Is It Cheaper To Buy a Car at Auction?

So you're buying a used car. That means either taking a trip to a dealer or buying privately and maybe saving a few dollars in the process.

But there's a third option – buying at auction. This can be the cheapest way to buy a car in Australia, but for many of us the whole process is a bit of a mystery.

If you're wondering whether buying a car at auction might be right for you, here's what you need to know.

The Big Question – Is it Cheaper?

All things considered, you probably will spend less than you would buying the same car from a licenced motor vehicle trader or private seller. And it could be a lot less. Vehicle-auction house, Pickles Auctions, claims the typical savings stands at anywhere from 10 to 30 per cent.

Like many things in life, however, it's not quite that simple. Some legwork is required and there are hidden costs and some big risks if you get it wrong.

What's Involved?

Unfortunately, you can't simply arrive at an auction or click into an online auction and start bidding. First, you need to register, provide certain details and confirm your identity. You might also need to pay a deposit before being allowed to bid.

As for the auction itself, if you're attending in person you'll get a numbered card or paddle to raise when you want to bid. In an online auction, you'll be bidding via an app or website, often with live-streamed visuals and audio.

If you're the winning bidder, you'll need to put a down payment on the car on the day, typically about 10 per cent of the sale price, before finalising payment and pick-up.

The Hidden Costs

Don't get too excited about the final sale price because you will have other costs to cover. First, a buyer's fee, which could either be fixed or a percentage of the sale price. There could be an administration fee and, depending on the arrangement, car storage and/or transportation fees while you organise pick-up.

Depending on the car, it may not have a roadworthy certificate (RWC), or have cosmetic or mechanical issues that need to be addressed. If you purchase it, be aware may need to finance any potential issues.

The Risks

Much like buying privately, buying a car at auction means you're buying it as-is. You'll be forgoing consumer protections such as a statutory warranty or cooling-off period and won't be able to return it if you're not happy.

Even trickier, you won't be able to test-drive potential candidates. Rather, you'll be relying on detailed reports, service records and visual inspections – or, in the online domain, photos – to decide what to bid on.

Car-Auction Tips

So how do you ensure you're not bidding on a lemon? Bidding only on cars with complete service records and an RWC will reduce your chances of woe and eliminate the cost and legwork needed to attain the vital latter credential.

If you're not confident about assessing a car's condition visually, consider having a professional car inspector or mechanic look it over. If you're still worried, many auction houses offer consumer warranties, but – like an inspection – they're not free and will eat into your savings.

Preparing yourself for the excitement and uncertainty of an auction is a good idea. Maybe attend a few auctions to get familiar with the process and research your desired car's value on the private and dealer markets so you know a good price. It'll all give you a better chance of staying calm, sticking to your budget and pinning down the right car.

^Disclaimer

^{Viva Energy Australia Pty Ltd (“Viva Energy”) has compiled the above article for your general information and to use as a general reference. Whilst all reasonable care has been taken by Viva Energy in compiling this article, Viva Energy does not warrant or represent that the information in the article is free from errors or omissions or is suitable for your intended use.}