How to buy a vehicle at auction
If you’re hunting for a great deal on a set of wheels, a vehicle auction can be a goldmine, but only if you know how to play the game. Buying a car, even at a reduced price, is still a major financial decision. So, before you bid, make sure you understand the risks, the process, and how to protect yourself from costly surprises.
Are action vehicles really worth it?
Cars sold at auctions usually come from two places:
1. Banks or financial institutions
These vehicles have been repossessed after owners defaulted on payments. Because the bank wants to recover the outstanding balance quickly, you might score a car below retail value. However, you might not be able to test-drive the car and you can only take it at face value. Therefore, it’s in your best interests to do your homework before you place a bid.
Did you know? Standard Bank has partnered with trusted auction houses to bring you a range of affordable vehicles.
2. Private sellers
Some owners choose auctions to get multiple bidders in the room at once and speed up a sale. Prices can rise quickly, but you may still find great value.
Before bidding, make sure you’ve done your homework:
- Check the market value. Is the starting bid realistic?
- Review condition and mileage. Is there a service history?
- Assess potential faults. If something looks off, how much will repairs cost?
- Check for warranties or service plans. These can save you money long term.
How vehicle auctions work
Understanding the process of buying a vehicle at an auction will help you be better prepared and improve your chances of making a successful bid on a worthwhile purchase.
Step 1: Find a vehicle
- Make sure the dealer is reputable and the vehicle meets your criteria.
Step 2: Register
- Provide the required documents (ID, proof of residence and bank statements to show affordability) and necessary auction house paperwork.
- Pay the registration fee, which is refundable if your bid was unsuccessful or if you didn’t bid.
Step 3: Get a bidding number
- Once you’ve registered and paid, you’ll receive a bidding number to take part in the auction.
- Be sure before you bid on a vehicle. The deal is sealed when the hammer falls. It’s best to have a budget in mind and stick to it.
Step 4: Have the cash sorted
- Ensure you have the necessary financing or cash. Depending on the type of vehicle and the price, you can apply for a personal loan or vehicle financing.
- Use one of our calculators to see how much you qualify for, and the repayment terms you can expect.
Step 5: Read the fine print
- Understand all the terms and conditions.
- Check that licensing, registration and roadworthiness are up to date.
- Factor in VAT, buyer’s commission and other costs.
Top tips before you bid
- Auction houses usually hold viewing days before each auction.
- If there’s a car you’re interested in, take note of the vehicle identification number (VIN) and research the car’s history.
- It’s worth taking someone along, such as an experienced mechanic or someone who has knowledge about cars, to fully inspect the car. Remember, you buy the vehicle as is.
- Attending a few auctions as an observer will help you familiarise yourself with the process and possibly prevent you from getting carried away and suffering from buyer’s remorse later.
Disclaimer: This article is provided for general information and educational purposes only and does not constitute financial, investment, tax, legal, or other professional advice. Readers are encouraged to consult with a qualified financial advisor to obtain advice tailored to their individual circumstances before making any financial decisions.
Standard Bank, its subsidiaries or holding company, or any subsidiary of the holding company and all of its subsidiaries make no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information provided in this article or that it is free from errors or omissions.
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