Car Auction Websites: A Guide
How Do Online Car Auctions Work?
Online car auctions became more prominent in the mid 2010s, but they originally began in the early 2000. They were mostly focused on business-to-business sales, where dealerships bought used vehicles and selected them for their inventories. Nowadays, online car auctions are much different, allowing individuals, private buyers, and sellers to participate, sometimes without fees. This rise in the popularity of car auction websites can be attributed to a cultural shift, the rise of new car prices, and the presence of a lot more customer protection laws on the Federal level. This article will be exploring the topic of car auction sites, what the best ones are, and how to get the most out of them.
Dealer-Only vs Public Auctions
The main differentiation between auction websites is who is allowed to participate in them. There are two main types based on the user base: private, dealer-only auction houses, and public auctions. Dealer-only auction houses are more widespread, but are less publicly known simply because they are industry-specific and require a special license to be able to buy or bid on a vehicle. The vehicles on these websites are most often listed by insurance companies, either with a salvage, rebuilt, or clean title. Public auctions are open to both dealers and the public, and allow regular buyers to participate in an auction without the need for a special dealership license. These types of auction houses generally allow the listing of all kinds of vehicles, mobile homes, sports equipment, and more.
Do You Need a License to Buy at a Car Auction?
In general, yes, you’d need a license to buy a car from a dealer-only car auction; however, if it's a public auction, you can participate freely or after paying a safety deposit, which guarantees that you can bid on a vehicle and shows some financial interest in the auction. The reason most auction websites require a dealership license to be able to bid is to keep the transactions primarily wholesale. It helps with legal regulation because it is limited to authorized automotive professionals. As mentioned above, dealer-only car auctions are primarily a business-to-business model, which helps other dealerships or insurance companies to offload a number of vehicles and get a bulk offer.
Best Car Auction Sites for Buyers and Sellers
Bring a Trailer Best for Enthusiast and Classic Cars
Bring a Trailer is one of the leading used-car auction websites and is responsible for the popularity of online car buying and selling. Its model is quite simple; it offers a wide selection of vehicles in different categories, mainly focusing on enthusiast and classic vehicles that would be otherwise difficult to get in a regular dealership. Due to the wide-reaching nature of this business, it has gained popularity and is now one of the most visited and used types of online car auction websites on the market. It has a low upfront cost, an active community, and transparent listing practices, with a note of curated selections that generally show customers the types of vehicles they might be interested in. It is used as a knowledge tool for customers who are looking for a specific type of vehicle, while also giving them free selection and browsing capabilities. There are listings; fees start from $99 for a 7-day auction, with higher service tiers available. The buyer fees are 5% of the winning price for a vehicle. The service does not offer post-auction transportation, and buyers must find their own car shipping service for online car buyers.
Cars & Bids Best for Modern Enthusiast Cars
Cars & Bids is another very popular car auction website created by a popular online personality, Doug DeMuro, whose focus is on cool, hard-to-find enthusiast vehicles built after 1980. The main categories are sports cars, SUVs, work trucks, leisure vehicles, overlanders, and more. The platform focuses on a strong community and frequent reviews of vehicles, with a personalized touch from the founder Doug DeMuro, who personally writes and reviews each type of vehicle, showing some more detailed information about the car's good and bad sides. The platform takes a 5% cut from the sale, with a free publishing policy. There is a built-in car history check that gives more information on the vehicle. The buyer's fees are capped at $450 to $7,500 in rare cases where the sale value of the vehicle exceeds $150,000. The service does not offer car transportation services and requires buyers to arrange their own post-sale transportation.
Copart & IAAI Best for Salvage and Insurance Cars
Copart is by far the most widely recognized car auction website and might be responsible for the popularization of the easy-to-do online car buying process. Both Copart and IAAI are focused on used vehicles, more specifically, regular vehicles that can be bought at a dealership. The vast majority of vehicles sold through these websites are salvage title or totaled vehicles with the possibility to get a rebuild title. Insurance companies love these websites as it makes it easier for them to offload unwanted vehicles at a greater profit. Copart has a larger market cap with more than 200+ active locations in the US, whereas IAAI has a smaller footprint, but still provides amazing access and a big inventory to car buyers and enthusiasts alike. IAAI is known for its transparency and seller visibility, clearly showcasing what sort of seller is listing the vehicle, whether they are an insurance company, dealer, or a private party. IAAI also has a more transparent listing policy, often including a short video showing the state of the engine, with the car running, to give buyers more upfront info on the state of the vehicle.
Manheim & ADESA Best for Dealers
Both Manheim and ADESA are known as the go-to place for used car auctions and dealers. They have a wholesale car auction network that is specifically targeted at licensed dealers. Manheim has a massive inventory and is the largest wholesale network in the US, handling millions of vehicles a year, via physical distribution lanes. It provides detailed reporting through official condition reports done by trained inspectors, which is better than a seller's word. It provides buyer protection through their Digital Buyer Protection, which offers additional transport services. Buyer fees are not disclosed publicly and will generally be based on the vehicle and the auctioneer tier. ADESA has a fleet and leased vehicle focus, specializing in off-lease vehicles, repo car auctions, and corporate vehicle returns. It has both a physical and digital presence across the whole of North America. It offers streamlined tech integration which is specifically designed to optimize the auction house searching process for dealerships, allowing for the movement and large quantities of used vehicles. It is, of course, dealer-only, allowing only dealers to buy vehicles, unless a private seller uses a 3-rd party licensed professional for assistance. To view the registration costs and fees, you need to be an active user; the information is not publicly available.
eBay Motors Best for Everyday Buyers
eBay is the website that popularized online auctions as a concept and made it far more accessible to the general public. In the past 10 years, eBay Motors, as a sister company of eBay, has been gaining popularity and for a good reason. It provides the same robust security system, allowing visitors free access to a wide range of vehicles, vehicle parts, and accessories from all around the U.S. and some parts of the world. It is the ideal place for online car auctions for buyers as it favors detailed information about the seller and the vehicle, and provides a robust security system and the possibility for a refund if the vehicle’s condition does not match the description. It has a very large inventory, including more specialized vehicles, and it is very similar to classic car auction sites in that it provides a choice selection of vehicles based on the search parameters as set by the user. If you are wondering, “Do you need a license to buy at a car auction?”, no, you do not; it's free access to dealers and private buyers and sellers alike. The website allows a Buy It Now option or a bid option. It has user-friendly tools that allow visitors to find everything from a standard vehicle to a rarer, more expensive option.
Best Sites for Classic and Collector Car Auctions (Mecum, Barrett-Jackson, RM Sotheby's, Hemmings)
There are specialized classic car auction sites such as Mecum, Barrett-Jackson, RM Sotheby’s, and Hemmings that specifically target sellers who want to part with classic vehicles in different conditions. Mecum auction focuses on a high volume of vehicles and a wide variety of choices. It features American muscle cars, hot rods, and project vehicles; it is known for its live events all across the U.S. Barrett-Jackson is known for its televised events and live charity sales, focusing primarily on resto-mods, classic and modern collection supercars. It is most widely known for its signature event in Scottsdale, Arizona, which happens annually. RM Sotheby’s is a premier prestige auction house for rare vehicles that are more of an investment than a car. This auction house specializes in vehicles with a historic significance, fine exotic vehicles from Europe, and antiques. Hemmings Auctions is a digital marketplace specifically targeting everyday and usable classic vehicles. It offers some of the lowest buyer fees and hammer prices ranging from $10,000 to $80,000. It is ideal for collectors who are looking for usable and drivable classic cars rather than museum exhibits.
Public, Police, and Impound Car Auctions Explained
Public, Police, and impound car auctions allow anyone to bid on vehicles that have been seized, abandoned, recovered, or towed. These vehicles range in quality and condition and are sold as-is, meaning there’s an inherent risk in these types of auctions. Vehicles come primarily from unclaimed impounds, arrests, traffic violations, crash recoveries, or have been classified as criminal assets and have been subsequently released. Most of the sales for public, police, or impound car sales happen through a digital format, such as an online platform or a specialized auction house; however, some do still happen in-person. There is no warranty for the vehicle as each one is sold as-is. The vehicles can be visually inspected in person on the day of the auction, or via online photos, mileage logs, and run-stat notes. The final price of the sale comes with additional buyer fees, taxes, document charges, and may locations require immediate payment via cash.
How to Choose the Right Car Auction Site
Choosing the right auction site entirely depends on what you are comfortable with, what sort of vehicle you are looking for, and what sort of budget you have in mind. There are generalized auction houses that have a vast selection of choices, but are reserved for licensed dealers, and then there are specialized auction houses that run a specific range of vehicles and garner the respect of collectors and car enthusiasts alike. At the end of the day, it's all about the comfort and the accessibility to vehicles you are interested in. You can go for a more user-friendly option like eBay Motors or Copart, or you can get your hands dirty with a Police or Public Auction.
Tips for Winning a Car Auction Without Overpaying
It always pays back to do some research on a vehicle before bidding, not only on the vehicle itself, by getting the car’s running history, but also on the overall market conditions and the asking rates for similar vehicles. To not overpay, you first need to understand the current market caps on vehicles of this kind if there is a similar option. If you are buying a one-of-a-kind vehicle, chances are you are not as concerned about the price. Get the vehicle inspected, see videos and photos if you can’t access it, and then set yourself a price goal that you cannot go over based on the car’s condition. If there are repairs that need to happen, factor in their cost into the price and keep that rate in mind. Once the auction starts, bid until the car reaches your limit, and if it exceeds it - it's not for you. Even if you are not flipping the car, it has to make financial sense to get it.
Won a Car at Auction Out of State? How to Ship It Home
A lot of auction houses offer and include a car shipping service to a location or a buyer’s address. But a lot of them overcharge for the service, making the entire experience even more expensive than it has to be. Luckily, SGT Auto Transport is here to help, with our door-to-door transport service and specialized online car buyer’s car shipping service that specifically helps ship cars from different states back to your own location. All you have to do is contact us, give us the details for the auction house or the location of the car, give us a timeline, and we’ll arrange the transportation and documentation of the vehicle and get it to you in a reasonable time.
Final Thoughts: Which Car Auction Site Is Right for You?
Participating in an online car auction can be very exciting, especially if you are bidding on a vehicle you really want. To know if an auction house is the right place for you, you need to consider three things: what sort of cars are sold, what sort of condition they are in, and if the auction house guarantees your safety and the state of the car. If so, then you are on track to get a pretty good online car buying experience.
