Buying a car at auction

Helpful hints from an auction veteran

David Milloy

For most people, buying a car is a major expense, usually second only to the cost of buying or extending a house. That’s reason enough to take care when buying a car but the sad fact that cars can – and sometimes do – turn into money pits makes it all the more important that you make sure you buy well, particularly if the car you’re buying is pre-owned.

One way in which a car buyer can get more for their money is by buying at auction. But there’s a catch – prices are lower but the risk of buying someone else’s problem is higher. So in this article, David McKee, owner of Ayrshire Vehicle Hire and a man who’s no stranger to buying cars at auction, shares his tips for picking up a good car for less.

What’s the first thing you should do if you’re looking to buy a used car?

“Know what sort of car you need. Think about what you’ll be using the car for. For example, will you mostly be driving it into or around town, or will you be driving long distances in it? Will you be using it to tow something heavy like a caravan or boat? Will you be driving it off-road?

“Running costs, such as fuel consumption, Vehicle Excise Duty, and insurance costs, should also be high on your list of criteria – you can get free, no-obligation insurance quotes online as well as details of Vehicle Excise Duty rates. Also, an increasingly important question that needs to be asked is whether or not a car is ULEZ/LEZ compliant. Low and ultra-low emissions zones are already in operation in parts of the UK and will soon be found in most cities. That’s bad news for your pocket if you either live within one of these zones or need to drive into it and your car doesn’t meet the ULEZ/LEZ criteria.

“It’s easy to check online to see if a particular car is ULEZ/LEZ compliant. Better to spend a few minutes on the web than to find out the hard way!”

Very true. So once you’ve decided what kind of car you need, what should you do?

“Set your budget. Be realistic about what you can afford and what you can get for it (remembering that the purchase price of a car is only part of its cost). I would advise people not to borrow money to buy a car unless they have to. Buying a car with borrowed money means that it’ll cost more, particularly with interest rates being high at the moment, and the borrower will be obliged to keep paying the loan if, for example, the unthinkable should happen and the car suffers a failure that’s too expensive to fix.

“You should also set a budget that covers not only the purchase price of the car but also any additional costs that it would be sensible to anticipate, e.g. the car might need a service, some repair work or new tyres. Don’t be tempted to go over your budget. It’s easy to get carried away in the heat of the moment, particularly at an auction, and regret it later. Remember also that when you’re buying a car at auction, there will be a buyer’s premium on top of the purchase price.”

How does that work?

“The buyer’s premium charged by an auction house is usually calculated as a fixed percentage of the sale price. If, for example, you win an auction to buy a car with a bid of £5,000 and the buyer’s premium is 6%, the total purchase price of the car will be £5,300. You need to bear this in mind when setting your budget. Also bear in mind that buyer’s premiums can vary, so check to see what rate applies to whatever car(s) interest you at an auction.”

Indeed. Any other useful pre-auction advice for buyers?

“Buying a car at auction is a very different experience to buying a car from a private individual or a garage. There will often be a lot of people – motor traders and private individuals – at an auction. It can be a fast-paced and noisy environment, so I’d suggest going to an auction or two purely as an observer before going along to one as a bidder. In Ayrshire, Wilsons hold regular car auctions at their premises just outside Dalry.”

Can you just turn up at an auction or do you have to register first?

“You need to register with the auction company before you can bid on an item. This can be done online and will involve paying a refundable deposit of, say, £250.”

Does a buyer get the opportunity to check over cars before bidding starts on them?

“Yes, to an extent. You won’t get to drive a car that’s being auctioned but there’s usually either a viewing day or perhaps a couple of hours before the auction starts when you can inspect the cars and start them up. If you don’t know much about cars, take someone with you who does. You should also do your own online checks, such as checking a car’s MOT history. Another important thing to look out for is who has placed the car for auction – some cars are surplus stock from dealers, others might be cars from car hire companies, and some will be from private individuals. Look for signs that indicate whether or not a car has led a hard life – if it has then it’s best avoided.”

Do auction houses offer any sort of indication as to the condition of the vehicles up for auction?

“You’ll often find that an auction company will provide a basic report, which can be viewed online, about every car that’s been consigned with them. These reports will give some basic details about the car, such as mileage, what equipment it comes with, and (if applicable) the date on which the MOT expires. There may also be some photographs showing the general condition of the vehicle and any scratches or dents etc. Such reports are, unless otherwise stated, usually provided for information only and are not binding statements about the car’s condition. Cars at auction are invariably sold ‘as seen’ and without a warranty, which means that it’s up to you to check a car over before bidding on it.”

What about the Consumer Rights Act, does it apply to cars bought at auction?

“No, it doesn’t! That’s why it’s important to check out a car and, in so far as you can, its paperwork before bidding on it. A good phrase to remember and live by is “buyer beware”. Another thing to remember is that every auction company has its own terms and conditions, so read them before bidding.”
What should I do after making a successful bid for a car at auction?

“The first thing to do is go to the auction company’s office and pay a deposit on the car. That’ll enable the auction company to sort out your paperwork, which should take perhaps 30 minutes to an hour. While they’re doing that, you should arrange for the car to be insured and taxed before returning to the office to pay the balance of the price, pick up the keys and paperwork and drive off.”

Any last piece of advice you’d like to share?

“If you have any doubts about a car then don’t bid on it; cars at auction are like buses – another one will be along soon. Also, don’t get carried away when bidding. Set a limit on what you’re prepared to bid for a car and stick to it!”