In-Person Car Auctions Vs Private Sales – The Pros and Cons
Buying a pre-owned car is often the best decision in several common situations: you might be on a tight budget, or looking for a particular make/model/year, or just looking for a fun DIY project to sink some spare hours into!
For buyers in Canada and the US, private sales and car auctions are two of the top three options, with dealers being the other one. Depending on your requirements, both are entirely valid choices, each with their notable strengths and weaknesses.
Here we will look at the pros and cons of both modes of purchase so that you can make an informed choice about the option that suits your requirements the best.
Budget is often one of the main reasons why folks opt for a pre-owned or salvage car. In-person car auctions definitely have the edge here, as the prices on average tend to be anywhere between 10-30%, lower than dealerships and private buyers. A majority of buyers at a car auction tend to be dealers and resellers, who add their percentage to the markup down the line.
Private sales tend to have a high degree of uncertainty built into the equation, depending on the type of seller. If they are in a hurry to raise some funds or looking to dispose of a not so old vehicle, you might be able to find some amazing deals. But you could also end up looking at an inflated price if the seller is hellbent on making a profit.
A car auction represents your best chance of finding an attractive deal, regardless of the type of vehicle you are looking for. Be it a second hand or high mileage vehicle in running condition, a theft recovery, a retired rental, something that you can work at in your garage, or just a wreck you can cannibalize for parts, an auction has something for everyone.
The arrival of the internet has widened the horizons of private sales in recent years. But they still lag behind auctions when it comes to offering choice to the buyer. You will probably have to check out multiple listings and drive all over town to look at vehicles to get a glimpse of what you are looking for, which brings us to the next point in this comparison:
If you cannot spare some time off work, auctions can be a real inconvenience as they tend to take place on weekdays. But on the plus side, if you plan ahead by looking at the items on sale in each auction, you can end your search for a car in one day.
That may not be possible when buying in private unless you find a lot of listings close to your neighborhood. But on the plus side, you can check out the cars at weekends or at your convenience (and of course, that of the seller too!)
Whenever registered third parties like dealers and auction houses enter the equation, there is at least some level of protection available to the buyer. These agents/companies are legally required to provide full disclosure when trying to sell any pre-owned or salvage. They also have a reputation to protect, which means there is less chance of shady tactics being employed.
None of that is applicable in the case of a private seller. They could be trying to sell a stolen car for all you know. It is up to the buyer to take all reasonable precautions. There also the issue of your personal safety being at stake, especially if you are dealing with complete strangers in unfamiliar locations!
In-person car auctions can be fun social events where you find other buyers and sellers and indulge in some networking. If you are an auto enthusiast, you could potentially make a lot of useful connections at these events. Plus there is the added thrill of bidding on a car and winning. At Impact, we even provide coffee and donuts.S
Private listings are the exact opposite of that. They can be enjoyable if you are good at haggling, or if you dislike crowded and noisy events. Like many things, it depends on what you are looking for.
The Canadian used car market was worth a shade over $1 billion in 2017, with prices plummeting thanks to a stronger Canadian Dollar. With the loonie values remaining high in 2018, that trend seems to have continued into the new year. In the present market conditions, in-person car auctions should offer even more value for money, with few disadvantages.
Private sales do have some redeeming values, but they cannot compete with car auctions on most counts. But you should keep an eye on the local listings, just in case something interesting does pop up.