How to Buy Your First Car at a Car Auction

Car auctions can be a great way to buy a used vehicle at an affordable price. From sports cars to minivans, these events showcase a wide variety of cars at prices that tend to be more affordable than what you might pay at a car dealership. 

Before you head to an auction, it’s important to familiarize yourself with how they work. In this guide we share everything you need to know about car auctions so you can buy your next car at a great price with confidence.

What is a Car Auction?

A car auction is an event where people sell second hand vehicles to the highest bidders. These auctions can be private or public. If you’re looking to buy a car at an affordable price, auctions can be a great alternative to buying from a traditional car dealer. 

Type of Car Auctions

There are three types of car auctions in the U.S, and they are open to anyone who wants to bid on a car: 

Government auctions:

Auctions organized by the U.S. government sell two types of cars:

  • Vehicles used by administrative departments. These include police cars, school buses, state government trucks, and even ambulances.
  • Private vehicles. These include cars that were decommissioned due to traffic violations or crimes.

Keep in mind: Government auctions are popular with companies that sell used cars, taxi fleets, and other automobile companies. This means that there's more competition between bidders.

Public auctions

Public auctions are in-person events where buyers can make bids without a dealer’s license. In general, these types of auctions have a wide variety and quantity of vehicles. The type of cars that are sold at public auctions include: 

  • Seized vehicles
  • Cars that were exchanged by their previous owners
  • Junk vehicles
  • Wholesale lots

Online auctions

A lot of companies hold car auctions online. This is a method that allows people to buy their vehicle online from anywhere in the country.

Some benefits of online auctions are:

  • Convenience. These auctions allow you to save time when you buy cars and avoid crowds. 
  • Lower prices. Generally speaking, online auctions sell cars at more affordable prices than traditional auctions.
  • Less pressure. When you have more options and the ease of browsing online, you can choose a vehicle and make an offer without feeling pressured.  

The disadvantages of an online auction include:

  • Running the risk of buying a car that's in bad condition. When you buy a car at an online auction you can’t inspect the car, and generally there's no way to return it. 
  • More competition. Since anyone in the country can participate in an online auction, you’re competing with a higher number of people, resulting in the price sometimes rising past your expectations.
  • Risk of fraud. There are many online auctioning platforms. If you want to buy your car online, make sure you choose a trustworthy platform.

How Car Auctions Work

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Every auction is different and focuses on different types of vehicles, but the purchasing process is pretty similar across the board. Generally speaking, every auction includes the following steps: 

Auction searches

The first step to buying a car at an auction is finding the best event that suits your needs. A quick online search will help you find the public auctions near you.

If you prefer attending a government auction, check out the General Services Administration (GSA) website and select the type of vehicle that you’d like to buy. This site also includes different items that the government has for sale.

If you’d prefer to buy your vehicle online, make sure you choose a trustworthy site. You can determine if a site is trustworthy by checking their reviews from other clients and ensure that they’re a trustworthy platform. Keep the fees and shipping time in mind when researching online auctioning companies.  


You’ll have to sign up and pay an entry fee before you go to an auction.

Some auctions require proof of payment as a part of their registration process. These requirements help confirm that you have enough money to pay for the car. A few examples of the most common forms of proof of income include: 

  • Bank statements
  • Credit cards
  • Bank loan preapprovals

Compare different vehicles

With so many cars available, the best strategy is to take time checking each car individually to make sure it suits your needs.  Don’t feel pressured to make an offer right away. By avoiding a rushed decision, you can prevent an impulse buy— and potential buyer’s remorse— and focus on buying the car you're looking for instead. 

Thoroughly check the car’s condition

If you go to an in-person auction, make sure you check the entire vehicle before you bid on it. The most important parts of inspecting the car are: 

Keep in mind: You can use the VIN to find any car's record. This will allow you to find out how much damage the car has suffered, if it’s ever been in any accident, or if it’s ever needed any major repairs. 

Bid on your car

Once you finish the previous steps and find a vehicle that interests you, it’s time to make a bid— the amount of money that you’re willing to pay for a car. 

It’s common for vendors to have an auction reserve price for each vehicle. This is the minimum price that the vendor is willing to accept for the car. Based on the initial price, one of two things can happen: 

  1. If no bid exceeds the reserve price, the vendor can decide not to sell the car.
  2. If a buyer offers a bid that’s equal to or higher than the reserve price, the vendor is obligated to accept it.

Keep in mind: We recommend that you check the market price of the vehicle before you bid. You can find this information using the Kelley Blue Book. This will help you figure out if buying the car is worth it or not. 

Negotiate with the owner if the car doesn’t sell 

Did the car that you were interested in not sell? If that’s the case, it’s a great opportunity to negotiate with the vendor directly. When the auction is over, you can ask the auctioneer for the vendor’s information and contact them to make an offer.

Car transfers

Did you win the auction for your desired vehicle? Congratulations! Now it’s time to finalize the sale. At the end of the auction, it’s common to pay 10% of the car price up front. The rest has to be paid within the following 24 hours. 

Once you pay the initial deposit, they’ll initiate the title transfer. This process varies from one state to another. For more information, we recommend contacting your local Department of Motor Vehicles (DMV).

Tips for Buying a Car at an Auction

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Buying a car at an auction can be an exciting and stressful process. We’ll give you a few tips so you can make the best long-term decision for you and your family when buying a car.

Keep in mind that bids can’t be canceled

Bids are irrevocable offers to buy a vehicle. You can offer more money to buy the vehicle, but you can’t lower the price. If the vendor accepts your bid, you’re committing to completing the sale. That’s exactly why a lot of auctions require that buyers show proof of funds before allowing them to sign up to participate in their event.  

Research the available payment methods

Every auction accepts different payment methods. Some accept credit cards or personal checks. Others only accept cashier’s checks or cash payments. Before signing up for an auction, ask which payment types are accepted and prepare accordingly before you go.

Have a specific type of car in mind

Before going to the auction, it’s a good idea to have an idea of which kind of car you want to buy. This will help you find the right car and prevent you from getting distracted by other cars that aren’t what you're looking for.

Some auctions offer a list of cars that are for sale. If you have access to this list you can find more information about the available models and even choose the cars that you’re most interested in buying.

If your budget and means of transportation are flexible, you can consider different types of vehicles. This will give you more purchasing options at the auction.

Bring a mechanic you trust

If you're thinking about buying a car at a public auction, it’s best to bring a mechanic that you trust with you. This person can help you look at the vehicle’s condition and tell you if it’s worth buying.

Bringing someone with you can help rein you in so you don’t bid impulsively. That way you can stay focused on the type of car that you really need and stay within your budget.


If you’re planning your first visit to a car auction, you’ll probably have some questions about the process. Below are a few answers to some frequently asked questions.

Where are car auctions held?

Public auctions take place throughout the United States. With a quick online search, you can find auctions near you and go to them in person.

Online auctions might be a good option if you prefer buying in the comfort of your own home. This form of auction allows you to participate from anywhere in the country. You can arrange for the car to be shipped to you directly with the auction company.

Keep in mind: When you buy a car online, it’s important to take shipping costs into account. This cost is added to your car’s final price.

What are the best car auctions in the U.S.?

The best car auctions depend on your location. Below are  some of the most well-known in the U.S.: 

What do I need to attend a car auction?

There are different types of car auctions. Public auctions are in-person and open to anyone who meets the basic registration requirements. To sign up, you just need to show your ID and proof of income. 

Government auctions and online company auctions are open to the public. All you have to do is create an account profile to sign up for one.

Some in-person auctions are restricted to licensed used car dealers and require showing a dealer’s license to enter.

Ready to Bid?

If you're looking for a great deal, auctions can be an excellent way to buy a secondhand vehicle. In addition to being a great buying experience, they can help you save a lot of money on your car. We hope that this article helps give you the confidence to check out a car auction and find the perfect car for you and your family at a price that everyone will love. Happy bidding!