6 things you need to know when financing a car from an auction

Posted on Tuesday, May 15, 2018 - 11:57

Auctions might be far from the high paced drama that people have in mind, but it can be a place where you can drive off with a bargain on a used car. However, if you are not aware of the process of buying a car at an auction you could end up paying more than you intended to. Before you go hunting for a great deal on a car at an auction here are the six things that you need to know.

1. Put in Research

Before you go to an auction you need to put in the work by researching the car model that you wish to buy. This means comparing a variety of used car quotes for the model you are interested in to know the price range that you are working with. This will ensure that you don’t buy more car than it is worth and that you don’t under finance your car loan when the perfect deal is waiting for you. Depending on an Auction company, a list of cars that are up for auction is usually put up, so you can know the price range in advance.

2. Have a set budget

Auctions are exciting and challenging at the same time. You might have heard countless of stories where someone winds up paying twice the value of the car. Going to an auction with no set budget is setting yourself up for disaster. Although the environment might not have the fast-paced pressure that is depicted in movies you could end up agreeing to more than you intended to. You can get a car loan for the price range that you have set to finance your used vehicle. It is important that you check its interest rate and its features to know if it is suitable for you. You will have to factor in additional costs such as a down payment of 10% or $500 if your bidding is successful.

3. Get experience

Go to a few car auctions in order to not be overwhelmed. This will help you get the general feel of how things are done and what to expect. It can also buy you the time to build your own confidence if you are crowd shy. Observing how things are carried out can help you be better prepaid for when you are ready.

4. Check the car history

If you are able to view which cars will be on auction before the auction day it can give you the advantage of being able to check its VIN number. CarHistory found that 27.2% of used cars that were purchased where the history wasn’t checked had a negative report in the form of encumbrance or money that is owed on the car. Websites like CarHistory report can give you an insight into the cars history, on the distance a vehicle has travelled, if the car is registered, if there is still money owed on it, or whether it has warranties. These factors can either increase or decrease the value of the car which will help you know if the auctioneers are selling the car at its true value.

5. Avoid making an impulse buy

Buying a car is a huge step. Making an impulse purchase without doing your homework can result in you inheriting a car that comes with a various amount of problems can be financially draining. You might have done your homework only to find that the model in which you were interested is not on offer, rather there is another model with similar features. In such cases it is best to avoid making an impulse purchase. Take your time and go to the drawing board. This will help you avoid a costly mistake.

6. Check its safety rating

Just because it is a used car it does not mean you have to pass on its safety rating. Relying on the auctioneer or owners word that it is a safe car will not keep you safe. The Australian New Car Assessment Program has made it easier for you to find out the level of safety your car has, even if it is a used vehicle. You can find out its rating according to how many stars it has. The more stars the car has the higher it rates in terms of safety levels.

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