Car Auction Guide: How Do Car Auctions Work?
You must have heard about people buying extremely good cars at dirt cheap prices from auctions. The prices at which cars are generally sold at auctions makes everyone wonder how exactly auction houses manage to sell vehicles at such cheap prices. There are many different kinds of car auctions, but the most unbelievable ones are those that are held by government agencies because of their extremely low rates. If you are also wondering about how car auctions work, then read on for more information.
A number of government and law enforcement agencies at the local, state and federal level come into possession of a large amount of goods and property as a result of seizures from people and businesses that violate certain laws or rules. Add to this a large amount of unclaimed property and government surpluses and you can easily understand what constitutes auctions held by these agencies. Most of these government agencies do not have the space to store or the personnel to maintain seized goods, as a result of which these goods are auctioned off at regular intervals.
The main agencies that auction off seized or reclaimed cars are the GSA, the IRS, the FBI, DEA, Department of the Treasury, Border Patrol and Homeland Security, to name a few. Apart from these, local and state police departments also regularly auction off seized and repossessed vehicles. On the other hand, auctions are also held by banks and other financial institutions, who generally sell off repossessed property through public auctions.
Auctions held by government agencies, especially law enforcement agencies are considered to be the best ones price wise because the main reason behind these auctions is not to make profit but rather to get rid of surplus seized goods. Over certain periods of time, the police and other law enforcement agencies come into possession of large amounts of seized property. The storage and maintenance cost of this property drains off precious financial resources of these agencies. Therefore, the main motive behind these auctions is not to make money but rather save money that would otherwise need to be spent on storage of seized cars. It is because of this reason that the minimum bid amount at a large number of government auctions is quite low. On the other hand, you might find that auctions selling vehicles repossessed by banks and other financial institutions have prices that are closer to the market value of the vehicle. This is because these institutions try to balance the losses which they have suffered as a result of non payment of loan through these auctions.
You can start looking through local newspapers in order to locate a government car auction near you. Most agencies hold auctions at regular intervals –yearly, bi-annually, quarterly or even monthly. The internet is a great source of information for locating car auctions in your area. You can also contact your local government agencies and ask them about the date and venue of their next auction.