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Money to be Made
Auctions are without a doubt one of one of the very best places to buy second-hand motor vehicles. Part of the reason for this is that you cut out the middle man – the retailer or dealer – and avoid having to pay for their services. Many of the used car that you see for sale in garages and in dealers’ showrooms have been bought at auction. Car auctions are therefore the equivalent of a used car dealer’s ‘wholesale’ stockists. In other words, by choosing to buy from an auction, you eradicate the need for a dealer and keep for yourself the profit that the dealer would have made.
Car auctions have earned a not totally undeserved shady reputation over the years, seen as the dodgy yard under the arches where unscrupulous dealers offloaded the knackers they can’t sell elsewhere. But the good news is that these days the auctioning of cars has become a multi-billion pound business. You’ll be amazed at the facilities and scale of the car auction operations these days. You’ll find car auction lots of major companies who choose to buy and sell their cars through the auction system; many of them exclusively.
By attending car auctions you get access to a unique range of vehicles:
Direct from the manufacturer
Later model vehicles
Cars available from ex-fleet, finance and lease companies
Part-exchange motors from dealers
Budget and family models including MPVs
Specialist marques, Top Car and other prestige motor auctions
Plant and Machinery
Cars and Caravans
If you take the time and trouble to learn how car auctions operate you will also be able to make good purchases as well as learn which items should be steered clear of. You may even decide, having learned all about auctions and having visited them and even bought cars for your own use, to turn your hand to car dealing itself, whether that be on a part-time or a full-time basis. There are some tremendous profits to be made and it can also be an entertaining way to make a living.
Car auctions are certainly not the place to be if you do not know what you are doing. They can be fast, furious and you will have little time to examine a car fully. They are full of traders, most of whom are experienced in the business of assessing the quality of cars quickly and accurately. However, you too should be able to do this in a very short time and will pick up the necessary skills relatively easily.
Perhaps the first thing to learn about car auctions is that at almost every auction there are a great number and variety of cars offered for sale and usually only a handful will suit your particular needs. Your job is to become so knowledgeable about the pros and cons of used cars, that you will be able to judge which cars are worth a closer look and worth bidding for, and those which my be ignored.
If you find that there is nothing available at the auction which is worth a bid, walk away without giving it a second thought. Never go to an auction with a pocketful of cash and expect to drive a car away at the end of the day. If you go to an auction in this frame of mind you may fool yourself into bidding for something that you don’t really want, or you might pay more for a car than it is reasonably worth.
As previously stated, most of the ‘old school’ auctioneers have pretty much gone out of business. If you follow the gauk car auction guide you’ll discover that there’s no longer such thing as a bad auction, only bad buyers. Generally, you are quite safe with the large auction companies such as Merlin, British Car Auctions, Manheim etc (Those listed at gauk Motors) however, the waste-ground set ups are to be avoided.
Look for affiliation to the Society of Motor Auctions (SMA) – a plaque bearing their crest should be displayed on the wall somewhere. Membership of the SMA is the nearest you will ever get at motor auctions to a guarantee of fair play and honesty.
Before going any further when you reach an auction the first thing you should do is check in the conditions of sale to see what the auction house guarantees. For example, if you buy a car and it turns out to be a stolen vehicle or still under a higher purchase agreement, will you get your money back without any problems. If you are in any doubt you can contact the Society of Motor Auctions (SMA), (or equivalent for your country)
At the Auction
At the motor auction there are usually two distinct areas.
There is the pound where cars can be viewed and inspected and an arena, or ring, where you will find the auctioneer and where the bidding and buying takes place. In the vast majority of cases a car will have a lot number on it and this indicates when it is due to go out from the pound and into the ring.
In addition, cars may have tickets on the windscreen which tell you some facts and figures about the car, for example, whether it has an MOT, and how long it lasts, what the car’s mileage is and whether it is genuine, the year of manufacture and, crucially, whether it has been used as a taxi, public service vehicle, etc.
The amount of information displayed and the reliability of that information depends entirely on the respectability of the auction house – that is why it is essential to pick a good one, preferably one that is a member of the SMA. A general rule of thumb is that the more information that is given, the more credible the auction is likely to be. You may also be able to pick up further information from a sheet of photocopied paper or catalogue at the office. In many auctions, it is even necessary to buy the catalogue to gain entrance.
There are two categories of vehicle sold at auction:
Those that are sold as seen
and those that are sold with warranty.
As seen, basically means that you buy the car with all its faults and problems and have no recourse whatsoever, even if it blows up on the journey home. Many auctions will not give warranties to any car over a certain age. In this case, you will not know whether it has any serious problems or not. It is a real gamble to buy a car as seen at auctions and in the vast majority of cases the odds are stacked heavily against you.
Buying a car with warranty means that you only have a limited amount of time after the sale to drive it around and inspect it thoroughly. Usually, this amount of time is limited to one hour. However, check what after the sale means, as it could mean after the fall of the hammer, after the auction ends, or after you have paid your money and bought the car. It varies from auction house to auction house.
Buying a car with a warranty is almost as good as buying a car privately, and you have probably paid much less money for it. If you find a “major” mechanical fault, then you can take the car back and get your money returned. Again, what constitutes the definition of “major” varies from auction to auction, but you must always argue if you think you have a case. It is unlikely to mean, for example, that you are entitled to a full refund if the windscreen wipers don’t work properly or it some of the lights are broken.
They are relatively cheap to fix. It also won’t apply if you find that you don’t like the car having bought it.
Cars generally go into auctions at two levels. Those which have a reserve price and those which are sold with no reserve. Basically, if a car has no reserve price then the highest bidder buys the car on the fall of the hammer, irrespective of whether, from the seller’s perspective, it fetches a good price or a bad one.
While this may sound marvelous to an inexperienced buyer, particularly if they visited an auction on a cold day when hardly anyone turned up, normally no-reserve cars are at the lower end of the market, and in most cases you would be well off to avoid them altogether. If the car has a reserve price then you will usually not be told what it is. It is the auctioneer’s and seller’s secret. It is the price below which the seller is not prepared to let the car go and may prefer to keep it or indeed sell it privately.
If bids go above the reserve price, then the car will be sold to the highest bidder. If bids do not reach reserve, one of two things can happen. Either the auctioneer stops trying to raise the bids and lets the car go back to the pound without selling it, where it may again be offered at the next auction in a few days’ time, or he will sell it “provisionally”.
A provisional sale means that the highest bidder has an opportunity to negotiate, via the telephone in the office with the seller to perhaps agree on a compromise price, somewhere between the bidder’s highest bid and the seller’s reserve price. This is a fairly common occurrence, because most people who offer their cars at auctions prefer to have a reserve price.
Obviously the seller wants to get as much money as possible for their vehicle and people all too often consider their car to be worth more than others are actually prepared to pay for it.
Car Auction Do’s and Don’ts
The most important thing NOT to do at an auction is to buy impulsively. Don’t fall in love with anything and think that this car or that would be fun to drive around in for a while, or you might talk yourself into buying an attractive wreck.
As was mentioned earlier, for every hundred cars offered for sale at an auction, there are only likely to be a handful that fit your criteria.
Don’t buy when you are desperate or time is limited. Plan well ahead. Travel comfortably to your car auction. Always look at cars from a negative point of view in that they are full of faults and that it is your job to find them.
When you are viewing the cars in the pound you may detect slight faults. That is to be expected with anything that has been used. It may just be a slight scratch, a bald tyre, a missing wing mirror or blown exhaust – it really doesn’t detract from the fact that it is still a good car and might go for a good price. It is wise therefore to take a notepad and pencil with you. Write down the lot number for the vehicle and jot down any notes on the car that you must take into consideration when you are judging how much to bid. Also, note any other facts and figures for your quick reference.
Cars and VAT
When making payment for a vehicle bought at auction it is advisable to be aware of the VAT situation. Remember that although VAT is not applicable on the sale of private cars through auction, commercial vans and other vehicles are subject to VAT. Check with the sales officer the VAT status of the vehicle you are interested in before you decide to bid on it. (This is not specific VAT or tax advice – check with the relevant office for the current situation)
Also, on top of the hammer price, you will have to pay a small charge for indemnity insurance. This is an extremely worthwhile fee that assures that you have “good title” to the car. This indemnity normally costs only small percentage of the hammer price.
How to Judge a Car at Auction & Used Car Buyer’s Guide
When you are viewing at an auction, you are much more restricted in the amount of checks or tests that you can carry out on a car. Before performing any of the following tests take a look around the vehicle and get an overall impression of its condition. Assess whether it has been well looked after or badly treated. It doesn’t matter if a car has a high mileage or is very old. If it has been looked after properly it can last for a long, long time to come.
Ask yourself, does the car sit properly or does it tilt to one side or at the back?
The bumpers should be parallel to the ground. If the car is security coded, that is if its registration number is marked on each window, check that the number corresponds to the number on the plates, back and front. If not, then consult the registration document. It could be that a previous owner has kept his/her private plates, but it could also be that it is a stolen car which has had new number plates fitted.
When you visit the auction, bring along a small bag with a few tools and some handy items to help you carry out your checks. The following is a list of the basic items that you should bring with you when you are going to check the car:
a torch for inspecting in and around the engine and underneath the car
a small wire brush
a magnet – particularly important for checking where filler has been used on metal bodied cars
an old handkerchief to kneel on while inspecting the underneath or to wrap around the magnet so that it will not scratch the paintwork and to wipe oil off the dipstick
and, of course, a notebook and a pen for jotting down faults, features and details.
It is always best to try and inspect the car in daylight or in dry weather conditions although this may not always be possible at an auction.
What to Look for
Have a good look around the car to see whether there are any major dents or defects and decide whether they will need urgent attention. Look for body panels which are badly fitted, out of joint or are of a different colour or shade, as this could suggest recent damage. Rust is the first thing that people look for when doing up a car so look out for patches of rust bubbling underneath the paint surface or where it may have already broken through.
Rust generally travels upwards so start your inspection down below and work your way towards the roof. You can replace the entire engine of a car but never the entire body. If rust has taken a good hold then consider it in the same way as one would think of cancer as a terminal disease. Rust at the edges of panels and where little bits may be chipped off is not a major problem as it can be cured by using a rust treatment. If rusts exists in the centre of a panel, in the roof, under all the wheel arches and around the glasswork then it is probably already beyond repair.
Check for rust around light fittings, under the front and back bumpers, around the edges of the boot and door panels, on the tops of the wings, around the aerial, around the wing mirrors, around the wheel arches and basically around the edges of all panels where they join together and anywhere something sticks in or out of the bodywork.
Look at the quality and colour of the paintwork and judge whether it will be easy to touch up – metallic paint is very awkward to repair. Again, any scratches or patches of rust in the middle of panels will be much harder to fix than at the edges. Look at the general finish of the paintwork and see if it is beginning to suffer from the weather. Ask yourself whether the car has recently been re-sprayed. The term used for a bad re-spray is “blown”, which actually describes how the job was done.
Gently press the bodywork in a number of random places which are done to see whether you can hear cracks under the surface or if it feels spongy – this indicates rust.
To judge whether it has been re-sprayed, look under the wheel arches or under the sills for spray paint over dirt, also on the tyres and paint which has run over the rubber mounts or the chrome of the glass is a clear give-away as well. If the car has been sprayed in damp conditions there may be a slight whiteness to areas of the paintwork. Unfortunately, this is under the skin and is impossible to get rid of.
Also, a crater or pock-marked effect, rather like the surface of an orange, means that the paint has been applied too coarsely. This is a clear sign of a cheap and amateurish job which won’t last long. However, don’t jump to the conclusion that if you find one of these tell-tale signs that the whole car has been re-sprayed, as it could just be one section which may have sustained some minor accident damage. These areas will usually appear brighter than the panels surrounding them.
When viewing the overall look of the car, check to see if it is twisted in any way. This could indicate that the car has had a serious crash which could have affected the chassis. Check that all the doors, boot and bonnet fit properly and that they go into their corresponding holes easily and comfortably.
If not, I then they are likely to have been damaged, poorly attended to or replaced altogether. Check the corners of the vehicle for accident damage and repair work as people often misjudge the length and breadth of their vehicles. If you get a chance, open the bonnet and check the inside of the wheel arches and engine cavity for signs of repair work. A car that has had the front or rear damaged in this way will always show-up in this fashion.
Take out your screwdriver or penknife and check under the wheel arches for serious rust damage. This area is hammered by stones and grit, water and ice throughout the year and although most cars are well protected with an underseal, this does not last forever. It only takes one flake to fall off for rust to start developing and eat away the underneath without any protection.
Check that the windscreen has not sustained any cracks or chips which will weaken its strength. This can expensive to fix properly. Many bad jobs result in water leakage from the seal which causes rot in the floor panels.
Under the Bonnet
Now turn your attention to the engine. If you have an opportunity to start the car when it is in the auction pound, by all means do so, if possible making sure you check under the bonnet both before the test, when the engine is cold, and afterwards when it is hot, as many problems can be seen, (such as fuel leaks), immediately after use.
When you open the bonnet, take a good look around and get a general feeling as to its overall condition. There is bound to be some oil around, especially with old cars, but an engine compartment covered in oil suggests there could be an oil leak somewhere which does not bode well.
Also, if it is very dirty, it suggests that the engine has not been looked after very well, this could be a real problem. If there is no dirt anywhere and the engine gleams like a new pin, even though the car has 50,000 miles on its clock, it has most probably been subjected to a steam clean. This can remove much of the evidence that might suggest an oil leak. Pullout the dipstick and inspect it. Check for lots of bubbles in the oil which indicates that the cylinder head gasket has gone or is going.
Check the level, make sure the car is not on a slope or otherwise you will get an inaccurate reading. The level should be somewhere between the maximum and minimum marks. If it is too low then it would suggest that the car has not been looked after and driving a car with not enough, or even too much, oil can damage the engine seriously. While you are checking the level, also check the oil itself.
Oil does not last forever; it should be changed at each major service. In the ideal case, it should be translucent and gold in colour, rather like thin treacle, and dirtier and blacker when used. It should never be in such a condition that you can’t see the dipstick through the oil. Rub a little of the oil between your fingers and see if you can feel any grit. If you can feel grit, this is an extremely bad indication.
When the engine is cold, take off the radiator cap and look at the water. If there is not enough water then it is possible that there may be a leak in the system. Stick your finger down the hole and look for trace of oil in the water by rubbing your fingers together. If it feels slimy you can assume, again, that the cylinder head gasket is going. If your finger comes out white and fluffy then it’s already blown.
A roughly cooling system will turn the water orange and will cause damage to the water pump, the radiator and the radiator matrixes, any alloy casings and the pipe in which it is being carried. Never take the radiators cap off if the engine is hot water in the cooling system is very hot indeed and is under a great deal of pressure.
Next take off the oil filter cap and check if there are any white deposits on the cap itself or the surround, which would suggest water in the engine and a blown cylinder head gasket. Also do this after the test drive and check there is not an exceptional amount of smoke coming out of the hole, which would mean a worn engine.
With the oil filter cap still off, check that oil does not blow-out all over the place when the engines revs a little, which would indicate a defunct or ineffective oil circulation system. Also, put your hand over the hole and check that there is a gentle breeze passing through your fingers. If it blows like a gale, then the piston rings are worn and there is back pressure in the sump. Always make sure that you get a car warm enough to thin the oil. Thick, cold oil covers up a multitude of sins and prevents any noise being made by worn bearings and the like.
Look for new and shiny parts and also note that nothing is missing. There should be at least one fairly brightly coloured object, the oil filter, to be found towards the bottom of the engine on one side. This should be replaced as regularly as the oil. If it is covered in dirt and is rusty then the service has been neglected.
Check that the engine and body numbers have not been erased and that they correspond with the details on the registration document. The numbers are usually to be found on aluminum fastened onto the engine and the body in the engine compartment, where they can be seen easily. At an auction, look and listen when the engine is started before it is driven into the ring. If there is a very loud metallic rattling sound at the start, which may disappear when warm, suspect that the big or small end is going.
But you must be sure where the noise is coming from. If it is in the centre or the bottom of the engine, then it could be either the big or small end, but if it is at the front, for example, in a Ford, it could be a simple to fix design fault such as a worn camshaft or belt. Let the engine just tick over and listen hard. A low rumble from the centre again indicates big end wear. Constant knocks and/or rattles can be attributed to timing change, timing change tensioner, or badly adjusted, loose or worn tappets.
Check the battery. Take off one of the filler caps from the top and check the distilled water level. It should come just above the metallic elements you can see. These days, new batteries are often sealed for life and you don’t have to worry about the levels. Check the terminals for signs of erosion (white, powdery deposits) which will impair its ability to discharge and recharge.
Check the inner body panels for rust and welding work, especially around the tops of the shock absorbers. Take a good look around for any leaks or signs of leaks emanating from any of the fluid pipes, petrol or oil. Check the thicker pipe, water pipes, water leakage and also for rusty orange stains anywhere where these pipes join the engine and radiator, which is a clear give-away of a leak.
A rattling sound from the front end of the engine could mean a worn timing chain or cam belt. A regular knocking noise may indicate that the main crankshaft bearing, water-pump bearing, or alternator bearing is going, or it may have a bent or loose pulley. Finally, with the engine ticking over, observe whether the entire engine complex rocks or bounces excessively. Such movement suggests split or weak engine mounts or that the timing needs attention.
Other areas that should be looked at carefully if you get the opportunity at the auction are the underneath of the vehicle, particularly checking for any bends or crumple in the sub frame, leaking pipes, hoses, drums, damaged petrol tanks and, of course, the exhaust system. Similarly, you should examine the interior of the car. Inspect the seats for wear and tear and also the carpets. This will indicate to you whether the car has been used or abused, and even whether the wear corresponds to the mileage shown.
Take off any seat covers which may have been put there for show or to cover cigarette burns, loose stitching or excessive signs of wear. If you have the opportunity at the auction, check that warning lights come on when you turn on the ignition.
Checking the brakes on the vehicle at an auction can be quite difficult but if you are buying the vehicle under warranty you have one hour after you have paid for it to take it for a short test drive and check the brakes. When on the test drive and at a very slow speed, on a clear bit of road with no other people or cars around, brake carefully with your hand lightly gripping the wheel. If the brakes are in alignment the car should pull up directly in front of you and should not swerve or move to either side.
Here is a well-known way of checking the clutch to see whether it is in good order. Sit in the driver’s seat and start the car. Engage second gear and the handbrake. Rev the car up to about midway and slowly let the clutch out. If the car revs decrease proportionately to your letting the clutch out or the car stalls completely – then it is okay.
If not then it means that the clutch is slipping and is either worn or has oil on it. Either way it will need replacing soon. When you depress the clutch the operation should be smooth and there should be no noise. A whirring noise when depressed indicates wear of the release bearing and will need replacing shortly.
Take the handbrake off and using clutch control, pull away from stationary in second gear, the car should not stall and should accelerate slowly but smoothly.
Check the exhaust by looking, listening and smelling. Listen for a puffing noise emanating from underneath the car indicating a hole in the exhaust system. A low grumbling sound, like a racing car, when a car is being revved suggests the same, or that the exhaust pack has shaken loose.
Look under the car and see if the exhaust is old and rusty, or is any smoke coming out of any other place rather than the hole at the back end. Grab the exhaust (when cold) with your hands and shake it gently, if it feels firm and doesn’t rattle or knock then you know that all the mountings and brackets are there and working properly.
If you experience a smoky or gassy smell in the cabin when the car is running, then exhaust fumes could be finding their way out of a hole and into the interior of the car, which can be very dangerous. Replacing an exhaust is not cheap but obviously costs vary on the type of car and where you get it done. Check the emissions from the exhaust and you can tell a lot about an engine. A good engine, when warm, should not produce any visible smoke though a little is to be expected in an old car, but only when cold. Black or blue smoke indicates piston ring wear; white smoke indicates a blown cylinder head gasket.
If a car blows out smoke when started from cold and the smokes stops after a few revolutions, that suggests worn valve guides which are allowing oil to seep into the cylinders when standing. Start the car and place your hand over the exhaust outlet about six inches away. Leave it there for a few seconds and then look at your palm and smell it. There should be no fluid deposits on your hand, other than perhaps a little water when cold. There should be no oil (suggesting worn out piston rings) and certainly no unburned petrol (which would suggest that a cylinder is not firing properly).
To check the gear box, sit in the driver’s seat and without starting the engine, depress the clutch and check whether the stick goes into all gears easily and smoothly. Start the engine and do the same.
With the engine still running, check that the gear stick does not excessively vibrate, which is a sign of wear. The easiest gear to test is fifth. To test the gear box and synchromesh put the car in reverse and drive backwards a short way. As the car is still moving backwards put the car into first gear. If you find it difficult or it makes a noise, then this suggests a tired and worn synchro which means an expensive gear box change.
Get a Professional Opinion
While there are obviously other areas such as steering, tyres, suspension and shock absorbers that should be tested, one way of doing this is to bring along a trained mechanic with you to the auction.
In many cases, they will have a very good idea of what a car is worth and will be able to assess it fairly quickly. They will also be able from their experience and knowledge to identify any major defects or faults quickly. Many mechanics or trainee mechanics will provide this service to you on a part-time basis for a relatively nominal fee. This is money well worth spending and an outlay of £25-£35 can save you extreme grief later on, and indeed help you buy a better car than you might otherwise have done.
Before driving the car away and no matter how short of cash you may be, never drive it out of the pound if you are in any doubt about the amount of petrol in the tank. Petrol gauges are not known for the accuracy or longevity. Most auction houses will not leave a car full of petrol and many have been known to siphon off petrol from a car with a full tank. If your car runs out of petrol the resulting pressure created by the engine being starved of fuel can cause deposits of rust and other dirt to be sucked up from the petrol tank through the filter into the engine. Always, when you have just bought a car and are driving somewhere, pull into the first petrol station you see and fill it up.
Never, whatever you do, buy a car from outside an auction on the street, even if it is offered to you at a bargain price. Consider that these cars are more than likely stolen and you will lose all of your money to a fraudster.
Never, Ever Get Shafted When Buying a Used Car … What
the Criminals Don’t Want You to Know!
Thousands of people get ripped off every day by unscrupulous traders trying to make a fast buck.