Tips on Auto Auctions

"Luxury cars for under $1,000….Mercedes-Benz, BMW, Ferrari, Jaguar….Purchase all these for literally pennies on the dollar!…Your government is practically giving these luxury goods away."

The ads are enticing, whether you spot them in local newspapers, view them in an infomercial or come across them on the Internet. And, for many people who are looking to purchase a car, advertised auctions appeal to their desire to avoid price negotiations or comparison shopping among dealerships.

Before even setting foot at the auction, some consumers fall victim to fraudulent marketing of auto auction guides. They are led to believe that, for a $50 or $100 fee, they will receive a priceless guide listing hundreds of auctions and the secret key to saving thousands of dollars. If they do in fact receive the promised guide, it is typically filled with only general information about auto auctions and their addresses and phone numbers. This information is available free or at low cost from the federal government!

Before responding to an ad promising the inside scoop to government auctions for automobiles or any other property, the Better Business Bureau advises consumers to:

  • Check with the federal government first.

  • Look for information about upcoming sales in the classified or business sections of national or local newspapers or in notices at post offices, town halls and other local and federal government buildings.

If you do decide to purchase your next vehicle at a government auction, the BBB advises the following:

  • Stories about exotic cars sold for little or nothing are pure fiction! As the U.S. General Services Administration advises: "There are no giveaways…GSA expects to receive a fair market price, and every item has an undisclosed minimum price."

  • The cars are not new and their condition may vary.

  • The government does not provide any form of financing. Check with the government agency beforehand for acceptable forms of payment.

  • There are no guarantees. The federal government does not guarantee the condition of its sale items, and is not responsible for any problems that may be identified after the sale.

Become familiar with the common types of auction sales (sealed bid, auction, spot bid and fixed-price sales) and know which method will be used by the government agency that is auctioning the vehicles you are interested in.