An Auctioneer Tells You What’s What

Auction Car Image
Auction Car Image

“Wholesale heaven” is when automobiles end up at auctions. No dealer would buy them for the price the seller seeks at a dealer auction. People buy cars with their eyes. If you’re not mechanically savvy and have a keen eye, avoid public auctions. Before attending an auction, call its corporate office to find out who consigned the cars. Most auto auctions have three sellers. The first two help purchasers. Avoid the third.


Banks and financial institutions: They don’t sell cars. They lend. Finance businesses only want to sell their cars at a fair price. Most auctions list these sellers first since they have the best inventory and most reasonable prices. Public auto auctions with many sellers are worth visiting.

New-car dealerships: Dealers preserve most trade-ins, but not all. It takes time and money to diagnose and repair unfamiliar makes. A well-maintained Camry is easy to sell. Minor troubles with a Land Rover or Saab aren’t worth the effort. If you handle your maintenance and can spend time in enthusiast forums, new-car dealers are a good source of affordable cars.

Independent auto dealers: Used-car vendors. If they can’t sell a car to a retail client, they’ll bring it to a dealer auction, public auction, or another dealer. The dealer will try the third if the first two fail. So, the dealer can sell to a novice.


AutoCheck or Carfax can tell you a lot about a car’s past. Many public auto auctions display their inventory online with VINs so you can decide which cars to buy. Use a vehicle-history report provider to vet autos you’re interested in. Has the car been sold multiple times? If so, the car may have mechanical problems. Dealer-maintained? Was it from the Rust Belt or a hurricane- or flood-affected area? Current emissions certificate? Before the auction, you can learn about these potential problems.


Register at the auction’s front desk when you arrive. The auctioneer will ask for your license and a deposit. Ask about auction buyer’s costs now. Auctions have significant fees that aren’t disclosed until the conclusion. Beware of hidden fees.

If possible, drive the cars around. If you arrive early, certain auctions allow this. If the car won’t start, call auction workers to provide a battery box. Bid on a car after test-driving it. Don’t consider more than five cars. Check tires, fluids, and interiors. I check radio stations and gloveboxes. You want to inspect the car and learn about its previous owner. Even the nicest cars can be ruined by a lousy owner. A radio programmed to news and easy listening tells me something about the owner. All Goth metal and anarchist presets say something.

Watch the auction lights: Red, yellow, green, and blue.


Red Light: “As Is” If it’s on and you’re the high bidder, the vehicle and anything that fell off are yours.

Even under “as is” standards, you can contest frame damage, flood damage, or title concerns. Some auctions say you have no recourse if the odometer was rolled back. Under the Uniform Commercial Code, sales legislation in most states, you have remedies. If the transmission or engine breaks, you’re responsible.

Yellow Light: Auctioneer will make a car-related announcement. It can be frame damage, salvage history, a broken or rolled back odometer, a title issue, or other issues. Ask the auctioneer about a yellow light if you didn’t hear the announcement. Once you know them, you can bid. Depending on the auction’s rules, the winning bidder can view and drive the vehicle for one to three hours after the sale. Before leaving, you must pay for the car.


If the AC is broken, you’re stuck. Need new suspension parts? Brakes, oil, and coolant leaks are additional issues. Engine, transmission, major electrical, title, and emissions-system concerns can be arbitrated.

If the engine is blown or the transmission shifts poorly, you may be allowed to cancel the transaction if the auction verifies the defect. This is why you should never pay with cash at an auction.

Blue Light: This signifies the title hasn’t arrived at the auction. Your check won’t be processed until the title arrives. You can’t register the car until the auction has the title. You can return the car and receive your money back if you don’t get the title within 30 days. None.

I often urge people to write down their price limit for a vehicle. When you do that and look at it when bidding, the auctioneer has a harder time swaying you financially. Auctioneers are paid to sell for the sellers. They create tension. When you reach the auction block, you’ll see a crowd watching the auctioneer and employees. Most purchasers follow the crowd and believe the auction block hype.

Don’t Trust Auto Auctioneers: As an auctioneer, they set the car’s “sellable range.” Bidding usually starts at $1,000-$2,000 over the seller’s reserve price. The auctioneer then drops $1,000, then $1,000 more. Then he’ll “push the bid” up to the seller’s price. Most sales have fewer than 10 bids.

So, when they boost bidding as an auctioneer, are they ripping you off? No. If the auctioneer waits for experienced buyers to bid, they will collude and not bid. Legally, it’s collusion. Auctioneers term them “cousins and brothers-in-law.”

If dealers can reduce vehicle prices by not bidding up, they will. The dealers are pros who know how to win. As an auctioneer, they shield the seller from “the family” of experienced purchasers and sell the car. The auctioneer is not a judge, even if he has a gavel. His clients are successful. Their auctions should go smoothly and without complaints. Misrepresented vehicles can’t be sold at auction. Over 98% of auctions operate smoothly. If you buy a misrepresented automobile at auction, you can cancel your check and fax a follow-up note the next day. Bad publicity is like an unpleasant judge with a gavel to auctions.

We all fear getting screwed at auctions. When a member of the public bids, most auctioneers slow down. They can’t make merchants saints or purchasers X-ray experts. They can be a fair broker and help those who want it.