One of the best places to purchase nearly new cars with low mileage at a price as much as 90% off MSRP is an auction. Often, brand-name cars (including Porsche, Mercedes-Benz, Lexus, but also many family cars, SUVs, vans, mobile homes) become state or bank property when their owners are unable to pay debts, and have to be sold fast to avoid substantial storage and maintenance costs. Because of this it is sometimes possible to buy quality repo vehicles as much as 80-90% off retail price.
However, purchasing vehicles at auctions is an investition which should be treated with appropriate care. This is especially true if you are an inexperienced and/or first-time buyer. While the sums involved are usually far less than what you would pay at a car dealer, it can happen that after an intense bidding contest the final price (including premium etc) can actually exceed the car's real market value.
In order to help first-time buyers, I have put together the top 10 things to look out for when purchasing a repo car at an auction below.
10) Inform yourself in detail about the makes and models of the cars you are looking for. Wikipedia and various car sites have detailed profiles and technical data on most cars on the market, as well as lists of common defects to look out for.
9) When eyeing a particular car, take a good look at the maintenance history. Regular mechanical checkups should have been made. Pay particular attention to mileage, damage and accident history, paint jobs, and interior. Be sure to ask for the number of prior owners. Several pre-owners are likely to indicate prior problems with the aircraft.
8) Ask owners of the model you're looking for for common defects and issues with their cars. Even if you don't know anyone who owns the model personally, it is easily done at car forums on the internet.
7) If you find a good candidate, it's time for a thorough visual inspection. Be sure to check the paint (any scratches, irregularities, signs of subsequent paint jobs or rust?), tires (walk around and kick/feel them a little/measure the profile), seats/interior/pedals (should not look too used). Make sure seats and belts adjust as they should, that the electronic equipment works (stereo, heater, power windows, air conditioning, lights).
6) Have the engine started and check how well it's running. Any irregularities in the sound? Blue smoke from the exhaust pipe (oil, can mean that the engine is worn)? Oil leaks? Excessive white smoke (may mean that coolant is leaking)? All of those are warning signs.
5) When purchasing a repo vehicle at an auction, always start by observing. Attend the preview (usually held a while before the auction, and open to the general public). Stay cool during the auction, and decide what you want to bid beforehand. Never get into a bidding war, it's a surefire way to buyer's remorse.
4) Beware of any claims that sound too good to be true. At an auction, odds are they are just that - not true. Liability for a seller at a public auction is relatively low, and two powerful words - “AS IS" - basically free the seller of any responsibility. It is up to you to pinpoint them on essential statements and be wary of any outrageous promises.
3) Should you win the bid, insist on a written contract, and ask that all important figures and claims are mentioned (e. g. about prior owners or repairs, mileage, etc). Don't forget that the price you will pay is usually higher than the winning bid. Most auctions include a 5-10% buyer's premium.
2) Look at the VIN (vehicle identification number) plates and make sure they have not been altered. If they look like they have been changed, do not buy the car.
1) Do not be too hasty. Looking at some auctioned repo cars, you may get the feeling of a once-in-a-lifetime bargain, but in fact the market is pretty large and great opportunities are around all the time. It is best to observe a few auctions first to get a feel of the process, and only actively start bidding once you have a good idea of the market.
There are several large databases of auctioned repo cars and other vehicles online. One of the largest is http://www.autoauctionsonline.org/ , with unlimited access for a one-time fee of $19.95.