Why Are Cars Auctioned? - A Detailed Guide For You

Auto auctions are an age-old practice, with people looking to buy salvage cars or luxury vehicles. But, many don’t understand why this method has become so popular. From collector’s favorites to finding classic cars, the process can be a lucrative and efficient way of getting into the car market—but there are pitfalls as well.

Category: Business     Written By: Eva William

Why Are Cars Auctioned? - A Detailed Guide For You

Let’s take a look at why so many have turned to auctions to buy cars over traditional methods like browsing online or going through a dealership. With insights on potential savings, other benefits, and best practices for navigating auction platforms, this guide will help you decide if it's right for you. So, let’s take a look at a few reasons why cars are auctioned:

To Sell Salvage Cars

Automobiles that have been damaged and branded total losses (or salvage cars) are sometimes sold at a salvage auction to recoup some of the costs associated with the damages. 

There are a variety of salvage auto auctions that are held both online and in-person, offering a range of cars for sale. When bidding on salvage cars, it’s important to understand how the auction works and what types of costs may be present with buying and owning a salvage vehicle.

The cars are usually bought for the value of their parts or by individuals who specialize in repairing salvage vehicles and then reselling them with all necessary repairs and safety checks completed.

As a result, this provides budget-conscious consumers with great deals on nearly-new vehicles. This process also helps reduce the environmental impact of auto production by finding new lives for otherwise unusable automobiles.

To Market Low Mileage Vehicles

For those searching for one-of-a-kind collector's items or cars with minimal miles, auctions provide an exciting opportunity to find the perfect antique or gently used vehicle. Not only is participating in a car auction an effective way to locate these kinds of vehicles, but it can also be fun and fulfilling.

Bidders at an auction get the chance to peruse many different models and assess their options before making a purchase decision, reaping all the benefits of a trip to multiple dealership lots with none of the price markups.

Whether you are looking for a vintage Mustang or seeking an automobile that’s barely been driven off the lot, consider bidding at a public online auction, like A Better Bid (ABB) for an offering of unique vehicles that may otherwise be difficult to track down.

To Liquidate an Estate

Some vehicles are auctioned in the case of estate liquidation. This is a quick, efficient process to efficiently distribute a deceased person's assets. 

This is often done through a bidding system, allowing loyal family and friends the chance to own a piece of the deceased's most beloved possessions. Such auctions may not be available to the general public.

The money raised during the estate car auction invariably goes to the surviving family or to pay off debts left behind, making it possible for loved ones to gain closure on what may be an extremely difficult time.

To Make Divorce Proceedings Easier

When a couple agrees to part ways, the issue of who gets what in the settlement process often arises. It can be particularly tricky when it comes to assets such as vehicles that both parties have a claim to. To avoid costly legal wrangling, some couples choose to auction off their jointly owned automobiles instead. 

This can give an evenly-divided financial return in a way that is expeditious and fair. Additionally, it also avoids potential acrimony between ex-partners over who is taking which car.

Tax Reasons

Auctioning a vehicle can be a favorable option for those looking to obtain the best possible price for their sale or find the perfect ride without overpaying. Buyers and sellers alike should consider the tax benefits that come with an auctioned vehicle.

It is useful to research any applicable laws, as potential savings on taxes could offset any costs of bidding and selling at auction. With careful preparation, buyers and sellers can take advantage of this lucrative process, potentially making the transaction more profitable overall.

Bank Repossessions 

When a loan becomes delinquent and borrowers cannot continue to make payments, banks often turn to repossession in order to recoup their losses. This process begins when the borrower defaults on the loan, allowing the bank to seize the vehicle.

Once taken back into their possession, they make necessary repairs and refurbishments on the car before putting it up. These auctions offer great deals on pre-owned vehicles, as long as the buyer has done their research beforehand. Banks are happy to let go of such cars in return for what can sometimes be a fraction of what was originally allocated.

To Sell Trade-Ins

Car auctions can be a great place to find a great deal on a car as dealerships often have to sell off trade-ins or other vehicles they take in. Depending on the vehicle and its condition, you could snag a high-quality car for just a fraction of its retail value.

For instance, you may find an SUV with all the bells and whistles but low mileage that was taken in as a trade-in—but, since it's an auction, it will likely sell at an extremely attractive price. Just make sure to bring your bargaining skills if you want the best possible deal.

What Is the Best Car Auction?

When it comes to buying a used car, reliability and budget are the two main factors to consider. A Better Bid (ABB) offers a unique way of obtaining a pre-owned automobile, with more than 300,000 vehicles listed daily. They specialize in everything from luxury cars to vehicles with salvage titles, allowing for wider acquisition in all sorts of styles and models.

With over 280 brands and 800+ models available, you're sure to find the perfect vehicle that meets your needs. ABB is committed to delivering affordable cars so that you can choose the exact vehicle that you want—whether it's a BMW with a salvage title or a Chevrolet with good miles.

Wrapping Up

No matter what your reasons are, auctions provide an exciting way to purchase almost any type of vehicle imaginable in a safe, secure, and reliable manner.

With bidding sites becoming more sophisticated and user-friendly every year, you can rest assured that your transactions will be handled with care and diligence.

At ABB’s online auto auction, you can browse through hundreds of listings and place bids from the comfort of your own home. So, why wait? Start browsing their massive selection of vehicles today.