Buying from online car auctions is always an option for purchasing a new car, but is it still a good one? Are car auctions worth it? Or are buying from online car auctions just a waste of money?
This article discusses the dark side of buying from online car auctions, especially Copart and Insurance Auto Auctions, two used car dealers companies based in the UK and the US. It offers some great tips for those who want to do it anyway!
In JIJI AUTO GROUP searched into thousands of buyers' opinions about these two famous dealers and gathered their opinion based on their experiences in buying cars in Copart and IAA auctions. Let's get to them.
Buying from Online Car Auctions
The process of purchasing a car is always complicated, no matter where you buy it from and how you want to pay. There is still a fine print, deception, and things you're expected to know about buying a car.
In particular, car auctions, especially online auctions like Copart and Insurance Auto Auctions, have many unspoken rules and tips that most learn from experience. It looks like it's so easy to lose your hand at the money you saved for a new car.
However, a lot of research into how car auctions like Copart and Insurance Auto Auctions operate and what to look out for to shed light on the entire process brought us on some traps you may get into, buying from these auctions.
We all know when going into any financial agreement with a stranger, we can never ask many questions or observe a vehicle thoroughly, so we can't be sure about the conditions of the used cars we will buy.
Online car auctions add a bit more anxiety than the average sales scenario because they move at a much faster pace. New buyers find themselves deceived and duped into buying useless cars without realizing it.
Bidding your hard-earned money can be a challenging experience, but when you're making a large purchase like a car, you want to be entirely sure of your choices. Following are ten tips on why you should pay extra attention to buying vehicles from Copart and IAA auctions.
1. They Lure You Into a Red Light Title
The car auctions have a color-coded system that lets buyers know how exactly the cars are. Greenlight titles mean the car is mechanically fine, red light titles mean the vehicle is being sold as-is, and yellow light titles mean the car may have some fine print but can have a title.
Some sellers mislabel the car as a "green" when it's, in fact, a "red." If participating in Copart or Insurance Auto Auctions, you found out the given car is not the intended one, you're entitled to your money back.
Of course, it depends on the auction, so it's essential to perform a fair amount of research before bidding. Buyers in Copart and IAA believe that you won't recover your money in such situations.
A user says about Copart, "You can buy the same vehicles they offer at your local auto auction for the same money that has clean titles and isn't wrecked by the time you finish paying all their ridiculous fees."
2. The Odometers are not Trustable
Usually, in public auctions, including online ones, there is a severe issue of fraudulent odometers. It's something that any used car buyer should keep in mind. Experienced buyers in Copart and Insurance Auto Auctions claim that if you are looking to purchase a car at these auctions, expect that the odometer has been rolled back 200K miles!
A Copart buyer shares his experience and says, "I've been screwed over a couple of times by Copart. They told me the car is a run and drive, but it wouldn't start! I got a battery, but it still wouldn't fire over. I went to put some gas in it. There was no gas tank! I popped the trunk, and there's a gas can with a hose in it. I called them to complain, and the Copart operator told me I could relist it for $600, but since I already paid for the car and it's at my house, I should put the title in my name, then sell it for just $90"!
3. You won't Receive the Title in Time
Even though it's commonly overlooked, online auctions are not the place to skip the fine print, especially since it could mean getting your given money back. When you're buying a vehicle from a car auction like Copart or Insurance Auto Auctions, it's wise to determine how many days it will take before the winning bidder receives the car title.
If the used car seller can't deliver the title within this intended time, you could get your money back because the auction companies have breached the intended contract. It's important to know, anyway, in case you're dealing with a shady seller. First, be sure to check the contract's details to understand what exactly each party is agreeing on.
4. You Pay more than What you Bid for
Many newcomers fail to realize that the auction price includes unmentioned additional expenses. The clearest ones are the buyer's premium as well as a deposit.
The deposit money is always required on-site after you win a bid on a car, and it can increase a few issues if you bid base on the money you don't have.
Instead of coming up with empty hands, keep your bidding well within your budget to make sure that you'll have enough money to cover the additional costs as well as transportation for your purchase.
5. There are no Vehicle History Reports
The most critical action you should take before buying a used car at an auction is getting a used vehicle history report. These reports aren't just glimpses into its accident record, but it also gives a thorough insight into what sellers may hide from you.
The US officials report that at least a half-million cars are sold with fraudulent odometers each year in this country. Then, the vehicles were damaged during hurricane-induced flooding, which typically totals a car. However, shady sellers will rebuild these cars and put them right on the market without mentioning the previous damages.
6. No One Helps you through or after Purchasing
At any offline or online auction, it's every man for himself, so it's logical to become familiar with how auctions like Copart or Insurance Auto Auctions work, maybe even observe a few before making your purchase.
But still, the cold and hard truth is that car auctions can be brutal, considering you have no word in the process of buying a car online. Sellers want to get rid of their vehicles, even if they're not in excellent condition, and the auction companies wish to own their money.
For instance, an Insurance Auto Auctions buyer says, "I won an auction, and I received a confirmation stating that I was the high bidder and to submit payment. I wired the money. I subsequently received word from the IAA that they had chosen not to sell the car after all! I, as a bidder, do not have the option to back out of a contracted auction price, but they can cancel the contract anytime they want!"
7. They Bring Questionable Vehicles to the Auction
If you spot a few slightly bad-looking cars at an auction that just so happen to be sold by a car dealer, you may steer clear. These kinds of sellers have a preference for selling to people or other dealerships; it's only at last-resort that dealers will resort to an online auction event.
It's a red sign to see any of their inventory wind up, and buyers would be wise to keep moving. We don't say there isn't a prize hiding under these failures, of course. Just be cautious of them, and don't spend your life savings on these used cars.
8. Transportation Significantly Increase the Total Cost
There are a lot of costs that newcomers don't realize when they're budgeting for their very first online car auction. Among those deceiving costs, you should make way for shipping costs if you live somewhere far, especially in foreign countries.
It should be a no-brainer for anyone who lives elsewhere, you've got to have some way of transporting your purchase, but you'd be surprised at how many people don't consider this fee.
Or, they underestimate the cost. It's always a good move to contact companies you'd consider transporting your potential purchases; then, you have expectations of transportation costs.
9. Some Sellers are Masters of Disguise
Many used car sellers come in contact with ragged-out cars regularly. Therefore, they're experts at concealing severe rusting, strange engine noises, etc. You never know where these used cars have been, but beware of all and spend a reasonable amount of time thoroughly inspecting any vehicle that is of interest to you.
Getting rid of bad used cars at the highest price possible is the prime goal of any seller that's been stuck with a lemon! It is okay if you're looking for a parts car, but for anyone else, this should be something you're fully aware of. It is why research is of utmost importance during the car-buying experience.
10. False Bids will Cost you more
When you show up at an online car auction, you may be a bit shocked to know that the paying options aren't exactly advertised upfront. Having a secured loan is an excellent thought.
If you make a mistake and bid on a car that you don't have the money for, you could find yourself in an awkward predicament. These are false bids and can put you at risk of losing your deposit and liable to pay for damages incurred to the car seller. Of course, if this happens, it's on you!