Wed. Sep 28th, 2022

Many people are struggling to make ends meet, and TV ads with catchy ads tempting you to sell your car for quick cash seem appealing. Your car (next to your house) is probably your most expensive asset, and with that in mind, you may be tempted to sell it, buy a cheaper make or model and pocket the difference.

Car auctions, whether physical or online, can be a great way to sell a car because an experienced auctioneer owns your car and the auction house in the best interests and is therefore safe. You may think these things don’t always go hand in hand, but remember that auction houses will charge a percentage of the purchase price (buyer’s fee) as a commission, so it’s in their interest to get as much of your money as possible!

So, let’s start with the basics:

What is a car auction?

Car auctions have a long history in the auto industry, with many different types of businesses using them to sell excess inventory or buy new inventory for resale.

They are hugely popular in the US and Japan, and are increasingly popular in the UK, where they are no longer seen as dirty places. This is largely due to a concerted effort to change the industry’s reputation and make it more attractive to everyone, not just those “in the industry”.

Car auctions sell cars, commercial vehicles, motorcycles, factory equipment, some of which will also sell large vans and possibly caravans and motor homes.

Auction houses do not own the vehicles they sell. They simply serve as storefronts for many different types of sellers. These can include rental companies, fleet management companies, dealer groups, banks and financial institutions, government agencies, police and, of course, private individuals.

Let’s take a closer look at these different sellers:

Leasing company

Rental companies lease vehicles to companies or private drivers for a period of time (sometimes as short as 1 year), so the vehicles auctioned are usually young models with good mileage, and since the cars are usually leased from new cars, they may have only one person driving at meetings twice a week! When leases or leases end, leasing companies will auction off their old inventory because their customers are more interested in leasing brand new vehicles. These companies are usually owned by banks or financial institutions.

Fleet management company

These are similar to leasing companies in that they lease stock to the organization, but differ in that they will provide an entire fleet for the client and manage that fleet on behalf of the client. Similarly, when fleet leases end, the companies want to use the money in their inventory to replace new models.

Dealer group

If you’ve ever replaced an old car at a large glass dealership or showroom, it’s likely to be auctioned off and sold later. Dealer groups will also bring in old or unsold stock (called excess stock) from their front yards to keep their showrooms fresh and provide the latest products that manufacturers have to offer. Of course, buying a vehicle at auction entered by a dealer group can be more risky than leasing or fleet companies, just like someone replacing their old car, you have to ask yourself why they did it, what kind of place they are, how well did they keep it, how many previous breeders did it have?

Banks and financial institutions

Banks and financial institutions can be grouped with fleet and leasing companies, as many of them have these elements in their respective corporate families and follow the same trends. But banks can also auction cars that have been repossessed by customers after defaulting on loans or mortgages. Clearly, the cars themselves are of little or no interest to the banks, only the value and the money they can make from them.

Government agencies,

The government agency will operate the fleet for its employees and key managers, and will regularly update the fleet and auction off old inventory. Independent government departments will also participate in the auction of a variety of vehicles, from former Defence Land Rovers or staff vehicles, to lawnmowers and diggers for use in local sports fields or local cemeteries! Local authorities can also auction cars that have been seized by bailiffs because they have not paid bills such as council tax (these can be quite high-end models, depending on the local authority concerned).

The police

Police will auction vehicles seized from convicted criminals to compensate victims, dismantle illegal property or recover public funds obtained fraudulently. Police will also auction various other items seized for similar reasons and may hold their own property auctions through the auction house or y. In addition to these lots, all police forces will operate a fleet of undercover or unmarked vehicles, which will need to be constantly updated, and old stock will be auctioned to raise funds.


This is the category of seller we are really interested in. Private sellers can come in and buy a car through an auction, and if their car doesn’t sell the first time, they can tell the auction house to keep putting it in until they receive an acceptable bid. But be aware that the auction house will charge you a fee each time you enter the car, so if you sell the car after a few sales, you may need to check your reserve price or reconsider your options.

How does it work?

Most auctions are based on the same principle. Your potential buyers bid against each other, increasing their bid with each bid until their competitor drops out and becomes the highest bidder. All your bidders will be in the auction hall (although the online element is becoming more and more popular) and all bidding will be done in public. This type of auction is called an “English auction” and the formula applies to most vehicle auctions.

When your vehicle arrives at the auction center, it will be inspected by an auction technician who will highlight any scratches, dents, wear, rust, etc., and assess the overall damage cost. It may be important to consider this when you consider your stock, as trade buyers will have a good idea of the vehicle’s value and damage costs and include it in their bids. The cost of the damage will not be shown to any buyer, purely for the record of the auction house.

Your car will then be photographed and “drawn”, which is the process by which your car goes on sale. It will be assigned a lot number and will be placed at the auction for buyers to view.

At the same time, your vehicle details will be published online for buyers to view before the auction. This is a great way to build interest in your car and most auction houses will send copies of our latest catalogue to their buyers.

You should do your best to ensure that your car comes with all relevant documents and materials that you have:

V5c registration file
Any other manuals (satnav, radio, etc.)
The service manual
A time-honored garage receipt recording details of the work performed
Lock the wheel nut key (if your car has one)
Any other information or items that come with the purchase of a car
All of these things are important to buyers, and if you buy a car, you expect to have everything associated with it, so think about that when you get into your car.

Of course, you must also leave the key and any spare parts at the auction.

At the auction…

When your vehicle lines up to drive into the auction hall, buyers will start looking closely at the vehicle, looking for any damage, and they may open the doors to look inside. Buyers are usually not allowed to test drive the car or look under the hood, so the process of final inspection is important to them.

Once your car is in place in front of the auctioneer, details of the car and any special features, such as extra interior features, alloy wheels, etc., will be read out to the audience. The auctioneer will then start bidding with a starting price below your reserve price. If there is a great deal of interest in your car, the bid may rise quickly with many people competing. Eventually, the auctioneer may reduce the size increase to an amount that the last few bidders feel more comfortable with. This could mean that you see your car increase by £50, rather than the £500 you saw at first. The final highest bidder has now purchased your car, as long as their highest bid exceeds your reserve price. At this point, the buyer has signed a legal contract.

If the final highest bid does not fully meet your reserve price, the auctioneer may classify it as a provisional bid and the auction will then attempt to negotiate between you and the buyer. At this point, you can ask for more money or ask to meet your reserve. If you sell too high and the buyer backs out, the sale will fail. It is a balancing act between what the buyer is prepared to offer and the minimum you are willing to accept.

If you come to an agreement, the sale will proceed as usual.

If no agreement can be reached, you can choose to take your car out of a future auction and keep it, or re-enter in the hope of getting a better bid. Hopefully this won’t happen and you’ll sell your car, but if you must consider this, you should remember that car dealers who attend most weeks will use many auctions, and they’ll be less inclined to offer high prices if they see the same car passing each week. Auctions also charge you every time you enter the car, and some people charge storage fees for a certain amount of time and after the sale, so you should consider these costs when considering how much money you intend to make from the sale.

How much does it cost?

Depending on the size and reputation of the auction house, the cost of entering your car at auction can range from £15 to £30 and will be deducted from the total sales value of the car. If your car is not for sale, you will have to pay this fee every time you enter a sale.

In addition, a commission will be deducted from the sale price. This will be scaled up and will depend on the sale price of the vehicles involved. Before you enter your vehicle, be sure to check with the auction house and shop around your local auction house to get the best price.


Assuming a sale is made or your vehicle is sold immediately, the auction will not provide any vehicle paperwork to the new buyer until full payment is made. Once that happens, the auction passes on all materials related to the car to the buyer.

Most auction companies will also handle legal changes of ownership on your behalf and will communicate the sale and vehicle V5c registration documents to DVLA Swansea on your behalf as you do not know the buyer’s details. Some auctions charge for this service, so please check upon entry.

Car auction companies will usually send you the money for your car very quickly and can do so within a few days of the sale, usually by check or bank transfer. The admission fees and commissions charged at the auction are usually detailed in the remittance notice sent to you after your money has been sent to you.

Other things to consider:

When considering putting your car up for auction, you may want to consider the following things that can increase your chances of getting a sale:

Is the room clean?
Putting crisp bags, drink bottles or cigarette butts in an ashtray isn’t attractive. You wouldn’t ride in one, so why would anyone else?
Do you smoke in the car?
If you smoke in your car, try to eliminate the smell of stale smoke. Smoking in a car can also cause burns on seats, interiors and anywhere else, so be aware of them.
Does your car have a complete or good service history?
Buyers will look at the service history on your car to see how it has been preserved. A good service history usually means that the rest of the car is taken care of. The Prime dealer seal is highly sought after in service history, but your local approved garage will suffice.

Do you still have tax on your car?

Selling a taxed car allows the buyer to drive away on the day of purchase. If there is no tax on your car, their buyers will need to insure it and then sort out the tax before they can drive. Since the auction house will not pass on any vehicle documents to the buyer until full payment is made, this can cause a lot of trouble for the buyer as they have to leave, sort out the insurance, come back and pay for the car, leave and sort out the taxes (now they have the MOT certificate), come back and drive away finally.

Trade buyers who buy a lot of cars don’t worry too much about the hassle factor, because their new cars will be delivered by shipping companies, and for them the main thing is that taxes can increase resale value in their front yards.

When does the MOT run out (or does it even have one?)

Selling your car with an MOT can give your car a boost at auction, because if it doesn’t, the buyer will just see it as an additional expense. Your buyer also needs to have a valid MOT to secure the purchase!

Is there any makeup that can be organized or corrected before you enter?

Can stains on seats or interiors be removed? Do you have replaceable brake light bulbs? Can the sticker on the window be removed?

Is it worth cleaning up the scratches before entering?

Fixing small scratches or dents before you get into a car can increase its chances of being sold, as it won’t be noted on the damage report (as long as it’s a good job!).

Do you have spare keys, satnav disks or old garage bills in the back of your cupboard?

You should use your best efforts to ensure that all items related to your car are auctioned with your vehicle. Things like spare keys add value, and old garage receipts let your buyers know exactly what was done, added, changed or patched to their new car and by whom.

Obviously, if your car has SatNav built in, you should include the disk along with any instruction manuals.

Remember that the auction house will inspect your car and if you feel you can do a good job, our buyer will only sort out scratches or other problems, otherwise it just means someone else has to redo your attempt, which means more cost and time!

This article is for reference only, because all the auction company has different leasing process, cost, customer base and spirit, but I hope this article can let you understand in auto auction to sell cars, vans, trucks, tractors (or any other vehicle) consideration, and if you decide to follow this route, good luck to you!

In my next article, I will discuss how auctions are conducted from the buyer’s side.

By admin

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