Government Auto Auctions

Buying at a civilian or government auto auction can be a great way to buy a quality used car or other asset. Like most things, though, information is key. Below are some frequently used terms that you will find helpful if you are interested in buying a car at auction.

* Off-lease: Refers to vehicles returned to a leasing company at the end of a lease term. Closed auctions are usually the only place for leasing companies to get rid of their large volumes of end-of-lease returned cars. The terms of a lease normally put a restriction on the number of miles driven and require regular maintenance so they can be good bets. Usually, off-lease vehicles are returned within 2-3 years, and often have some portion of their factory warranty remaining.

* Off-rental: Refers to the flood of late-model cars that are replaced (generally once a year) by major car rental companies. Like leasing companies, rental companies also generally rely on auto auctions to sell off their used inventory. Although these vehicles are generally well maintained and driven for only one year, mileage can accumulate quickly on a rental car. In addition, optional features on rental cars are generally limited to an air conditioner & automatic transmission. Usage of rental cars can be rough (think about the last time you rented a car!) so it is safe to assume that each rental car will be driven by a wide range of drivers in a variety of driving conditions.

* Company/fleet cars: Companies of varying sizes own cars, trucks and vans that they often keep for only two to five years. (I typically drive a four to five year old Ford F-150 truck that I buy from a Northern California construction company.) These vehicles are typically well maintained, but like rental cars, often do not have more than the most basic options. Like rentals, the use of company cars varies greatly from the executive sedan driven slowly and carefully to the work truck that regularly climbs, curbs and mountains or gets abused in city traffic.

* Repossessed Cars: Vehicles repossessed by financial institutions, banks and leasing companies are most often disposed of at auction. (I had a beautiful Mercedes Benz 560 SL repossessed years ago - someone probably got a great deal at that auction!) Repossessed vehicles can feasibly sell for less because the financial institution’s only real motivation is to recover the amount owed on the car which can be substantially less than the fair market value of the car. The condition of such cars may be marginal (if the owner can’t pay the loan, repairs could also be put off). There can also be intentional damage done by the driver who is losing the car, so inspect them carefully.

* Trade-ins: Car dealer inventory that is aging or does not meet their profile (for example an older Chevrolet Malibu that was traded in for a new BMW M5 at a BMW dealer). Trade-in cars may have useful extras and sometimes even valuable after market modifications. The overall condition of such vehicles varies greatly so inspect carefully. Some, though not many, may have some factory or extended warranty period remaining.

Many laws require dealers to disclose if a car has had a major mechanical problems or has been previously damaged to the extent that it mut be classified as “salvage,” “junk,” or “for export only.” There are special auctions for these types of vehicles, (sold mostly by insurance companies) and if you have access to reasonably priced repair services, you may find great deals here.

As always, information is your primary ally. Arm yourself with good information before you head out to the auctions and you will find many Great Deals.

To search for great deals at auto auctions, please CLICK HERE.

You’ve probably seen in the news that the US government is stepping up its seizure of cars, boats and land from suspected criminals. Raids on drug dealers and other mobsters have seen many high-end luxury cars seized by the government. Add that to the huge numbers of cars that the government already has and you get a recipe for savings. Government auto auctions are held all across the country in nearly every city. Information regarding the auctions is available from a variety of sources including sites that charge small membership fees.

Buying at auction can be a great way to buy a quality used car. Like most things, though, information is key. Below are some frequently asked questions and answers that you will find helpful if you are interested in buying a car at auction.

Frequently Asked Questions about Government Auto AuctionsQ. How do I make my vehicle preferences known so the auction can inform me as to when they might be for sale?

A. Dealers can submit “profiles” to auction marketing departments, describing the types of vehicles they are interested in purchasing. Dealers can indicate the make, model, price range, condition and supply source for vehicles they would like to receive pre-sale notification on. This “Want List” can be submitted electronically, by mail, by fax, phone or in person to an auction’s marketing department.

Q. Can a dealer bid on a car before the sale begins?

A. No, unless it is offered on an Internet venue.

Q. Is there a minimum purchase requirement?

A. No. Dealers can purchase as few or as many vehicles as they need based on their credit limits.

Q. What should a dealer do if he wants to purchase a vehicle that went through the lane as a no sale?

A. The dealer should communicate to the dealer representative, ringman or other auction official in the lane to facilitate a potential purchase.

Q. How does a dealer establish floorplan financing with the auction?

A. Most auction chains have in-house financing departments that can help independent dealers arrange for credit. Most franchised dealers use their manufacturers’ captive finance companies to establish a line of credit with auctions.

Q. What’s the difference between auction certification and post-sale inspection?

A. Auction certification is requested by the consignor and takes place before the sale. Post-sale inspection takes place after the sale and is requested by the buying dealer.

Q. Can a dealer buy a car at auction and resell it at auction the same day?

A. Yes. The dealer will have to re-register the vehicle.

Q. Do all auctions use electronic registration?

A. Most do, but some auctions do not yet have this technology in place.

Q. How long in advance does a dealer need to register for an auction?

A. The sooner the better, but dealers can register at any time – even on sale day.

Q. How do I register one of my employees or a representative who can bid for me?

A. Dealer principals can authorize representatives to bid for their organization at the time of registration or via a Letter of Authorization. Authorized representatives must have a valid driver’s license.

As always, information is important. Arm yourself with good information before you head out to the auctions and you may find a Great Deal.

To search for great deals at auto auctions, please CLICK HERE.

At government auto auctions you will find great deals on hundreds of cars. The cars include those owned and no longer used by government agencies as well as those cars seized under certain forfeiture and seizure laws. Every week hundreds of cars with starting prices of $200 are available including models from Mitsubishi, Toyota, Cadillac, BMW, Ford, GM, Nissan, Honda, Chrysler, Lexus and others.

The government’s eagerness to quickly sell off its car inventory is an advantage that cannot (or at least should not) be overlooked by any serious car buyer looking for a great deal. Fortunately for buyers, the goal of the government is to dispose of the vehicles it no longer needs as quickly as possible at almost any price. Anything is better than storage and maintenance expenses. Like most things in life, however, when buying a car at a government auto auction, there are disadvantages as well as advantages. Below are some of the disadvantages.

1. Selling Terms - Auctioned cars are all sold “as is.” After buying one, there is no opportunity to complain about its condition, to exchange it or to ask for a refund. Therefore, as when buying any used car, take the time to inspect the vehicle’s condition as much as possible and learn as much about the vehicles that you are interested in before you go to the auction.

2. Intimidating - When you attend your first government auto auction, it may seem intimidating, However, as with most endeavors, those feelings diminish with each additional visit. It may be worthwhile to attend one or two practice auctions to become comfortable with the process. You may also pick up valuable information concerning price and condition before attending by keeping track of on-line car auctions.

3. Time - Searching for the government auto auction in your area, registration, preliminary checking, attendance, and getting all the necessary paperwork done after purchase may take up to a few weeks. Again a practice run or two may help streamline things for you.

4. Pressure - Unlike buying a car through a private party or dealer, there is not a lot of time to consider all the facets of the deal. You must often fly by the seat of your pants, make quick decisions and hope for the best. Gathering as much information as possible in advance concerning the auction process and the cars that you are interested in bidding on is key.

5. Vehicle Inspection - While most government auto auctions provide an opportunity to make a visual inspection of the cars for sale, you are not going to have an opportunity to take it to your mechanic for a comprehensive inspection of the mechanical parts. You can offset some of this concern by (a) bringing a knowledgeable mechanic with you or (b) having someone available at home who can get a history report of the car using its Vehicle Identification Number (VIN).

As always, the more information you have the better. Arm yourself with good information before you head out to the auctions and you’ll find lots of good deals at government auto auctions.

Government agencies such as the IRS, U.S. Customs Service, Small Business Administration, Department of Defense, U.S. Bankruptcy Court, U.S. Treasury Department, Forestry Department, Department of Agriculture, and many other federal, state and local government agencies dispose of their cars in government auto auctions that you can attend. Buying at a government auto auction takes a little study because it’s part art and part science. However, it can be a great way to buy a quality used car very cheap. Below are some of the advantages you can expect from buying a car at auction.

1. Seller Motivation - While both private sellers and car dealers set out to make as much money as possible from any car they sell, a government auto auction is geared toward simply disposing of as many cars as possible in order to avoid storage and maintenance costs.

2. Starting Price - While dealers and private sellers start with their absolute highest price, cars at a government auto auction have starting bids that are as low as possible, often 80% to 90% below Blue Book prices.

3. Vehicle Condition - Who really knows how a private party maintained his or her car? At a government auto auction you generally know that the cars have not been used more than 5 years and were properly maintained throughout their lives.

4. Unique Selection - Because of government seizure laws, more and more high-end luxury and exotic sports cars are being sold at auction. In addition, it is possible to find many specially equipped work vehicles that are not otherwise through private-party or car dealer sales. Checking online auction inventories can help you find what you are looking for.

5. Low Pressure - In spite of what may seem like a carnival atmosphere of a government auto auction, you wont be hounded by any salesman to make a deal. No one will sit you in an office while the salesman “checks with his manager.” No finance manager will squeeze you for every last dine. No one will try to sell you needless and expensive options. What you see is what you get (if you want it).

As always, information is your primary ally. Arm yourself with good information before you head out to the auctions and you will find many Great Deals.

GOVERNMENT AUTO AUCTIONS: What to Expect at an Auto Auction.

You have probably seen the ads: BUY GOVERNMENT CARS AT AUCTION FOR $200. The truth is that you’ll be unlikely to pick up a nearly new, high-end car in perfect condition for $200. However, you CAN find great deals on used cars at government auto auctions. (By the way, government auctions are not limited to cars, but can include boats, aircraft, office equipment, furniture, heavy machineries, and even foreclosed or seized land and houses.) Government auto auctions are held all across the country in many locations. Information regarding the auctions is available online for from sites that generally charge a small membership fee.

While government auto auctions are great for those who are looking for a huge bargain, it’s best to collect some knowledge first. The following tips will put you in a better position to grab the best deal from the car auctions.

1. Search for information that will give you a clear picture of the specific used car market that you are interested in. Different cars can command far different prices in different parts of the country. There are great online sources available such as Edmunds.com, kbb.com (the Kelly Blue Book people) and nada.com (the National Automobile Dealers’ Association). Print out some of the information for reference at the auctions.

2. Bring your drivers license and some other form of ID to the auto auction.

3. Be early to the government auto auction. This is definitely a situation in which the early bird catches the worm. Be at the auctions ahead of the crowd so you can take a close look at and inspect each of the cars that interest you.

4. Perform a physical inspection of the cars that interest you. Check the body fit, the paint, the engine compartment and the tires to see that each appears to be in good condition. It is highly recommended that you write down the Vehicle Identification Number (VIN) and have a friend at home check the number with an online service. Several online services will generate a detailed history of the car using the VIN for a nominal cost. The reports will list any problems with the car from accidents and sometimes even include service history.

5. Once you successfully bid on a car, be sure to closely review the contract so that it does not contain any conditions that you are not comfortable with. Pay particular attention to the period in which the seller has to deliver the title to the car to you. Often sellers do not have physical titles to the cars they are selling with them and you do not want to have to wait too long to receive your title.

6. There is no financing available at government auto auctions, so make sure you have money available to pay for any car you buy. Many auctions require that you pay for the cars you buy with a bank draft so be sure to investigate the payment requirements of any particular auction before you attend.

7. Set a limit that you are willing to spend BEFORE you get to the auction and do not go beyond that limit. Too often people get caught up in the frenzy of bidding and chase the price of a car well above what would be considered a good deal.

If you are not sure that you want to buy a car at action, go ahead and attend one just to see how the process works. You may be surprised how many quality vehicles and good deals are available.

Finally, don’t leave your brain at home. Just because a car is being sole at an auction does not necessarily mean it’s a great bargain. If the car needs serious repairs of has a checkered history, it may not be worth much. As always, information is king.

Get good information, do your homework, know in advance what you can spend and inspect the cars as much as possible before you head out to the auctions and you will find some great deals at government auto auctions.