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CityPress - - Business -

he 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, so you need to make sure you do your home­work.

Un­less you take the time to bring any de­fects to the at­ten­tion of the seller be­fore you make a bid, any de­fects you find af­ter you buy the car will be your prob­lem and the seller will not be li­able in any way.

You can buy 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 sold to the high­est bid­der. The disad­van­tage of this method is that you have no idea what the other bids are and you can only bid once.

OPEN 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. For ex­am­ple, if you plan to bid on two dif­fer­ent cars, you will have to present a de­posit of R10 000.

You can pay with a cheque, credit or debit card, or you can make an elec­tronic funds trans­fer (EFT). It is worth not­ing that EFTs can some­times take a few days to re­flect in the re­cip­i­ent’s bank ac­count and your EFT must be re­flected in Burch­more’s ac­count on the day of the auc­tion. Most auc­tion houses have ac­counts with all the ma­jor banks to ac­com­mo­date this.

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

The han­dling or doc­u­men­ta­tion fee. This is 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 type of ve­hi­cle.

VAT, cur­rently at 14%. If you need to fi­nance the car, it is prefer­able to have this pre­ar­ranged be­cause you have to pay the 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 costs of a road­wor­thi­ness test and li­cens­ing the car.

Darryl Jacobson, the man­ag­ing di­rec­tor of Burch­more’s, says 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,” he says.

Be­fore the auc­tion starts, you will be given a guide that lists the trade price of each car that is be­ing auc­tioned.

This guide can be used to make sure that you do not pay too much for any of the cars on auc­tion. You can ar­range to view the cars be­fore the auc­tion, although this may only be pos­si­ble on 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. This will give you the op­por­tu­nity to check the car’s ser­vice book.

You will also be able to get into the car, start the en­gine and ex­am­ine the car thor­oughly, but will not be al­lowed to take the car for a test drive.

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