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Buying a car at an auction can be a great way to get a deal. But be careful! You can get burned.

Whenever there is an opportunity for a deal, there is an equal and opposite opportunity for getting into trouble.

Let me give you 3 Cons of Buying a Car at an Auction and give you some tips for staying out of trouble.

1. You Didn’t Mean to Bid? Too Bad.

At an auction, bidding is legally binding. One time, while bidding on a car, I meant to make the signal for a six (thumb in the air) but made the signal for a seven instead (crooked pointer finger).

I paid a thousand extra for that tan Chevy Blazer (yes, I still remember) because of a dumb mistake. Could I beg and plead or yell and scream? I could, but it wouldn’t help. I bought it.

How do you prevent mistakes like this? Glad you asked. That brings me to….

2. Auctions Prey on Your Emotions

Excitement, intensity, nervousness, competitiveness, pride – they are all there at an auction. The entire auction system is set up to get you excited, in a hurry, and primed for mistakes.

At car auctions, you’ll usually have an auctioneer up on the block and another guy, called a ring-man, on the floor with you. Both of them are fast talking, loud, and intense. Having the highest bid is called “winning” and getting outbid is called “losing.” All of these factors, and many others, are meant to contribute to the hype.

To avoid making mistakes, you need to avoid getting caught up in the emotion. Detach yourself from the situation and become an observer. You can control your emotions or your emotions, and the auction, will control you.

3. Hidden Fees and Fine Print

When you sign an auction agreement – read it. The difference between auctions can be significant.

If you buy a car and it has a bad motor, what recourse do you have? What about the 4-wheel drive system? The transmission? This will usually be spelled out in the agreement.

You’ll also find that auctions have a funny way of charging you fees on top of whatever your bid is. It’s tough, but you need to keep a number in your head that you are actually buying the car for.

For example, if the fees are an average of $250 and you are bidding $5,000, you need to remember you are actually bidding $5,250.

Auctions are fun and can be a great way to find a deal. Just remember these words of caution and hopefully you won’t get burned. Happy Bidding!

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