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Save Thousands on a Used Car

By: Eric Peters

If you're in the market for a used car or truck, vehicle auctions may be your best low-cost alternative to dealerships, used-car lots and classified ads. Auctions used to be "insider-only" events-restricted to buyers representing dealerships and other professionals. Cars would be bought wholesale, then resold to consumers with a dealer's markup. Now, with a glut of used vehicles for sale as they come off leases, many vehicle auctions are open to the public. The main types...Government auctions. Federal, state and some local governments hold auctions to dispose of cars that they no longer need or vehicles that have been seized. Auctions are advertised on local radio and TV stations, or you can contact town officials for information.

For information on federal auctions, see the General Services Administration's auction Web site at www.autoauctions. gsa.gov or write to GSA Fleet Vehicle Sales, 1941 Jefferson Davis Hwy., Arlington, Virginia 22202.Charities such as Goodwill Industries (800-741-0186, www.goodwill.org) and the Salvation Army (800-725-2769, www.salvationarmyusa.org) auction cars that they have received as donations.

Car wholesalers auction dealer trade-ins and excess inventory.

Attending most auctions is free, although you may have to register in advance. If you do buy a car, you typically take it home the same day.



Advantages

Why buy at an auction? In most cases, you'll pay less for a given make and model than you would elsewhere. The bidding generally starts at or below the average wholesale value of the car or truck in question. At a lot or dealership, your starting point for negotiation is the full retail price. The savings at auction can be as much as 40% off the dealer price, depending on the car and the number of bids.



Drawbacks

Potentially shabby appearance. An auction company's costs are lower than a dealership's, in part because it doesn't service, clean up or otherwise "detail" the vehicle to make it presentable.
Hurried pace. You have to make a quick decision when the moment arrives.
Mechanical problems. You will have a few hours at most to check out a vehicle. You can start the engine and hear it run, but test drives are rarely granted, so it is difficult to gauge a vehicle's mechanical condition. There are legal protections and, depending on the auction, there even may be a guarantee of some kind-but if you're not satisfied with the car, it's harder to seek redress against an auction firm, which is likely to be based out of state, than a local dealership or private seller in your community.


Auction strategies

To boost your chances of getting a fair deal...Arrive early. This will give you time for a thorough "walk-around" inspection of any car you're interested in. (You can open the hood, crawl underneath the car, etc.) Jot down the car's make, model, vehicle identification number, model year, mileage, features and other information that might affect its price. If you are not familiar with cars and where to look for signs of trouble, bring a car-savvy friend or ask a mechanic to accompany you for a fee-say, $100 for two hours. Bring a laptop computer or personal digital assistant (PDA), if possible, so you can research cars on the Internet.

Alternative: Arrange for a friend to look up the information when you call from your cell phone. Never bid on a car until you have checked its value with such sources as the National Automobile Dealers Association's used-car pricing guides (800-252-6232, www.nada.org). Run a check with Carfax.com to instantly find evidence of odometer fraud, flood damage, accidents, etc.

Cost: $19.99.Check the car's title before any money changes hands. Don't buy a car that lacks a clean, lien-free, transferable title. Keep a clear head-don't overbid.



On-Line Auctions

On-line auctions such as those on eBay Motors have grown in popularity. They run for several days-giving you ample time to check a car's vehicle identification number. You can make arrangements with a buyer to see a car before purchase, but that might involve traveling. You can use the site's escrow service to hold your down payment, which varies by lender, and pay the balance when the car and paperwork are transferred.