How to Prepare for an Online Car Auction

Last Updated on January 25, 2022

There are a number of ways to go about purchasing vehicles, some more convenient than others, some more costly. One way that’s both frugal and convenient is online car auctions. Buying at an auction is certainly a different experience than walking through your local car dealership. This isn’t your average car lot. There’s no test driving before hearing the word, “Sold!” All the same, you still have to know how to prepare for an online car auction to get exactly what you want. 

They require a bit more knowledge and savviness going in than the local car place. Luckily, we’ve got the details so you can head into any online auction room feeling confident and ready. Here’s your need-to-know for the next online car auction.

What Happens at an Online Car Auction?

When you visit the local car place, there’s the dealership rep, yourself, and whoever else you brought along. When you venture to the online auction, there’s you, the auctioneer, and other buyers competing for the same vehicle.

With the in-person element removed, you won’t be able to ask questions as conveniently as you would otherwise. However, auction sites may have vehicle history reports available for the car you’re eyeing. And that’s not the best part. If the car you want isn’t nearby, well, purchasing the vehicle online means you can shop nationwide.

Bidding for a vehicle online is in its simplest definition, a lot like buying anything else via online auction. Think, eBay, but of course it’s not that simple. The purchase prices can be higher, the rules are a little different, and the stakes can be much greater. To make sure you’re not treating your online vehicle auction experience like any other car purchase, you’ll want to understand the ins and outs of the auction world, be prepared for the fast pace. Make sure you double and triple-check all your details before placing that winning bid.  

What Types of Online Car Auctions Are There?

Before you sign in and start bidding, make sure to know what kind of auction you’re taking part in. Of course, an online auction will be different from those occurring in person, but there are other distinctions too. For example, a public auction will run a little differently than a government auction. Private auctions are different from those that are public.

Public Auctions

A public auction often consists of repossessed vehicles, wholesale lots of cars, and sometimes, high-end sports cars and SUVs. The range of quality at a public auction will vary greatly. Therefore, it’s extra important to make sure you’ve checked out a specific vehicle’s history before bidding.

Government Auctions

In a government auction, the featured vehicles will usually include old police cruisers and utility trucks. There may also be vehicles impounded for traffic or other violations. These auctions tend to be highly competitive, with used car dealers and taxi companies often taking part. 

Private Auctions

In private auctions, most of the consumer base is comprised of car dealers. This is because typically closed auctions are only open to people with a dealer license. They use these auctions as an opportunity to stock their inventories with affordable cars to then resale.

Online Auctions

When you venture onto an online car auction site, you’ll likely need to register with the site before bidding. After you register, begin your search. What makes online auctions so advantageous is that you can acquire a vehicle in an entirely different state without needing to be physically present. You may find a car better priced outside of your state than within.

4 Steps to Prepare for the Next Online Car Auction

Online car auctions may not be in person, but they are still fast-paced. The auctioneer won’t be talking 1,000 miles a minute, but you still have to pay keen attention to what’s being said. Of course this is easier said than done, but don’t fret. Here are 4 steps to prepare for the next online car auction.

1. Know what you want

Always go into an auction with a specific list of vehicles you’re after. Keep the list small, focusing on just the few you’re willing to bid on. Once that’s done, it’s time to put your student hat on and start researching. The more you understand the vehicle before you buy it, the smaller your chances of being surprised by any negative outcome, if there are any.

The research process entails figuring out a vehicle’s ins and outs. Check out our handy guide to reading vehicle history reports to get started on the right foot. Consider what others have thought about the specific year, make, and model vehicle you’re interested in. You can find valuable information on reputable sites like Edmunds.com.

While researching, you should also consider any recalls on the desired vehicle. After being on the market for some time, certain year model vehicles experience recalls due to commonplace errors or malfunctions. These recalls can be minor, but they can also be very serious. Either way, once you know, you can decide whether or not to bid on a vehicle. For help discerning recall information, use sites like Kelley Blue Book and National Highway Traffic Safety Administration.

2. Ask plenty of questions

As you enter the online auction space, be prepared to showcase your due diligence. Aside from adhering to the auction schedule, you should also have list of questions to ask beforehand. For example, one important question is whether or not the auction allows for in-person inspection of the vehicle. You may not care about this option if you live out of state, but if traveling is possible then this is a good idea. You’ll feel more confident that you’re getting what you pay for by seeing the vehicle. And naturally, auctions that allow for in-person inspection will be more trustworthy than those who do not.

Also, spend some time verifying the vehicle information presented by the auction with your own research. Cross reference details using VIN reports and any other applicable information. Ask about anything that appears questionable.

Get familiar with the schedule before the auction begins. Doing this lets you pick out the vehicles you are most interested in, know when they’ll appear in the auction, and formulate your questions.

3. Recognize the differences between an auction and a dealership

Auctions and dealerships are undoubtedly different. Bidding on an auction vehicle isn’t like shopping at a dealership. Recognize what sets the two apart and make use of those differences.

Dealerships

Test driving a car is always an option with reputable dealers. However, auctions do not always give this option. What sets dealerships apart too, is that while some haggling can take place, the deals will be more fixed than what’s available online. However, dealerships can alleviate some of the effort needed to research a vehicle by providing you with an in-depth report, which you would otherwise have to find on your own.

Auctions

There are no returns at an auction. After you bid, then win a vehicle, that car is yours. What’s gain is gained, and whatever is lost will be yours no more unless you decide to upcycle or resell. If you purchase a disappointing product that is yours to keep. Conversely, online auctions give you far more flexibility than dealerships. Your shopping is not bound by your physical location. Is the local dealership pretty expensive? Online you can easily find more affordable pricing.

Auctions also have vehicle information viewable for potential buyers. Getting more information on the vehicle won’t be as easy as talking to a dealership rep. Still, the better pricing will be worth any increased effort.

Proxy Bids

Many online auction platforms will allow you to enter a “proxy bid,” or the maximum bid you’re willing to make for the vehicle up on the block (think eBay). This is a major difference between an online auction and a dealership. Entering a proxy bid will allow the system to keep track of other bids coming in and bid for you when you need to raise your bid. This is a handy tool if you’re multi-tasking with something else. However, it’s definitely not something you want to set and forget. 

Check in regularly with the auction and see how your proxy bid is going. Never set a proxy bid you’re not willing to pay – this should be no more than your “top dollar.” Remember, if you win it, you buy it.

4. Have a good internet connection

Nothing on this list will matter without a good Internet connection. Think about the devastation of missing out on your chosen vehicle because your bid didn’t upload fast enough. If you want to have a strong internet connection, avoid coffee shops and public places where many people are using the WiFi. Even with great bandwidth, there’s a chance an overcrowded internet connection will slow you down just enough to miss out. Remember, in an online auction every second counts.

Instead, set up shop in a place where your signal is strongest and turn off WiFi on all other devices, like your phone or smart TV. This will free up the connection so if you and one other bidder are up against the wire, you’ve got a better chance of calling that vehicle yours when the dust settles. 

The 5 Best Auction Sites to Buy a Vehicle

Now that you have a better idea about online car auctions, you need to know where to search. Here are 5 of the best websites to buy a car.

1. IAAI

This auction company offers nationwide services to both individual buyers and licensed buyers. Their catalog is free to view, though you will have to register in order to check out available auctions. What they sell includes SUVs, motorcycles, trucks, and other vehicles.

2. Copart

According to their website, Copart sells over 3 million automobiles each year. They offer trucks, cars, and SUVs. Buyers can search for vehicles with that meet criteria such as having a clean title, low mileage, and little to no damage.

3. eBay Motors

eBay Motors offers a plentiful array of vehicles, both from credible, and not so credible dealers.

4. Auto Auction Mall

Auto Auction Mall brands themselves on providing an auction service to the common person that would otherwise be reserved exclusively for dealers. However, they do offer dealer-only auctions and their catalog consists of a wide range of vehicles.

5. Bring a Trailer

Bring a Trailer is an auction company that sells a variety of vehicles, but only those that are classic or vintage.

Municibid

As a government auction, Municibid serves as an alternative to the other sites on this list. The company’s inventory includes cars, ambulances, fire trucks, compact tractors, and even some vehicle attachments.

The Next Online Car Auction

Be sure to dot your “i’s” and cross your “t’s” as you head into your next online car auction. Make sure you understand the terms of sale, full condition, and value of the vehicle. Study all the fine print before placing that winning bid. Take time to observe how the others at the auction are bidding. Even though auctions require a certain degree of intuition and knowing when to outbid the highest bidder, it’s vital to make sure you understand exactly what you’re purchasing and what to ask to confirm the purchase is worth your while.

In the end, if you’ve bid more than a vehicle is worth then you’ve made a pretty bad investment you can’t undo. Don’t make a bad investment.

Even though there are a fair number of risks that come with buying a vehicle at auction, it’s easy to avoid the majority of those pitfalls by simply taking the time to get prepared. If you put in a little extra effort before you enter the bidding room to fully understand not only the auction you’re bidding in, but the specific vehicle you’re bidding on, purchasing an auction vehicle online can be a fantastic way to save some money and get a great vehicle.

You’ve done it! You’ve prepared yourself for the next online auction. Now, all that’s left is to find the right vehicle for you.