Monday, 10 July 2017

Car auctions explained

When it comes to selling a car, most people head down the usual routes: part exchange on a new vehicle, private sale on AutoTrader or eBay, or the likes of webuyanycar(for a fair bit less than it's worth).com. You could even try Motorway, which pulls together a comparison from several sources. But there is another option: car auctions. These aren't just for traders to pick up stock; many auctions allow Joe Public to come and bid for cars too. Now if this is all new to you, it may well seem like a daunting experience, but it needn't be. In this post we will take a look at the ins and outs of car auctions...

Why opt to sell at auction?

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Auctions are a great way to reach a larger number of potential purchasers, which means it can be one of the best ways to get a fair price on it. Not only could you get more for your car than if you traded it in at a dealership, but you then have more bargaining power to get a discount on your new car. Of course, there’s a possibility that the final selling price could end up slightly lower than what you could have got in a private sale, but there is the potential upside; especially if a bidding war emerges. Whether or not an auction is the way to go can depend largely on the model, condition and desireability of the car you're selling.

How much will it cost me?

The commission rate for the auction will vary from place to place, and also on what you are selling. A typical entry fee would cost around £100, plus a commission of 5% (excluding VAT) of the final sale price. So for example, selling a car for a hammer price of £15,000, you will take home £14,000 (being £15,000 less 5% commission [£750 + VAT = £900] less £100 listing fee). Be aware that you may need to consider costs of getting your car in the best shape to go to auction, although most cars are generally 'sold as seen'.

Can I protect myself from low prices?

This is a common concern for inexperienced auction users. When you speak to the auctioneer, and they have seen pictures and details of the car you are selling, they will generally offer an estimate as to how much they think the car will sell for. If you want to protect yourself from selling for less than this price, then you can set a reserve price. If the bidding on your car doesn’t reach or break this price, then the car won’t be sold. That's not to say that you couldn't offer` to meet the highest bidder in the middle, but the key is that you are under no obligation to sell if the reserve is not met. You would still have to pay the listing fee however.

If you were curious about selling your car at auction, I hope this post offers some clarity on the matter. Why not find a local auctioneer and check one out for yourself. But above all, don't be afraid of considering it as a way to sell your car: it could be the best decision you make!


** This is a collaborative post

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