How To Avoid Scams In Online Auto Auctions

Online auto auctions are becoming more and more popular with government auctions being the largest source of vehicles put up for sale. Everyday, properties such as automobiles are being seized and confiscated from criminals or people who default on their taxes. And because storage space can be extremely expensive, these seized goods are often sold at ridiculously low prices. Financial institutions may also repossess cars when car owners default on car loan payments.

For those bidding on online auto auctions that feature vehicles sold by individuals instead of government agencies or financial institutes, be sure to check out the experiences of other car buyers from the ratings given for the sellers at the online auto auctions. One trick is to see when the ratings are given. If this seller has been doing the business online for a long time and enjoys positive ratings, it is more assuring for you to bid. Having said that, there is no stopping people from putting up positive ratings and feedbacks about themselves online by using multiple identities so it is still not a full proof method to verify the authenticity of the seller. Best is to buy from government auctions or those organized by banks.

Some online auction scam operations attempt to sell vehicles that have been salvaged in one state to customers in another state. Many auction houses perform no check, or only a cursory check, on a car’s title. To avoid losing money on an online car auction purchase, it is always a good idea to check that the car’s title or vehicle history report is clean. You can do this by getting a history report of the vehicle using CARFAX.

Before bidding on online auto auctions, one should always inspect the vehicle first. You should also set a comfortable budget and stick to it. One way to determine what amount is reasonable is to use the wholesale price of the vehicle minus depreciation and the cost of minor refurbishing works. Lastly, read the fine prints for any hidden costs and warranty issues before finalizing the purchase.