get Your Vehicles After An Auction?

This will depend on the relevant auction house’s policies and also the dealer’s specific circumstances. Typically, you can expect to receive your vehicles within 1–3 days of the auction ending. The exact timeframe will depend on three key steps: payment processing, completion of the necessary paperwork and arranging collection or delivery.

The payment process can vary, but it often involves settling the winning bid amount, auction fees and any other applicable taxes or fees. Some auction sites might allow for immediate pickup, while others may have scheduled pickup times or days. Remember, with LE Capital, 100% of invoices are financed, with all fees, delivery charges and vehicle costs included.

Will Your Vehicles Get Delivered To You Or Will You Need To Arrange Transport?

In most cases, you will need to arrange for the transportation of your vehicles. Some auctions provide on-site pickup options, while others may require you to arrange for your own transportation. How the vehicle is transported from the auction house is up to the purchaser; whether through a tow truck, trailer or, if the vehicle is in working condition, driving the vehicle away.

What Type Of Vehicles Are Sold At Physical Auctions? Do They Have Mixed Vehicles?

The majority of physical vehicle auctions offer a mix of vehicles from various categories to attract a broader range of buyers. However, certain auctions will tend to specialise in particular categories of vehicles, such as:

• Government Auctions
• Police and Impound Auctions
• Classic and Collector Car Auctions
• Luxury and Exotic Car Auctions
• Salvage Auctions
• Commercial and Industrial Equipment Auctions

If you are looking for particular vehicle types, auctions have been known to host special events or themed auctions that feature specific types of vehicles or special promotions.

What Are Reserve Prices?

Reserves are minimum prices for vehicle sale. Sellers set the minimum price they want to meet before allowing a sale. This is not typically disclosed before or during bidding.

If the vehicle has a minimum/reserve price, the auctioneer will often declare something like “the reserve is not met” or “this vehicle is not sold” if the final bid does not meet the reserve price. At this point, the seller will decide whether to accept the highest bid below the reserve, or they can decline the highest bid and take the vehicle off the market. The seller and highest bidder may decide to negotiate a price from this in order to reach a deal.

Will The Auctioneer Start The Bidding At The Minimum?

Not necessarily. The auctioneer will either start the bidding with an opening bid he feels is suitable or ask for an opening offer from the audience.

Is There A Best Time Of Year To Buy Stock At Auctions?

Not necessarily. Factors such as market conditions, seasonal preferences and economic trends can all impact the availability and pricing of vehicles.

Economic conditions have a huge impact on the prices of vehicles at auctions. It is best practice to continually monitor the overall market in order to identify favourable buying opportunities.

There are some seasonality factors you can consider:

• Sports cars might be in higher demand in spring and summer, while four-wheel-drive vehicles may be more desirable approaching and during the winter months.
• Manufacturers tend to release new models in the late summer or early autumn. You may therefore find good deals on previous-year models at these times.