Buying a car at auction – is it worthwhile?
Let’s be honest. Buying a near new car can be daunting. Having to spend an entire Saturday traipsing around a dozen dealerships and then coming back even more confused than before is no-one's idea of fun. This is perhaps why car auctions are becoming increasingly popular.
In recent times, the prices of classic cars sold at auction have been substantially higher than the reserve, but when buying used cars that are practically new, it can be quite the opposite. This was evident with a 2011 Ferrari 458 at a recent Manheim auction in Melbourne – even though it was passed in at $340,000, this car five years ago would have cost $527,000 brand new.
With the likes of Manheim, every quarter there is a prestige auction with over 80 cars on offer. For dealers who are non-franchise or independent, auctions are the perfect opportunity to regularly buy these kind of cars quickly, and make some money. However, for the general public it’s different, according to Adrian Blackwell, General Manager of PCV (passenger and commercial vehicles) at Manheim.
“Less than 40 per cent of the people that come to an auction, buy on that day. They want to look at the process first and understand it," he said.
Attending an auction is not only an adrenalin-pumping experience for buyers, but can also be exciting for onlookers.
“The average value of each prestige car is $60,000 to $70,000 and then we throw in a couple of $300,000 cars that really gets the juices and the competitive nature flowing," Blackwell said.
If you have a budget in mind but don’t know what type of car to get, attending an auction can give you the chance to browse a variety of top-class vehicles all in one place. Not only can it be convenient, it also can be a pleasant experience, says Blackwell.
“It’s a fully transparent process that you can have a comfort level that what you’re buying is quality and you get the service and the back up that comes with buying at auction.”
We have to mention though, reading the fine print is a must. There will be buyers' fees and, depending on the company, it can be capped or a percentage of the purchase.
Plus, apart from seeing the engine start, what you see is what you get – there is no test driving. Some cars on offer will still be covered by the manufacturer's warranty, but you will not be covered buying a car at auction unless you purchase the optional warranty.
Why not go and check out a car auction and decide for yourself whether it's for you? Whatever you do though, if you get an itchy nose during bidding, don’t scratch it.
Sponsored by Manheim
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