Under the hammer: tips to buy smart
If you are looking for a usedcar bargain, an auction can be a good bet as the prices tend to be much lower than at vehicle dealers. But as the vehicles are sold “voetstoets” (as is), you need to do your homework.
First choose your auction house. Those with reputable track records, for instance Burchmore’s, Aucor and Imperial Auto Auctions, should come highly recommended for this purpose but newer options have surfaced all over the country.
Spread your reach. Bank repo lists, more auction houses and special events are created to host auctions of variety, from commercial, regular to special consignments such as investment or classic cars.
Ensure that you are ready and able to access sufficient funds to cover the cost of bids and auction fees. Most auction houses use cashless systems.
Focus your shopping list of desired cars. It’s a good idea to first attend an auction as an observer. This will enable you to familiarise yourself with the process. You can then also ask the staff to explain any aspect which remains unclear. Another useful tip to remember is to always decide what vehicle you want to buy and what your price range is before you participate.
Ready to bid? Most auction houses charge admin and service fees of about 14% of the final bid price, and also expect to also pay a refundable joining or auction fee. Be aware, the refundable auction fee can be withheld if you incur penalties, of which there are a few. Be mindful VAT is charged on each vehicle sold.
If buying as an individual, expect the following requirements: original ID; utility bill (not be older than three months) with current residential address.
If you will bid on behalf of a company, keep the following info nearby: business proof of residence; business registration documents (CK, CC, Pty); traffic register certificate; letter with proxy and buyer’s details; proxy and buyer’s ID.
If buying as a sole proprietor: utility bill with current residential address; owner’s ID; original letter on a company letterhead confirming the existence of the business as a sole proprietorship; if registered for VAT, Sars letter with VAT number.
The bidding process generally begins a day earlier where bidders are allowed closer inspection of the cars and their condition. However, you aren’t able to test drive the cars. In the end, you are buying voetstoots, so any defects after the sale are for your account. 1. Bring a mechanic to make a technical prognosis. 2. Ask of the availability of the car’s legal documents. 3. Check for roadworthy certificates and expired licence fees. 4. Establish if the car is a rebuild or history of previous accident. 5. Check warranty, maintenance plans and book values. 6. Check for any missing items: spare wheel, tool kit, lock nuts, radios etc.
Remember that auction processes are fairly drawn out. The auctioneer will announce all of the rules of engagement and expectations before the horse trading can begin, so relax, anticipate and pay attention.
To make the day smoother: 1. Be prepared. You are likely to get outbid on your favourite car. 2. Be patient and be careful not to get caught up in the excitement or entering a bidding war without the budget. 3. Do your utmost to stay within or lower than the budgeted fees that cover the car and other administration costs. 4. Theatrics are not needed. The auctioneer will largely spend his/her time enquiring into the crowd: “I have R200,000. Do I see R250,000?” All you need to do as a bidder is to raise your hand if you are willing to pay that amount.
AFTER THE AUCTION
The gavel has cracked and you have secured your vehicle. You are not done. Your car is still within the auction house walls and much still needs to happen before your car is released. There needs to be proof of payment within 48 hours after bid, and the auction house will prepare vehicle paperwork.
This is also where penalties can be incurred. If you skip the compulsory 48-hour payment window you then forfeit the auction fee.
You can snap up a bargain on the auction floor, but make sure you know what you’re getting.