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How to buy a car at auction

Get a bargain on the car you want at vehicle auctions.

Car auctions are a good place to pick up bargain vehicles. You can find used cars from dealerships and finance companies, but there are some key differences to be aware of.

You bid on vehicles against other buyers rather than directly negotiating with the seller, there are no refunds if you change your mind after purchase, and auction cars don’t come with a warranty. It’s important that you thoroughly check the condition of the car before buying.

This guide will take you through what you need to know to buy a car at auction.

Tips to buy a car at auction

  • Check the car’s certifications before buying. Some vehicles might be sold with a warrant of fitness (WoF), while others may not. You should add registration and repairs to the cost of the vehicle for an idea of total expenses.
  • Inspect the vehicle thoroughly. If you don’t know enough about cars to inspect it properly it’ll be worth bringing along someone who does. Cars sold at auction don’t have the same guarantees as those sold in dealerships though you will have some protection under the Consumer Guarantees Act. It is your responsibility to make sure the car is in good condition by having a mechanic check it over.
  • Expect to make a down payment. If you’ve bid successfully you will generally need to make a payment of about 10% or $500 (whichever amount is higher) at the end of the auction.
  • Consider market value before you bid. This will give you a good idea of the vehicle’s price before you buy at auction.
  • Try before you bid. If you’re unfamiliar with car auctions it can help to attend a few first without buying anything. They can be fast paced, so a good understanding of the processes can help you bid smarter.
  • Ask questions. If you have any questions or concerns about a vehicle, raise them before the auction rather than after it commences.
  • Know the competition. It can help to know whether you’re bidding against dealers or the general public. Dealers tend to look for the discounts and usually avoid bidding too high, making it easier to outbid them and get a bargain.

How does the auction process work?

Auction houses access used cars from a variety of sources, such as dealerships, cars repossessed by finance companies and ex-lease cars that are due for replacement. You can find auctions that only deal with specific types of vehicles like classic cars, as well as more general auctions.

Here’s what to expect on auction day:

  • You must register with the auctioneer before the auction commences and you need to provide identification. Bidding is usually done by raising your hand or bidders card in the air.
  • The reserve price is a figure set by the seller before the auction. This is the lowest bid that will be accepted. If no bid reaches the reserve price, the seller can choose not to sell the car, but if a bid is above the reserve price, the seller must accept it.
  • If a car fails to reach the reserve price you can get the seller’s details from the auctioneer to negotiate with them directly.
  • If you have the highest bid at or above the reserve price, you are required to complete the sale.

What car auctions are there?

Here are a few car auction companies to check out, depending on where you live. If you can’t get to an auction in person, you may want to consider the Buy Now option. This means that you can browse the lineup and buy on the spot without having to go through the auction process.

  • Turners. This is New Zealand’s largest car auction company with over 3,000 cars for sale and 1,500 Buy Now cars available at any one time. It has 20 locations nationwide with nine branches in Auckland and 2 in Hamilton. Upcoming car auctions are scheduled three weeks in advance on their website with both live and online auctions. You can bid for cars online by registering for Turners Live. Office opening hours are Monday to Friday, 8am to 6pm and Saturday and Sunday, 9am to 5.30pm.
  • Manheim Auctions. This is an established automotive remarketing company that auctions cars in New Zealand. They have branches in Auckland, Christchurch and Wellington. Cars can be viewed the day before or on the day of the auction. Specific times and dates for auctions depend on the location or you can view the complete list of Upcoming Events on their website. Office opening hours are Monday to Friday, 8am to 5pm.
  • Auto Auctioneers. This is a specialist car auction firm based in Hamilton with premises large enough to stock 400 vehicles. Weekly auctions for all vehicles are held on-site on Wednesdays at 4pm. Office opening hours are Monday to Friday, 8.30am to 5.30 pm, and Saturday 9.30am to 4.30pm.

What should I keep in mind?

You will generally have time to inspect the cars you’re interested in before the auction begins. Check for damage as extensively as you are able to and confirm its warrant of fitness. Most auction houses will let you start a car’s engine before buying, and some will let you take it for a prearranged test drive. Remember, there is no going back after a successful bid so always check the car as thoroughly as possible.

You can also attend car auctions online. These are very similar, and provide information about vehicles such as distance driven, flaws and their history.

What financing options do I have if I buy a car at auction?

To buy a car at auction is often cheaper than getting one elsewhere, but the costs can be unpredictable. You will not only need to pay for the car itself, but also any outstanding warranty and registration.

You have the option of taking out an unsecured personal or car loan, or opting for a financing option direct from the auction house.

If you opt for a standard car loan you may want to consider pre-approval so you know how much you have to spend. Consider the costs of registration and any repairs that may be needed when comparing your options and applying for a loan amount.

How do I inspect the vehicle?

Always give the car a thorough inspection before buying and have a mechanic check it over. The following checklist will make it easier to know what to look for:

  • Check the exterior

  • Look for any signs of a previous accident
  • Check for any rust or corrosion as it may indicate more extensive damage
  • Examine for hail damage, dents and panel irregularities
  • Ensure that the door and boot seals are intact
  • Look for chips or variations in the paint
  • Check the engine exterior for any damage or abnormalities
  • Check the engine oil and radiator coolant
  • Go over the interior

  • Check the condition of upholstery and interior panelling
  • Look for any signs of wear and tear on the seatbelts
  • Find out whether the electronics, including air conditioning, power windows and the audio system, are functional
  • Start the car, if possible

  • Check for functioning of interior lights and all exterior lights
  • See that dials and electronics such as air conditioning and audio are working as expected
  • Listen for unusual engine noises
  • Check the documentation

  • PPSR certificate
  • Transfer of ownership documents
  • Registration papers

Compare used car loans

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Name Product Interest Rate (p.a.) Loan Amount Loan Term Establishment Fee Requirements Table description
Harmoney Car Loan
7.99% - 22.99%
$2,000 - $70,000
3, 5 or 7 years
Simplify Secured Car Loan
8.05% - 12.30%
$5,000 - $500,000
12 - 60 months
$100 - $500
Requirements: NZ citizen/permanent resident, income of at least $500/month.
See how much you could borrow without affecting your credit score.
Gem Secured Car Loan
8.99% - 24.99%
$2,000 - $100,000
12 months to 7 years
Requirements: NZ citizen/permanent resident or hold a valid work visa, employed, earning a stable income.
Secured personal loans with weekly, fortnightly or monthly repayment schedules and no early repayment fees.
MTF Finance Secured Car Loan
11.35% - 23.35%
$2,000 - $500,000
3 to 60 months
Up to $376
Requirements: NZ citizen/permanent resident or have a work visa, have a regular source of income.
Secured car loans from $2,000.
AA Money Car Loan
9.45% – 16.45%
$3,000 - $75,000
12 months - 60 months
Requirements: NZ citizen/permanent resident or visa holder, earn $30,000+ /year (before tax).
Loan approval within an hour.
The Co-operative Bank Unsecured Personal Loan
6.99% - 17.75%
$3,000 - $50,000
6 months - 5 years
Requirements: NZ citizen/permanent resident or have a valid work visa.
Floating-rate, unsecured personal loans from $3,000.
Lending Crowd Secured Car Loan
6.45% - 17.23%
$5,050 - $200,000
3 or 5 years
$350 - $650
Requirements: NZ citizen/permanent resident, have a good credit score.
100% online with no paperwork or early repayment fees.
Nectar Unsecured Car Loan
8.95% - 29.95%
$1,000 - $30,000
6 months - 4 years
Requirements: NZ citizen/permanent resident or have a work visa, income of $400/week (after tax), stable credit history.
Payouts made within one day of approval. Applications 100% online.
CarFinance2U Car Loan
8.95% - 23.95%
$5,000 - No max.
1 - 5 years
Requirements: NZ citizen/permanent resident.
Get pre-approved for your next car in 30 minutes.
Stadium Finance Secured Vehicle Loan
8.95% - 19.95%
$3,000 - $100,000
Up to 60 months
Requirements: NZ citizen/permanent resident, have a disposable income of $300/week.
Secured loans from $3,000 and funds paid within one day of approval.

Picture: Shutterstock

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