photo credit: dmytrok

You have probably heard of people buying cars at government auctions for amazingly low prices. Even on nice cars, the bids start very low – often in the hundreds of dollars. People really do buy nice cars for very low prices, because the government, whether a local police department or a national agency like the DEA, wants to unload these cars to avoid having to pay for storage and maintenance for them. Seasoned car dealers often buy cars at these auctions, and for obvious reasons, they keep quiet about this great source of good pre-owned cars. But in many cases, you can bid on cars too, whether online or at a live auction.

You may have thought about buying a car at an auction, but were turned off by some of the disadvantages. But think again: there has never been a better time to buy at an auction, not just because of the enormous selection of cars, but also because of the wealth of information you can gain beforehand to ready yourself for the process. Here are three common concerns about car auctions and why you should consider an auction anyway.

1.    Cars are sold “as is.” While there may be a three month guarantee that a car runs, you can’t exactly exchange it or return it for a refund. That means you have to be sure up front that you won’t be wasting money on a defective vehicle. Here’s how to do that: get a CarFax or other history of the car beforehand. At a live auction, give the vehicle as detailed a vehicle inspection as you can. If you can bring a mechanic, or even someone you know who works on their own car, that’s even better because they will know what things to look for, like signs of flooding or water damage. And you can always copy the VIN and have someone at home ready to get a history report on the car for you.

2.    Live auctions can be intimidating for beginners. It may be hard for you to keep up with the auction pace. There are several ways you can address this. You could attend a couple of auctions just to watch, so you can get a feel of the pace and watch what car dealers do when they bid. Some online informational sites have free material to educate you on how to participate in live auctions. And if you’re sure that a live auction just isn’t for you, there are many online auctions in which you can bid.

3.    Time and sales pressure discourage you from trying. There is a lot involved in successfully bidding on a car at an auction. Finding the auction, registering, visually inspecting the car, being ready with a down payment, and following up with the balance of payment are all time-consuming tasks. And you must be prepared to move fast, so you’re under pressure. Again, online auctions are one solution to your concerns. But also, researching the make and model you’re interested in, and knowing in advance how high you’re willing to go on the models you might bid on will help you remain calm in what may seem a chaotic environment.

If you like the idea of buying a car at an auction, you probably still have concerns about the process. Gathering as much information in advance as possible, being ready with a down payment, and knowing your own bidding limits could help you save thousands of dollars on the car you’ve always dreamed of.

This post is courtesy of Government Auto Auctions blog where you can get the latest news in government auto auctions.

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Manheim, a subsidiary of Cox Enterprises (which also owns several newspapers, television and radio networks, and Internet technology platforms) is the world’s biggest automobile auction chain. Of course, this is more than just the occasional car auction here and there. Manheim employs 34,000 workers and has 140 different operating locations. Manheim helped 10 million cars change hands in 2008 alone, with transactions totaling more than $50 billion.

Manheim runs auctions for car dealers only, with cars usually available from a number of categories, including used cars more than four years old that major dealers don’t want; exotic cars from collector dealers; used rental cars from rental car agencies; trade-ins dealers have taken of brands they do not normally sell; and cars returned at the end of leases.

Manheim continues to extend its global reach through innovative technology, and serves the car “remarketing” industry in more than a dozen countries, including China. Both live auctions and online auctions are part of Manheim’s operation, bringing together volume buyers, sellers, banks, car rental agencies, government agencies, and carmakers in a vast automotive marketplace.

Actually, “vast” may be an understatement. Every year people buy 40 million used cars, which is three times the number of new cars bought. In 2008 36.5 million used vehicles were sold, compared with 13.2 million new ones.

photo credit: Paco Espinoza

Businesses like Manheim have a long list of services, including getting the cars together, writing condition reports, advertising the wholesale auctions with dealers, and reporting results of their auctions. These outfits also have facilities for complete body work for high volume dealers of used cars. In 2007, Manheim opened an enormous reconditioning center with state of the art technology and environmental improvements such as the use of water based paints.

Manheim is great at what it does, which is help cars change hands. In fact, it does it so well that the Federal Trade Commission (FTC) in 2000 ordered it to sell off nine auctions in seven markets. This was after Manheim bought ADT Auctions, which used to be a subsidiary of Tyco International, and the U.S.’s third largest automobile auction chain.  One of the dealers Manheim was ordered to divest itself of was in Phoenix, Arizona, where Manheim had a monopoly on car wholesale auctions. In the FTC’s ruling, Manheim had to sell eight ADT auctions and Manheim’s auctions in Phoenix to an Indianapolis company called ADESA in order to restore competition to those nine regions.

Ordinary folks can’t go to Manheim’s auctions. They are for registered car dealers only, and being registered isn’t necessarily an easy thing to do. While these are great places to buy cars, your only real shot at getting a car from them is if you happen to know a registered dealer who is willing get an advanced list and bid on your behalf. Of course, you’ll want to pay the dealer for going to the trouble, but it could still be a great way to get a good car at a great price.

This post is courtesy of Government Auto Auctions blog where you can get the latest news in government auto auctions.

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