Buying an auction car automatically makes sense for you if you are either:

1. Looking for a project car

2. Willing to take a gamble and land a diamond in the rough

In this article, I’m going to detail out the pros and cons of buying a car on auction.

Pros

The car is going to be cheap. And I mean cheap. Much cheaper than you could find on any classifieds page like Craigslist. Based on tracking 15 different cars on Copart, cars will typically run anywhere from 40-60% off the used book value. That means a $10k car will run you anywhere from $4-6k. That’s a huge savings!

With the right mechanic friend or DIY’ing it and using our Copart car checklist, you can eliminate most of the risk in buying a lemon car and accurately assess your cost of restoration going in. Most of the inspection will need to take place in person, so you will need to find time to check out the car yourself or hire a broker to do so (it’s cheaper and more trustworthy if you go yourself).

Now many of you may think buying a car on auction is going to require a ton of work. And for the most part, you’re right! However, it is possible to get lucky. I bought a 1995 Honda Civic sight-unseen and it ran like a champ. Granted, there was no key ignition cylinder, but it still ran. Unfortunately for this car, I did not follow my own advice and bought this car on accident! I would certainly not count on getting lucky.

Cons

I would really call these tradeoffs rather than cons. There are three points I’d like to make.

Firstly, getting the car in drivable condition will be time consuming. It will not only take mechanical or body work, but also legal work. Be prepared to read through your state laws on getting a salvage titled car back on the road (you can follow our post about it here). Any work on the car needs to be well documented in preparation for the VIN inspection. Don’t forget to keep track of your cost of parts and labor.

Secondly, there is always a risk of landing a lemon. In cases like this, it will most likely be a mechanical problem that emerges down the road. These will usually be issues you won’t be able to check for during the inspection. Rumor has it, shady dealers will use Copart to liquidate cars that have hard-to-detect mechanical issues. There is a risk of being unlucky.

Thirdly, you could run into title issues. When you purchase a car on auction, most of the time (depending on your state) you actually don’t  own the car since the car is not registered to your name. The car is still registered to the previous owner before an accident or even to the company selling the car. In this case, it is possible you will have to go through legal loopholes if the car leaves your possession (the lesson here is to protect your car).

The fourth and last tradeoff is the potential to run into inspection issues. Since you are purchasing a car that is considered totaled, you will need to take it in to your state police inspection facilitate to get it inspected. They go through a thorough process of making sure the car is safe to be on the road and often share the checklist to the public. The inspection typically takes about 30 minutes and cost under $20. It is possible that your car does not pass inspection, in which case you will have to make sure those repairs are done to pass.

Conclusion

It’s important to assess the pros and cons before diving into buying a car on auction. As you can see there are a lot more cons on the list than there are pros. The main takeaway here is to do your due diligence and insure you are protecting yourself from all the cons that are possible. We hope you will carefully assess each area before you decide to bid on a car. Share with us any success stories or recent bids as we’re always here to help.