Tips For Buying Repossessed Cars at Auction

For many South Africans, owning a car is often seen as a necessity rather than a luxury. However, with an increase in the cost of living, not everyone can afford to buy a car, especially a new one.

Buying cars at auction has become increasingly popular, thanks to the potential for significant savings compared to traditional dealerships.

Among the various vehicles sold at auction, repossessed cars stand out as some of the best value options.

But what are repossessed cars? Are there any downsides to purchasing these cars at auction? And why should you care?

Understand What Repossessed Means

The first step to finding the best deals at car auctions is understanding what repossessed cars are. At general car auctions, you’ll find a mix of vehicles ranging from trade-ins and fleet cars to ex-rentals. These are often sold by dealerships, private sellers, or rental companies. While you can still find good deals at these auctions, the prices aren’t always dramatically lower, as they tend to attract a lot of competition.

Repossessed cars are cars reclaimed by banks or finance companies because the previous owners failed to make payments. These vehicles are often sold quickly to recover outstanding debts, which means starting prices are typically lower than market value. However, this also makes them a popular choice for budget-conscious buyers searching for the perfect auction opportunity. There are a few drawbacks to these types of auctions, including the fact that documentation can be limited and warranties are usually not included.

Tips For Buying Repossessed Cars at Auction

Do a Thorough Vehicle History Check

Unlike traditional car sales that provide detailed service records, repossessed vehicles may have little to no documentation. For this reason, it’s always advised to do some due diligence before hitting the auction floor and placing your bid. You can start by asking for the car’s Vehicle Identification Number (VIN), which will allow you to access a range of information, including accident and damage history, mileage verification and theft and cloning alerts.

This will help you identify red flags and reduce the financial risk involved in purchasing a vehicle sold as-is. There are a range of websites that allow you to check the VIN number, including VinDocs.

Inspect the Car in Person if Possible

Along with doing your research at home, it’s always advised to inspect the car in person to help you get a feel for the car’s overall condition. Most auction houses hold an auction preview, which usually takes place a few days before the auction. Seeing the car for yourself lets you confirm mileage, model specs, or missing parts before you place your bid. If you’re unfamiliar with the ins and outs of vehicles, it’s always a good idea to bring along someone who does. This can help you spot issues you might miss, such as signs of engine trouble, previous accident damage, or potential repair costs.

This ensures you’re better equipped to estimate how much you’d spend on repairs, which you can factor in when determining your maximum bid.

Be Realistic About The Vehicle’s Condition

When buying a repossessed car at auction, it's important to manage your expectations. These vehicles are taken back by the bank or lender due to missed payments, which often means that these vehicles may have received little care or maintenance in the lead-up to its repossession. Some former owners may have neglected services or skipped repairs.

However, not all repossessed cars have been neglected to the point of no return. Some just need a little TLC, something that you should consider before placing your bid. Always consider the overall condition of the car, the cost to bring it up to standard, and whether the deal still makes sense when all expenses are included.

Do More Homework

Buying a repossessed car can be cost-effective, but it requires careful attention to detail if you want to end up with a vehicle that truly meets your expectations. With this in mind - you can never do too much research. Before searching for your next vehicle auction on Auction Calendar, decide on the type of car you want to buy.

Do you have a specific make in mind? Or perhaps a colour you would prefer? When you do a bit more research, it gives you a better idea of what you’re not looking for, ensuring you avoid any disappointment. A good way to set your budget is to research the make and model of your desired vehicle, comparing it to current market prices and recent auction results for similar cars.

Don’t Forget the Extra Costs

It can be so easy to get swept up in the excitement of the auction, but it’s important to remember the additional costs that you may incur when buying at auction. Auctioneers typically charge a commission of 6% to 10%, which is added to the selling price. On top of that, the standard 15% VAT is also applied to the final amount. Buyers are advised to factor these fees into their budget, as they increase the total cost of the vehicle.

Bank repossessed vehicles offer an excellent opportunity to find a vehicle that fits both your needs and budget. However, it’s important to approach auctions well-prepared, keeping in mind the various factors - from service history to additional fees added to the final price. With careful research and attention to detail, you can make a confident purchase and drive away with a great deal.

If you’re ready to find your next car auction, make sure you visit Auction Calendar!