Crunch your numbers
Know what type of vehicle you want and how much you’re willing to spend. Don’t forget to factor in the closing costs. A 10% buyer’s premium (usually capped between $200 and $500) often applies on top of registration fees. Then there’s the cost of temporary plates, towing and/or insurance to drive the car off the block. “Buyer’s remorse happens so it’s important to be prepared,” says Dean Kirk, sales manager for Adesa-LVG Auctions. Compare prices for similar cars at websites such as canadianblackbook.com to estimate fair market value.
Don’t commit too soon
Some auctions feature an online catalogue in advance but it’s best to visit the cars during the “staging” period in the days before the auction. You can start the vehicles but you can’t test drive them. Collisions and other major problems must be disclosed so read over documentation carefully. If you can get your mechanic or gearhead cousin to join you, even better. “Look at more than one car because the odds are, you won’t get the one you want,” Kirk said.
Watch from the sidelines
Pay attention to the auctioneer and his assistants, also known as ring men. “Sometimes you may think you have the highest bid, but you don’t,” says Kirk. There’s a good chance you’ll be bidding against the pros—used car dealers can and do bid in public auctions—so it’s best to watch a few cars go on the block before jumping in.
Keep your cool
Never be the first to bid. The auctioneer will often start with a price higher than what the seller has indicated as their lowest acceptable price. A few moments of silence will force the auctioneer to drop the starting bid considerably. At that point, it’s safe to start bidding. “Unreserved” cars are those for which the seller hasn’t set a floor price. These cars often attract the most attention and bids can skyrocket past fair market value so tread carefully.
Avoid the drama
Skip the commotion altogether by staying at home and bidding online in real-time. Online bidders are usually subject to a 2%-2.5% convenience fee so factor that into your total budget.
Cash is king
Bring a cash deposit. Some auction houses offer a small discount (around 3%) for paying in cash. Typically you’ll have a few days to come up with the rest of the money and pick up your vehicle.