You may have heard a work colleague or friend mention that he or she needs a new car and is planning on visiting a car auction to see if any bargains can be picked up. Car auctions take place in every major town and city across America and have also gained immense popularity across Europe too.

An auto auction will certainly not see a shortage of willing prospectors turning up at car auction hoping to bag a bargain or find a cheap jalopy they might be able to do up and sell at a profit. So, if these auto auctions are so well attended, it means there must be something positive about them, right?

It is true that the cost of a second hand car at an auction is certainly going to be cheaper than buying one from the forecourt of a car dealership or garage. If your budget is severely limited, you will find a car auction is definitely the place to find a potential bargain. Also, knowing that the representatives at car auctions are only going to sell a car which is of the highest quality you know you are not likely to get a vehicle that may break down on you after a few weeks.

But there are a few things you should be wary of when buying a car at an auto auction. Many of the cars that become available at these auctions are there because they have been repossessed by bailiffs from people who could not keep up purchase agreement payments on the car. As a result, it is not uncommon for some of the vehicles to be third, fourth or even fifth-hand cars.

Also a lot of the cars sold at auction will not have any form of warranty or insurance cover to go with it. When you buy a car from a car dealership, a car showroom or forecourt, these formalities are usually taken care of, but this is not so in the case of an auto auction.

It has been known from time to time that some of the cars that make it to auction or in fact stolen or reported to the police as a “hot car” if you are unlucky enough to buy a stolen car at auction, you will have problems selling the vehicle on in the future.

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