Top 5 Auto Auction Myths Debunked

More and more cars (and buyers) are heading to auto auction lots these days.

Top 5 Auto Auction Myths Debunked

Auto auctions are no longer considered a niche activity aimed at enthusiasts, collectors, and businesses. With the rising costs, buying a used or salvaged car at auction is becoming a very attractive proposition for the average buyer.

Sadly, there are a lot of auto auction myths and misconceptions floating out there. If you have any misgivings about attending a car auction, chances are they are probably based on at least one of these myths.

So let’s clear the air with a deep dive into some of the most common misconceptions folks have about auto auctions: 

1. Auctions only have wrecked or salvage cars

This is a common myth that is only partially rooted in reality. It is a bit like saying that all fruits are apples since all apples are fruits!

Salvage cars and totaled wrecks do eventually end up at auto auctions. But that does not mean that all auto auctions deal only with wrecks and salvage titles.

Auctions with wrecks are usually exclusive events for body shops and parts collectors, not the general public

Used cars from many other sources do in fact end up at auto auctions, including:

  • Cars from police impound lots
  • Vehicles repossessed by banks and lenders
  • Trade-ins
  • Cars from private collections.

Auctions dedicated to wrecks and salvages are usually aimed at body shops or parts collectors, and they advertise this prominently before the auction itself.

Even if you are at an auction with both wrecks and used cars, nobody can fool you into buying a salvage title. The law requires auctions to clearly indicate the status of the vehicle on the bill of sale.

Impact Auto Auctions CTA

2. Auctions are not for beginners or first-time used car buyers

Many people are intimidated by the thought of auctions, often based on what they see in movies and reality TV shows. While some auctions can get highly competitive and intimidating, that is not the norm.

Dealer only auctions are probably the closest to this image. Those often progress at a quick pace, since the buyers are all experts.

But not all auctions are aimed at dealers and enthusiasts. When an auction is open to the public, it stands to reason that having more buyers attend the event would equal more profit.

Bring your gearhead friend along for the inspection to figure the best value deals at an auction lot

This is why auto auction firms have streamlined systems and processes in place to make things easier for beginners and first-time buyers. These days, even online auctions from firms like Impact Auto allow buyers to first check out the vehicles at the lot before bidding.

If you are a beginner, or not too much of an expert on vehicles, you might want to bring along someone to help you pick out a decent vehicle. 

3. The cars are all sold at rock bottom prices

Car auctions are not giveaways! While the prices here are certainly cheaper than those at used car dealerships, that does not mean that they always sell at pennies to the dollar.

Wrecks and totaled cars can be had for a pittance, working vehicles without a salvage title will still command premium reserve price.

The advantage here is that the reserve price will most probably be hundreds or even thousands of dollars when compared to other dealerships.

Just don’t expect to see all cars going at the bottom dollar, and you should be just fine at your first auto auction. Take a good look at the car, and start from a low price that you feel is fair value for it.

This myth is only true if you arrive halfway through the auction! Once the bidding process has started, they cannot allow you to waste time looking at the vehicle. 

4. You don’t get enough time to inspect the vehicle

This is why car auction houses usually have an “open house” of sorts immediately before the auction. If you can arrive early at the lot, you can take your own sweet time to check out the car, preferably in broad daylight.

The worst thing you could possibly do at these auctions is to arrive late and bid on a vehicle that you haven’t had a chance to look at. That is just asking for trouble.

5. Insurers don’t cover for auto auction cars

Again, this is not completely true. You have to be a bit realistic here – if you buy a total wreck or a salvage title, getting comprehensive insurance might be out of the question.

But even for those vehicles, when properly restored, you can get coverage for personal liability as well as property damage.

Collision insurance might be a bridge too far for these cars due to fear of structural damage. This can be mitigated if you take some of these steps:

  • Give the car a full mechanical inspection
  • Spend extra cash for comprehensive repairs
  • Get an insurance agent to do a physical inspection

With these, you might be able to convince the insurance company to increase the coverage.

Anyway, the auto auction myths about car insurance are mostly exaggerated and counterfactual.

Impact Auto Auctions CTA