If you are planning on purchasing a car at an auto auction, then you may be wondering what your financing options are. While there are a surprisingly large number of similarities between financing a new car from a dealership and purchasing one from an auction, there are also some important differences as well. These differences will not only affect the process of getting financed, but also what your strategy should be at the auction. Here are a few helpful new car financing tips for auto auction buyers, regardless of how much auction experience you have.
Find Out What Your Auction Offers As Soon As Possible
In most cases, the easiest place to start looking for new car financing at an auto auction is the auction house for auction website itself. While not all auction houses offer financing, it is becoming more common for them to team up with local lenders to provide financing the day of the auction. The most important thing to keep in mind is that because you will not be able to get approved before the day of the auction, it is impossible to know exactly what your loan limit would be. Additionally, most of the time these lenders will not offer the best rates. While they still may be reasonable, that doesn’t mean that the best.
A much better strategy is to secure financing before you even show up for the auction. Not every lending institution will lend you money to purchase of car at an auto auction, however a growing number will because using auctions has become a more popular strategy used by average people. This will give you two benefits. First, it will let you know exactly how much you can spend at the auction days or weeks in advance. Second, by looking into new car financing early, you will have time to shop around for the best rates and/or highest limits.
Always Keep Your Maximum Loan Amount in Perspective
One of the best new car financing tips for auto auction buyers is to never focus on the maximum loan amount available. The whole point of attending an auto auction is to get a great deal on a quality car, which means spending as little as possible while still getting what you want. The problem that a lot of people have is that when they have a maximum limit on their loan, they want to spend it all. At an auto auction, the biggest bargains are never on the vehicles which are the most expensive. While you should use your loan amount to dictate what your maximum bid can be, it should not dictate which cars you target.
In order to get the best results at an auto auction, the first thing you need to do is decide what type of vehicle you one. Instead of focusing on a specific make or model, you should look at characteristics which are important to you. This includes things like mileage, age, and additional features. By doing this, you will be able to choose five or 10 cars which would all equally fulfill what you want. Then all you need to do is pay attention at the auction and try to get the best deal possible. Very rarely will you spend your maximum loan amount and truly get a good deal. The goal is showing up to the auction prepared to spend as little as possible.
There are a lot of new car financing tips for auto auction buyers, however they can all boil down to two basic tips. The first is that when securing the loan, doing it as early as possible will ensure that you get the best rates and save the most money because you will have the opportunity to comparison shop. The second is that your maximum loan amount should never dictate how much you are willing to bid on a car at auction. Just because you have the money to spend, that doesn’t mean that every car would be a great deal.
