Auctions are typically associated with property or fine art, however, you can also pick up a good second-hand car at an auction.

The first thing you need to know when buying a car on auction is that it is sold “voetstoots”, which means that you buy the item as is. Unless you take the time to bring any defects to the attention of the seller before you make your bid, any defects you find after you purchase the car are your problem and the seller is not liable in any way. So you need to make sure you do your homework before buying.

You can buy a car via an auction either by way of a closed tender or at an open auction.

Closed tender: You send your offer to the auction house in a sealed envelope. All the sealed offers are then placed in a locked box. At an agreed time on the day of the tender, the box is opened and the car is sold to the highest bidder. The disadvantage of this method of purchase is that you have no idea what the other bids are and you can bid only once.

Open auction: In order to enter the auction, you have to pay a refundable deposit, which differs between auction houses. For example, Burchmore’s requires a deposit of R5 000 per car – in other words, if you plan to bid on two different cars, you will have to present a deposit of R10 000. You can pay via a bank cheque, a credit or debit card, or you can make an EFT (electronic funds transfer). It is worth noting that EFTs can take a few days to reflect in the recipient’s bank account and your EFT must already have reflected in Burchmore’s account by the day of the auction.

If you choose to pay by credit card, Burchmore’s will retain your credit card in a sealed envelope and will only swipe the card for the deposit payment if your bid is successful. After your deposit has been paid, you are issued with a bidding number.

Additional costs

Remember that you also have to pay the following costs at a car auction:

• The handling or documentation fee (also known as the administration fee), which ranges from R1 500 to R2 500.
• The auctioneer’s commission, which can vary from 2% to 10%, depending on the auction house and the type of vehicle.
• VAT of 14%.

If you need to finance the car, it is preferable to have this sorted out beforehand, as you have to pay the full balance within 24 to 48 hours. If you are unable to secure finance, you forfeit the deposit but you are not liable for any other costs. Once you have bought the car, you are responsible for the cost of a roadworthy test and licensing the car.

Darryl Jacobson, the managing director of Burchmore’s, says that after you have calculated what you can afford to spend on a car, you should go to a car dealership to look at the prices of second-hand cars. “This will give you an idea of what car you want to buy and also the retail value of the car. Then approach an auction house to see what is available for auction,” he says.

Before the auction starts, you will be given a guide that lists the trade price of each car being auctioned. This guide can be used to make sure that you don’t pay too much for any of the cars being auctioned. You can arrange to view the cars before the auction, although this may only be possible the day before the auction, depending on the auction house. For example, Aucor is able to give you a list of cars that will go on auction up to a week in advance. Contact the auction house directly to arrange a viewing. Not only will this will give you the opportunity to check the car’s service book, but you will also be able to get into the car, start the engine and examine the car thoroughly. However, you are not allowed to take the car for a test drive.

Documents required

You will need the following documents on the day of the auction:

• Your identity document
• Your driver’s licence
• Proof of address: you can use a utility bill that goes to your physical address and is not older than three months; your TV or DSTV licence; a telephone account or a clothing account statement
• Proof of your deposit

Warranties

You can buy warranties from the auction house, however, if something is wrong with the car, you cannot return it and you will not get a refund. It is best to remove the car from the auction house premises as soon as you can because any damages incurred after the hammer has fallen are for your account.

Checks

When you inspect a car prior to the auction, you should ideally take along a mechanic or someone who is knowledgeable about cars if you are not a car fundi yourself. The Automobile Association (AA) says you should use these guidelines when buying any secondhand car:

1. Examine the engine. Look for oil leaks under the car and any obvious signs of wear and tear. The wiring in the engine bay should be in good condition.
2. The radiator and cooling pipes should be free of leaks. If the engine is cool, open the radiator cap and check the condition of the coolant. This should be a transparent coloured fluid (it may be green, pink or yellow).
3. When you start the engine, listen to how easily the engine starts and if it idles well. Rev the engine slightly and listen for any abnormal noises. Rev the engine with a short, sharp acceleration and check for excessive smoke from the exhaust. Thick smoke is a bad sign.
4. The wear and tear on the carpeting and the rubber of the brake, clutch and accelerator should be consistent with the age of the car.
5. Uneven wearing of the tyres will tell you that the wheels are off balance, the suspension is not aligned or the shock absorbers are worn.
6. Look out for signs that the car has been in an accident. These include mismatched paint on adjacent body panels, unequal gaps between the body panels and obvious signs of over-spraying (look behind the rubber around the doors and windows).