Auctions can provide an opportunity to find the perfect car – but there are terms and conditions that interested consumers must be aware of.
This is according to Park Village Auctions director Clive Lazarus, who provided a breakdown of what bidders need to know before buying a vehicle at auction.
Auctions are usually cheaper
According to Lazarus, vehicles bought at auction are usually cheaper than when buying second-hand or new.
“There are a few rare exceptions, but you’ll generally find savings of 20% compared to dealers,” said Lazarus.
However, he said this comes down to “where costs fall” – as auction vehicles are sold as-is. This means any repairs or maintenance of the vehicle falls on the purchaser.
If you do find a vehicle you are interested in, Lazarus said it is therefore imperative to first do your due diligence.
“Visually inspect the car, looking for signs of previous damage from a collision or trouble with the paintwork,” he said.
“Ask the right questions, like does it have a verified full-service history? Is there a warranty or service plan still intact?”
Thereafter, it is recommended to find the fair market value of a similar vehicle and then to set your budget accordingly.
Buying a car
If you find a vehicle that meets your criteria, Lazarus said it is important to read the auctioneer’s terms and conditions – and to make sure you fully understand them.
If you are confident that you do, the next step is registering for the auction, paying a refundable deposit that allows you to participate in the bidding, and securing the needed finances.
He stated that buyers are obligated to settle their purchase in full if they win a bid.
At the auction house, Lazarus said you should also inspect the vehicle before placing a bid, as there are no test drives.
“Auction houses must disclose if the car is a ‘runner’ or not,” he said.
For buyers looking for bank-repossessed cars, they will need to locate the applicable institution’s upcoming auction list.
“These lists will often link directly to the auction house selling the cars on their behalf,” said Lazarus.
Types of online auctions
Along with in-person auctions, Lazarus said there are three main types of online auctions: timed auctions, simulcast/webcast auctions, and hybrid auctions.
Timed online auctions allow bidders to place a bid at any moment during the predetermined length that the auction will run.
“Bids are not contested in real-time. Instead, the auction ends at a predetermined time, after which the highest bid on each item wins,” said Lazarus.
Simulcast/webcast auctions then allow you to bid in real-time, while hybrid auctions are a mix of the above-mentioned types.
“They start as timed auctions and conclude as a live webcast where you contend in real-time,” he said.
It’s not all smooth sailing, however, and Lazarus warned consumers to look out for fraudulent auctions.
First, check if the company hosting the auction is a registered South African Institute of Auctioneers (SAIA) member, he said.
“Scrutinise the logo and business details, as scammers create very close replicas.”
It is also recommended to verify the business and their banking details, and to confirm the asset’s location.
“If you’re unable to view the asset yourself, send someone on your behalf to confirm its existence. It’s always wise to view the asset’s condition before bidding.”
Calling the auction house helps, too, as legitimate auctioneers will be reachable and more willing to help than a scammer.