What Happens at an Insurance Auto Auction
You are looking for a car, but your credit isn't strong enough to get one from the dealer. You don't want to take a chance by looking in the paper and buying it from a complete stranger, so what is the next best step? An insurance auto auction is a good place to find a quality used automobile. There are different types of auctions and seven steps to securing a car.
You're not limited to attending an auto insurance auction to purchase your new wheels. Insurance companies auction used cars four different ways:
- Live auction. If you are present when the auction takes place, you're attending the live auction. You can be there to give the car a once over before making the final decision to bid. So, if you are the type of person who wants to see exactly what you are purchasing prior to bidding on it, a live auction is always the best way to go.
- Live online. If you cannot be there in person but would still like to participate, you can view the auction online. Just hook up to the auction website and follow all directions for bidding on your desired car.
- By proxy. For those who cannot participate at all but are willing to trust someone else's judgement, by proxy is a good option. By proxy means somebody else attends the auction and places bids for you. Some auctions have people hired to do proxy work or you may hire your own proxy bidder.
- Between auctions. Sometimes a car that was expected to sell during the first auction isn't purchased. This car is put up for sale between auctions and the best offer is taken. Search the auction website for a list of cars put up for between auctions.
No matter which type of auction your heart fancies, there are some steps you need to take in order to get the car you want and be satisfied.
- Do your research and be prepared. Look at the car press to get an idea of what cars are selling for from both private sellers and dealers. Don't settle on just one car; have a few other car choices in mind just in case your heart's desire isn't listed. Have your money together in either cash, a bank check or a money order: try to have at least $500 or 10 percent of the blue book cost. Be prepared to make final payment within 24 to 48 hours of your initial down payment.
- Inspect and select car choices on the day of the auction. Be sure to have clear driving directions to the auction, and leave at least three hours before first open bid. Auctions are usually way out of the city and this will give enough time to arrive, pick up your bidder's guide and check out potential cars. It is also a good time to ask questions if the staff isn't too busy.
- Review the prices. This is a good time to ask a consultant about the expected price range of some of the cars. Perhaps one of your cars is being offered with no reserve.
- Participate in the bidding process. For the first-timers, it is highly recommended that you initially visit an auction and watch without bidding to become acclimated to the auction process. Bidding can start from any amount with price incremental increases ranging from $150, $250 or $500. Be firm in bidding and remember: whatever bid you make, you have to stick to it -- have the actual funds to back your bid up.
- Actively bid. Make sure you are bidding on the correct car. Check out popularity of the car by noticing how much action this car is getting. Don't get too excited; be patient but firm. Make sure the auctioneer notices your initial bid. Do not get drowned out by the other bidders.
- Sold! You are the top bidder. Take your down payment and identification to the Sales office; keep in mind that the auction house generally adds an additional 5 percent "buyers premium" to the price as sort of a commission for itself. Take care of all important paperwork and receive your proof of purchase and Guarantee of Title.
- Address the insurance situation. Ask if there are any temporary tags included so the car can be driven back and if an extended warranty can be purchased.
Congratulations! Remember, this is your car and you want to keep it as long as possible. Don't allow just anyone to drive your car and work on getting it fully insured as soon as possible. Happy and safe driving to you.