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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How to Buy a Car at Auction: 6 Steps to Win the Bid

Updated on:
Content was accurate at the time of publication.

Many people assume that auto auctions are for dealers only when, in fact, many of these events are open to the public. Bidding successfully requires doing your due diligence ahead of time and staying strategic on the day of. When done correctly, this method can help you purchase a new car for a steal.

If you want to score a deal on your next vehicle, here’s more info on how to buy cars at auction.

Now that you know more about the different types of car auctions that are available to you, it’s time to take a closer look at how they work.

1. Do your research

Before you can buy a car at auction, you need to find an auction house, either online or in person, and do some digging. Get to know the company’s reputation and the rules and regulations for how it runs its auctions.

Once you’ve found an auction house you’re satisfied with, you can start looking at its vehicle auction inventory. Many companies will list this information in advance of the big day. Do your best to scope out the vehicles that are available for bidding and to decide which ones have piqued your interest.

2. Set a budget

After you’ve compiled a shortlist, it’s a good idea to get a sense of the fair market value and condition of each vehicle you’re considering. Doing so will help inform your budget. You can use industry guides like Kelley Blue Book (KBB) or Edmunds to get a sense of the car’s current value, as well as used car websites (like CarFax) to obtain vehicle history reports.

Remember, many cars at auctions are sold in as-is condition, so the cost of necessary repairs and transporting the vehicle off the lot should also factor into your budgeting.

3. Register for the auction

Next, it’s time to register for the auction. For best results, be sure to do so well in advance of the auction date.

Usually, all that’s required to register is filling out paperwork and putting a credit card on file. The credit card will be used to pay for the necessary registration fee.

4. Inspect the vehicle

On the big day, it’s absolutely crucial to inspect any vehicle that you have on your list. If you’re participating in an online auction, you’ll usually be limited to looking at pictures of the vehicle, so be sure to scan them carefully for any signs of damage.

But, if you’ve chosen the public auction route, you’ll have the chance to examine the vehicle in person. Most auction houses won’t let you do a test drive for liability reasons, but you can perform a visual inspection.

Be sure to look for any rust spots, dents or scratches, check for any cracks in the windshield and examine the tires. Plus, don’t forget to take a look at the car’s interior.

5. Get bidding

Once the inspections are complete, it’s time to start bidding. Every auction house sets its own rules for how bidding works and every auctioneer sets their own pace. Familiarize yourself with both things ahead of time.

Sometimes, it can be smart to submit a low bid shortly after the bidding starts, just to get a sense of how the process works. After that, it’s largely a matter of going with your gut, but be sure to keep your budget at the forefront of your mind, as well.

6. Submit payment and transport the vehicle

If you’re lucky enough to win a bid, the next step is submitting payment and transporting the vehicle off the lot. Most auction houses expect to receive payment immediately, often within 24 hours of the auction itself. So, be sure you have done your research into acceptable payment methods and are prepared to pony up the cash.

From there, you’re responsible for filling out the rest of the paperwork and transporting your new vehicle to its final destination. If the car is in good condition, you can simply drive it away. But, if extensive work is needed, you may need to make other arrangements, like hiring a towing company.

Not every auto auction is created equal. There are three distinct types of car auctions that you should know about.

Public auctions

As the name suggests, public auctions are open to the public, meaning that anyone can attend and bid on cars. If you intend to participate in the auction, you typically have to pay a small registration fee.

You can find public auctions in your area by searching online or contacting local car dealerships for more information.

Online auctions

While public auctions are held in person, online auctions can be accessed by anyone with an internet connection, regardless of where they are located. Like public auctions, you may need to pay a nominal registration fee.

You can find online auctions by searching the Internet or contacting local car dealerships.

Dealer’s auctions

For their part, dealer’s auctions function a bit differently. They generally only allow licensed dealers to participate in the bidding, although some may open certain sections of the auction up for public participation. You can also work with a dealer-bidder, who would submit bids on your behalf, but that service may come with additional fees.

In this case, you will typically need to provide proof of your licensure along with paying a fee during the registration process. Information about these auctions can be found online, through local dealerships or through participating member organizations.


Get an auction license

If you’re serious about buying cars at auctions and want to be able to participate in dealer-only events, you’ll have to get your dealer’s license.

The requirements for this vary by state, but you’ll generally have to establish a car dealership, including maintaining the appropriate paperwork and insurance coverages for it, to become licensed.

Depending on where you live, you may also have to take a dealer education course and/or pass a background check.

Once you meet the requirements, you’ll need to submit an application and likely pay a fee before you can receive your licensure.

If you’re thinking of buying a car at auction, here are some tips to help you succeed:

  • Watch an auction as a spectator first: You don’t always have to bid when you go to an auction. Consider participating in one or two as a spectator first. Doing so will help you learn the ropes without having to worry about putting your hard-earned money on the line.
  • Bring a mechanically inclined friend with you: Two pairs of eyes are often better than one. If you have a friend in the auto industry, don’t hesitate to bring them to the auction with you. This may be especially helpful while you are inspecting vehicles.
  • Stick to your predetermined budget: During bidding, it’s easy to get caught up in the rush and agree to overspend. But, there’s not a lot of room for forgiveness when you buy a car with cash, so make sure to adhere as closely to your budget as possible.
  • Don’t be afraid to walk away: You don’t have to buy something at every auction you attend. If the bidding gets too high on your chosen vehicle or you don’t see anything that catches your eye, it’s okay to put your paddle down and walk away. You may find better options at the next auction.