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Automobiles Auctions   >   Articles   >   Types of Vehicle Auctions


Types of Vehicle Auctions

Many vehicles are sold at auctions, and they can - if you are careful about selecting which vehicles to purchase - be a good place to get an affordable vehicle for your own use, or to resell ("flip") at a profit.

In this article, we will discuss some of the different types of vehicle auctions that may be of interest:
  • Online Auctions/Sales:

    There are many websites (including eBay, Craigslist, and many others) were online auctions or sales are conducted, and yes, in many of these websites, it is possible to buy vehicles.

    That said, there are some issues that you might be concerned about if considering purchasing a vehicle online in this way:

    1. Firstly, you will want to make sure you know exactly what you are purchasing for your money.

    2. Secondly, even if you are planning to buy online, you should want to properly inspect the vehicle (and its paperwork), before committing to buying.

    3. Third, you will need to decide whether you feel comfortable with the seller, and are confident that everything is above-board and legitimate, before proceeding with the purchase.

    4. Fourthly, you will need to deal with the issues of transferring money to the seller (and making sure you do actually get the vehicle and proper paperwork), as well as the logistics of getting the vehicle from the seller's location to your location.

    If you feel that you can address all these issues, then there is nothing wrong with purchasing a vehicle online. Of course, one other thing to bear in mind is that sometimes these kind of online auctions can attract a lot of bidders, so you may not get the vehicle at the bargain price that you hoped for.

  • Government Auctions

    State and Federal government agencies often have many surplus used vehicles, that they no longer need, and wish to sell-off or replace. While these vehicles are sometimes high in mileage, they are very well-maintained.

    Additionally, another source of vehicles in government auctions are vehicles that government agencies have obtained through seizure laws. For example, police and sheriff departments, the FBI, the DEA, the Border Patrol, and even the IRS, can obtain vehicles this way. These types of vehicles vary widely in make, model, age, and condition, so it is extra important to properly inspect such vehicles before deciding if you wish to buy one.

    A key thing to realize about government auctions, is that most of the time the government agency wants to get rid of the vehicles quickly, while getting some return on their investment. They aren't usually holding out for the best possible price - because they have no where to store these vehicles, and of course the vehicles are gradually depreciating in value.

    The result of this desire for a quick sale is that most government auctions are what is known as "Absolute Auctions". These are auctions where every single item is sold to the highest bidder, and there are no reserve prices. The consequence of this, is that some vehicles can be sold at truly bargain prices.

  • Insurance Auctions

    Another common source of vehicles for auction is insurance companies.

    Typically what happens is when a vehicle has been an accident, collision, or damaged in some other way, the estimated cost of repairs can exceed the value of the vehicle. In such cases, the vehicle is "totaled" or written-off. The owner is compensated by the insurance company, but the insurance company ends up owning the vehicle.

    What then often happens, is that the insurance company will try and realize some value from the vehicle by selling it auction. And, as with most government auctions, many insurance auctions are "Absolute Auctions" too.

    You may be thinking that why would you want to buy a seriously damaged vehicle that requires expensive repairs to be driveable? The answer is that while some such vehicles are only good for scrap or parts, there may be others where repairs are actually affordable and worthwhile if they can be done more cheaply than the insurance company's estimate.

    One thing to bear in mind if considering buy a car at insurance auctions, is that the vehicle's title may be branded, which could greatly reduce its resale value if you hope to sell it on after making repairs.
Hopefully the above gives you some idea about some common types of vehicle auctions. No you know what they are, you can start looking for vehicle auctions in your area.

Related Links

Here are some related links and websites:
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  • How To Buy Cars At Auctions
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  • Inspect Before You Buy
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