Good And Bad Deals In Car Auctions

Car auctions have equal share between good and bad deals. First time buyer may call it luck to have this good deal, but some who are more experienced at car auctions, are likely to wait some good chance. Here are the pros and cons of buying at an auto auction.

PROS

People with limited budgets and who want to buy a car find that there are a lot of choices in car auctions as compared with conventional car distributors and dealers.

Car auction always give lot of choices for people with limited budgets to buy a car, as compared with conventional car distributors and dealers.

For regular cars sold at auctions, buyers could secure reliable if not the best cars at very cheap prices. At car auctions, even the best and most popular models are being sold with an added perk- they come at lower prices.

There are available auctions where vintage cars are featured for car collectors. This may be a good opportunity to get some of the best cars without having to go through negotiations with owners who are unwilling to sell their vintage cars. Also, car auctions present great opportunities for buying really old cars without having to pay premium prices for the "vintage tag".

CONS

Cars at auctions are sold at normally lower prices because the items are second-hand autos repossessed by the mortgagors or the federal government. A lot of cars at auction are not in mint condition, most of them even have mechanical flaws. Some cars that are being auctioned are "hot" cars, meaning these may be smuggled or stolen. Chances are you'll have problems regarding the car's ownership.

Those car sold at auction usually do not have insurance coverage or warranties, unlike autos being sold at regular distributors and dealers.

Different car buyers have different opinions on whether it is good or bad to buy a car at an auction.

An Effective Fundraising Tool

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Charity auction are largely used as a tool to raise funds for a cause effectively. This auction works the same as other types of auctions. The main difference is that this auction is a non-profit event and the proceeds of all the items that are sold goes to a common cause.

There are two types of auctions used on a fundraising event: Silent auction and regular auction.

Silent auctions are set up by a table or a display where all the auction goods will be shown for people to bid on. A minimum bid may or may not be set. Participants can write the amount of their bid together with their name on a piece of paper is located near the items. At the end of the auction, the bid is calculated and the person who casts the highest bid wins the item. Bids can be kept privately throughout the auction or can be displayed through a bidding sheet. In a 'private silent auction', all the previous bids are not revealed in public. The good thing about 'private silent auction' is that, it keeps the bidders clueless on other bids. On a 'displayed-bid silent auction' a sheet of paper reveals all the previous bids made by other people. This will let bidders to watch a particular item or items they like and place higher bids, to write down the amount higher than the previous bid, or to write down the highest bid before the auction closes.

A regular auction on the other hand requires an auctioneer who will call the price from people who raise their hands or numbers to bid. A regular auction takes advantage of impulse buying as bidders only have a few seconds to outbid each other. If the auctioneer is good and the competition is present, items can be sold higher that their original value.

Both silent auction and regular auction effectively yield a good result, when executed properly.

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Form of Auctions

English Auction: This auction is used at English auction houses like Phillips, Sotheby's, and Christie's. The process starts when the auctioneer announces the item and the minimum bid. Individuals openly try to outbid each other. The item is sold when the 'buy-out' price is reached or when there is no other person willing to place a higher bid. The 'buy-out' price is a pre-determined amount that is set by the seller. This is also known as a reserve price. This is the lowest amount at which the seller is willing to sell the item. This gives the seller the right to refuse the sale if the final bid does not reach the reserve price.

One variant of the English auction is the silent auction wherein people can write down their bids together with their name on a piece of paper. At the end of the auction, the bids will be calculated and the highest bidder wins the item.

Dutch Auction: In this auction, the auctioneer begins by announcing the highest asking price. The amount is then lowered until someone is willing to buy the item. The bidder pays for the last announced price. This auction is convenient if the seller wants to sell the goods quickly since the process requires just a single bid to get a sale.

Chinese Auction: This combine an auction and a raffle. The bidders are not the ones who will call the price. Instead, the bidders will buy a ticker or tickets and place them inside the "hat" from which the winners will be drawn for a specific item. The bidders can buy as much tickets as they want to increase their chances of winning. The term is more likely to come from "chance auction".

Sealed auction: In this Auction, bidder place their bids in an envelope, usually in an envelope.The one bid the highest wins the item. A similar version, called the second-price sealed auction is the auction where the highest bidder wins but pays the price of the second highest bid.

All-pay Auction: In this Auction , all the bidders have to pay for the amount they bid regardless of whether they win or not. The one bid the highest wins the item.

How to Decide How much to Bid

Buying at an auction is often a much faster and easier way to own a property. However, as fast and as easy things may appear, there are jobs that need to be done; including setting the highest amount you are willing to pay for the property.

Here's how to decide how much to bid...

First, once you see the property you are interested in, call the auction house and arrange the viewing. This way, you will be able to decide according to the present condition of the property. Initial impression will give you a good idea (a personal estimate), how much you are willing to pay for the property.

Then, consult your mortgage lender and tell them about the property. They will not lend you money unless a survey or an appraisal is conducted. Know how much you can afford to borrow from your lender

Third, know its market value through an appraisal. This may not give you the exact amount you are looking for but property valuation will give you an idea on how much you should really pay for the property.

Also factor in the deposit you can afford. Usually, the least amount that the auction house accepts as down payment for the property is 10% of the final sale.

Compute the possible repair cost. Properties that are sold at auctions often come from repossession, foreclosure and bankruptcy. So it is likely that they may not be very well-maintained. And to make it livable, you need to do some repairs or renovation. Hire a professional do an estimate on the cost of the repairs. Include the cost of repairs on the highest amount of your bid.

Take into consideration several fees including survey fee, valuation fees, mortgage indemnity guarantees, arrangement fees, solicitor's fees, mortgage broker fees, lender fees, stamp duties, moving cost, auction registration fees, insurance, auction house commissions, and the cost of selling your previous home.

Once you have the figures from every detail you need including the price of the property, the cost of repair, and the extra expenses necessary to buy the house, you should be able to identify the highest amount you should pay for the property.

Basically, determining how much you should pay for a property at an auction is similar to setting your budget when you buy property from an agent. The difference is, the price is not definite and will depend on other participants at the auction.

Failure at the Auction

Winning something at an auction is not just about toppling all your opponents and emerging as the highest bidder. It's also about bidding wisely and making the most out of every cent you pay. Sadly, not all bidders make correct decisions and fail miserably due to their own negligence. The reasons? Read on :

Bidding without planning. The auction process is a bit tricky and confusing so come prepared. Identify the auction goods you want to buy by looking at auction brochures provided before the auction date. Do some research on the items you are interested in. Know their current market value and set your budget. Not only will it set your priorities straight, it also gives you better chances of bringing home the items you really need.

Buying an item blindfolded. The point is, when you are trying to buy at an auction make sure that you have carefully inspected the particular item you are interested in.

Going to an auction with a vague goal. People go to an auction hoping to bring home something for a bargain. But if you ask some of these people what item they want to buy, they might just say "I have no idea" or "I just bid on everything and hope to win something". Have a good idea on what's on sale and prepare for it.

Wrong perception on how the auction process goes. An auction house can become a battle ground and participants can transform into warriors fighting to win something. Bidding is about strategy; knowing how and when to bid is essential. Do not engage in a bidding war if you are not prepared. Remember: even if you win an item, the final price is what matters.

Emotions can run pretty high during the sale especially if two or more individuals battle over one item. Do not get carried away with the intensity of the moment or else, planning and strategizing will just become useless.

What You REALLY Need to Know about Auto Auction

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You are likely to buy a car `in its present condition`, if you are planning to buy a car at an auction. If one day you find out on the car that you have bought has some certain defects, like mechanical problem, you cannot claim for the expenses you will make for the repairs, unless the contract still give you a special condition or manufacturer warranty. You have to consider some extra money to repair or replace some parts, after the final price of the car you win. It is better for you to come early at the auction to inspect the car and check about carfax history report, by submitting year, model of the car, VIN number, mileage. You may ask the auction house if they allow you to test drive the car.

Besides that, you can have some research about the current market value of the car you are looking for. You have to set up the maximum amount of money you will bid included all repair cost thay may come later. For example, the current market value of the car is $ 3,000 and the possible repair cost is at about $700, bid at the maximum of $3,000 minus the repair cost, minus the extra fee you have to pay at the end of the bidding.

Don't forget to bring a car mechanic to inspect the car that you are interested in, so he can give you the perfect appraisal of the car.

Things happen very quickly in a car auction so be attentive. A car can be sold within 30 seconds. Again, stay within your budget. You should not pay more than the actual market value of the car.

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Types of Government Auctions

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Government auctions sell almost all types of items and properties- from earrings to multi-million dollar properties. It is easy to understand that government auctions come in many types. Each of which differ in the manner of how the government obtained the items or the properties and the manner of disposal the government uses to sold off the properties to the public while getting a profit in return.

Here are some of the types of government auctions:

GOVERNMENT SURPLUS AUCTIONS

Also known as the GSA Auctions or Govdeals Auctions, is the type where the Government sells goods that they are no longer need.. Common items found in GSA auctions are automobiles, jewelry and office equipment. Sometime you can also find surplus buildings, real estate and properties.

SEIZED PROPERTY AUCTIONS

Mostly selling confiscated properties, seized property auctions sell properties and items that were foreclosed by the government or taken from the original owners due to tax, financial and other related issues. However, seized properties may also come from confiscations from illegal activities like drug dealing or smuggling.

Seized property auctions could also come from tax seizures. The government seized the house if the owner fails to pay his taxes, mortgages and bills. Custom seizure auction, another type of seized properties auction, sells goods that could come from: a) smugglers, b) people who were not able to present enough and detailed information of the merchandise, and c) people who came from other countries bringing along with them unauthorized merchandise.

Government auctions offers you some of the best pieces of items at a very low price. Find the best deals from government auction by researching the schedules of government auctions.

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