It’s common to buy a car from a dealership or through classifieds sections of local papers but it’s also possible to get a good deal at an auction if you know what to do. While often considered industry events, car auctions can be open to both dealers as well as members of the public and are a good way to land potential bargains.
“Auctions are open for all to attend, and we absolutely want the buying public involved,” says Rudolf Mahoney, head of brand and communications at WesBank. “There definitely are good deals to be had – consumers just need to be keep in mind that a little research needs to be done.”
Warts and all
If you buy a car at an auction you get it ‘voetstoots’. This means that it gets sold as it is, even if that means it comes with a few faults, scratches or dings. You won’t go in completely blind though. At Wesbank’s auction lot in Midrand, for example, auctions are conducted every Thursday but you are allowed to come and inspect cars on offer the day before. Wesbank staff can, where possible, provide detailed point-check reports for the vehicles to assist you in establishing the condition of the vehicle.
“This is the most important part of the process,” says Mahoney. “Here is where buyers can start doing their homework, by visually inspecting the vehicle, asking to see service books, and even bringing a knowledgeable person along to help inspect the basics.”
The costs
If you are interested in participating in an auction, bear in mind that there are costs involved. With regards to Wesbank’s auctions, there’s a R5, 000 security deposit to stump up. It can be paid on the day or as an EFT with immediate clearance.
“This is just to ensure that bidders are serious and don’t bid on vehicles they do not intend to buy,” says Mahoney. “If they do win an auction the R5 000 fee can be put towards the purchase price, or refunded. Buyers who do not bid at all will also be refunded.”
Registering to bid also requires FICA registration. For private bidders, this means supplying proof-of-residence documentation not older than three months, as well as their ID book or card. WesBank’s website has further details on exactly which documents are required for registration for private bidders, dealers, and businesses.
Winning bids for vehicles do not include VAT. The standard 14% value added tax needs to be added to the final bid, to arrive at the full price that will be paid or financed.
A deposit and VAT are not the only costs you may have to pay. There could also be admin charges or commission fees. These fees vary between auction houses, so it’s important to establish the costs beforehand.
“WesBank only charges government-mandated VAT on sale prices, along with an administration fee,” says Mahoney. “As with any vehicle purchase, buyers should be well aware of their budgets and affordability, to determine how much they are willing to bid, once taxes and additional fees are included.”
Paying for the car
If you don’t have cash available to pay for the car, it’s possible to get vehicle finance ahead of the auction. Find out from banks and other reputable lenders if they can pre-approve the finance. Wesbank does have registered finance and insurance representatives present on the day to assist with finance but deals are still subject to your credit score and the finance company’s approval process.
You should also arrange insurance before you purchase your vehicle. Doing so reduces the waiting time for a deal to be finalised, however the entire process should not take longer than five to seven working days. “This wait might seem like a long time, but a little bit of patience can be rewarding,” says Mahoney. “Waiting for the right deal to come along is more important than rushing the entire process.”
Tip: If you need to apply for finance, you can do so through Justmoney.