Buying a Car at an Auto Auction

Some time back, I bought a car at an auto auction (link) and figured someone else could learn from my experience. Please note that the link is a Saskatchewan auction house and while most points mentioned in the post below should hold anywhere, it is better to explore your local auto auction to see if they offer the same options such as unreserved auctions.

Who Are The Sellers?

  • Private owners who do not want to deal with potential buyers (showing the vehicle, letting them take it for a spin, finalizing the deal – counting dollar bills or waiting for the cheque to clear, etc.).
  • People who need the quick buck while getting exposure to a wide market; of course, they could set a reserve price but if they need the money urgently, they will settle for something less than the reserve they had set.
  • Government of Canada vehicles (available only on the first Saturday of the month) are placed in the unreserved section of the auction.

Who Buys At These Auctions?

  • People like me who look for a cheap deal (or at least think they are getting one).
  • Those who like the convenience of viewing several vehicles at the same time in one location (a dealer of different makes!) with the opportunity to bid on another vehicle  if their first choice goes above their maximum bid.
  • Auto mechanics, who buy vehicles at cheap prices, replace worn out parts, maybe remodel, and then sell for a profit.

The Deal

As with any purchase, it is prudent to do your due diligence before submitting a bid. To facilitate this, the auction house allows the vehicles to be test-driven the day before the auction. The vehicles are parked in their lot with the price posted on them. After selecting a few cars based on the make, look and price, one can get the keys to those cars after showing their driver’s license as proof.

Auto auctions are held on Saturday mornings and one needs to get a bidding ticket after providing personal details (driver’s license is a must) to be able to place bids. I noticed that they have a live web cast for the unreserved auction (government vehicles on the first Saturday of the month) to assist in online bidding.

For those uninitiated about the auction process: the auctioneer announces a start bid and bidders raise their bright yellow bid tickets, which has a number on it, to submit their bid for that price. If the highest bid for a car meets or exceeds the reserve price set by the owner, then the deal is considered closed upon payment. However, if the final bid falls short of the reserve price, then the auction house contacts the owner immediately to check if they would be willing to settle for less. If the owner does not agree to the lower price, then the car is available for auction again the following week. It should be noted that only demand drafts are accepted and payment should be made within one week to get possession of the keys.

Some Points to Ponder

1. Inspection. Go in the day before and test-drive your vehicles of interest before going in to submit a bid. Take a friend or relative who has reasonable knowledge about cars. Looking at the exterior, interior and opening up the hood to inspect parts for obvious wear is fine and taking the car for a spin should alert you to strange noises or performance issues. But, I saw people pressing on the hood (it was closed of course) to test the suspension.  Maybe, they will deduce something from it but I have no clue. If you have an acquaintance who is an auto mechanic, this is the time for him to show off his knowledge and help you.

2. Research. Research prices for those cars you are interested in beforehand at VMR Canada and MSN Canada to arrive at your maximum bid.

3. Set a Price. Decide if you would be willing to go a couple of hundred dollars more if the current high bidder is fifty dollars above your maximum bid. It is as much about emotion as money and it is easy to get caught in the heat of the (bidding) moment. You could research the prices of the vehicles and then set your maximum bid at 15-20% less than the amount that you think the car is worth. This will serve as a margin of safety and help you if the bidding war gets intense.

4. No Warranty. It should be remembered that these vehicles are sold “as is” and there is no warranty whatsoever. Hence, it boils down to one’s level of comfort with such a deal. It is similar to buying privately but here, you will never see the owner to make a guess as to whether the car would have been maintained well.

5. Play it Cool. While buying at a dealer, buyers are advised to avoid showing too much enthusiasm for the car they like; same holds here. Play it cool!

So, if you are on the lookout for a used car, possess reasonable knowledge about automobiles or have a friend/relative who does, then try your local auto auction. You might find a good deal! Or, if you have a few minutes to waste on a Saturday morning (or whenever the auction takes place at your location), then stop by for a new experience. But, be warned that it might get boring after some time if you are not buying!

About the Author: Clark is a twenty-something Saskatchewan resident employed in the manufacturing sector. He repaid around $20,000 in student loans and has been working to build his investment portfolio as a DIY investor (not trader) while nurturing plans to retire early. He loves reading (and using the lessons learned) about personal finance, technology and minimalism.

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Clark works in Saskatchewan and has been working to build his (DIY) investment portfolio, structured for an early retirement. He loves reading (and using the lessons learned) about personal finance, technology and minimalism. You can read his other articles here.
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8 years ago

Well if you buy from Kijiji and local classifieds to begin with an auction isn’t any worse. But that is assuming you are already prepared to identify the lemons.

Personally I bought my car from a dealer who bought it from an auction. It came with the safety certificate AND a warranty for major parts. So far it has a leak, a transmission sensor ($250) that needs to be replaced, and its battery died shortly after I bought it. It’s a nice car for the price, but it is truly a POS. And the warranty is useless.

I have a buddy who bought a Nissan 350z 2003 (8-12k value) for $8k. That was a cool story but I’d be surprised if his car ran smooth without issues.

11 years ago

I think it is always a good idea buying a car at an auto auction if you don’t get carried away from the competition of over bidding your price that you can afford versus the actual current value of the car.


Ed Rempel
11 years ago

Does any one know a flat-fee car finder that they would recommend in the Toronto area?

We have always thought of buying used cars as one of the easiest ways to save thousands of dollars. However, most people hate used car dealerships.

For a few years, we had a retired car dealer that would talk with our clients to find out what they wanted in a car and then get them the best deal – sometimes from an auction, sometimes directly from a leasing company (that only allows dealers in), or sometimes from a dealership.

His reputation is what brought him business and he made the same amount (he charged $1,000), regardless of the price or type of car, so he was motivated to be on our side.

Our clients that worked with him all had a very good experience, saved thousands and were very happy with the car he recommended and found.

Unfortunately, he passed away and we are still looking for a good carfinder to recommend. Does anyone know someone like this that they would recommend in the GTA?


Ed Rempel
11 years ago

A friend of mine worked at the police auction years ago. These are often seized at a crime. At that time, he used to say that you should bid an absolute maximum of $2-3,000 below a used price, to allow for possible repairs.

Often the savings were quite a bit more than that. He saw virtually new luxury vehicles that looked to be in great shape other than the dashboard cut open sell for $5,000 or less.

The police auction does not allow test driving the vehicles – you can just look at them and start them up.

If you have a good mechanic and someone knowledgeable about cars and repair costs, an auction can be a relatively easy way to save thousands.


used tires
11 years ago

I’ve always felt that car auctions are a good way to get decent automobiles as long as you know a little something about it. But if you don’t, it’s best to stay away or take someone with you that knows their stuff when it comes to automobiles.

Till then,


Melanie Samson
11 years ago

Excellent post.

I went to a used car dealer who frequently buys at auction and I told him the kind of car I wanted for what price. He managed to produce exactly what I wanted (in 2005, this was a 2001 Nissan Sentra for under 10k on the road). It was an excellent buy.

11 years ago

Thanks for these tips. We were actually going to head to our next local auction & reading this really helped me. I didn’t know they let you go see the cars the days before to check them out. Thanks a lot!

11 years ago


One note on repo auctions…

It is often the case that the people who were not diligent in keeping up with their payments were also not diligent with maintenance. Go to a repo lot and start pulling dipsticks… you will likely see the blackest motor oil and brownest tranny fluid of your life.

It is also amazing how much interior and body damage some people can do in only a few years of ownership.

Future Money-Bags
11 years ago

I have always wanted to use one of these car auctions or a police auction of stolen or confiscated items, but still have yet to attend one.
This is a decently informative article, its good to broaden the catagories of articles on this site.

Thanks Clark.

11 years ago

Buying a vehicle at a “car auction” is no doubt a risky venture.

I only buy “bank repossessed” or “estate” vehicles from auctions. Then, of course I know that the vehicle was either seized from the owner by the bank for not paying his loan or the vehicle was property of someone who died intestate.

In both cases, they are usually good deals because I know for a fact that the owner is not intentionally trying to get rid of a lemon!!