You may have heard of government confiscated cars or repossessed cars being sent for sale by auction to the public. Since the cars are being auctioned off, and there is no personal or private interest in how much they sell for, the theory is that you can get a real bargain here – the figure of 60-90% off the retail value is often used as a benchmark. In addition, it is believed that very few people know about these auctions, except dealers, who buy cars for sale at low prices to on-sell at high markups.
So what is the truth of this? Can you really save huge amounts of money and get a bargain this way? How do you locate the designated car auctions anyway? What do other people say, who have actually bought a car for themselves, from a government seized or repossessed car auction?
Every day, the government seizes cars, then sells them to recover costs – this is true. These are often called 'repo' cars. These cars may have been the property of criminals who have forfeited their assets after prosecution, and are sent to auction by law enforcement agencies. Or, they may simply be unwanted federal or state vehicles which have been replaced by new models. Members of the public are entitled to bid for these cars. In addition, other types of vehicle are often available this way – trucks, RVs, motorcycles, and ATVs. Bidding will often start at $ 100.
Using various services which put these cars and other vehicles into online databases, you can choose to select cars to bid on which are in your local area, and you can select the model of car you are interested in. These auctions are often held at monthly intervals.
There are some drawbacks to these government closed car auctions. Always check the miles a vehicle has driven – federal and state agencies often have a high figure set, after which the vehicle is sent for auction. When you have found a car you are interested in, you can go to the location and view it. Often however, you will not be able to drive it. There will be little or no warranties or guarantees – this is the reason for the low prices. Also, there will be a lot of competition (from dealers) for the best and newer vehicles. So fix the top price you are willing to pay (in your mind), and do not go beyond that in the exclusion of the auction. Often the slightly older vehicles will be ignored by the dealers, and that is where the bargains are to be found.
There are also many advantages to buying a car this way. Many people will report that they did get a bargain, and their new vehicle runs well. Often due to weather, time of day, or time of year the auction will be poorly attended, and so the competition for even the best vehicles will be limited. In some cases you may be the only bidder. Although you are likely to have noticed a vehicle model that you are interested in using an online service, when attending the auction preview itself you may well see other suitable cars which you could bid on, so it pays to be flexible.
We recommend that you try this method of buying a vehicle. If you have doubts, first attend a government designated car auction simply as an observer , to see how the process works and to get a feel for pricing levels. Then watch the lists, and go for the car you want at the next auction. Good luck!