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Car auctions have an allure to them that can be addicting. When a car is placed up for auction to the highest bidder, there is always a buzz, and when there are a couple of bidders engaging in a “war,” there is plenty of adrenaline flowing.
Of course, the fact that auctions can provide actual deals in the used-car market underpins this excitement. And, as long as you register as a bidder with the auction house and can demonstrate that you have sufficient funds to bid on a car or a number of cars, you as a private buyer can compete with all of the traders that traditionally make up an auction crowd.
Due to a client defaulting on payments, the cars in stock at a given auction have often been repossessed by a bank or other financial institution.
In many circumstances, banks will try to assist the client in meeting their obligations, but after a set period of time, the automobile is repossessed, and once the financial records are finalized, the car is auctioned off. Some private sellers, however, put their automobiles up for auction even after they have been paid in full, in the hopes of receiving a rapid cash payout.
Pricing at auctions
The reserve (minimum bid) price for a car at auction is usually determined by comparing it to its current used trade value, as well as other factors such as mileage and overall condition.
These reserve prices, according to experienced auctioneers, tend to be between 10% and 15% below retail trade value, or up to 20% below retail value, for a certain model. The reserve price will be closer to the current trade “book” value of the car the more popular the car is (which tends to be the lower-priced models). This presupposes that the vehicle is in good working order.
The auctioneer’s goal is to ensure that a car not only sells at auction, but also raises as much money as possible for the financial institution to collect the money owed on the vehicle because the previous owner defaulted on the loan.
The reserve price is determined solely by market values and does not include any outstanding debt on the repossessed vehicle.
FICA details, such as a certified copy of your ID certificate and proof of residence in the form of a current utility bill in your name that is no more than three months old, must be provided to the auction house. In addition, most auction houses demand a (refundable) registration fee of between R5000 and R6000 to show that the intention is legitimate. Most auction houses will also want confirmation that you are capable of financing a vehicle you intend to bid on, either through pre-approved financing or a genuine, verified bank statement demonstrating that you have the necessary funds on hand.
When you arrive at the auction (at least one hour before the scheduled start time), you must complete all documentation in order to acquire a valid bidding number.
If you fail to follow through on a successful bid, your deposit will be forfeited.
If you place a winning bid on a car and then fail to pay for it (typically because your auto financing goes through), you will forfeit your R5000 deposit. Your money will be refunded in full if you do not purchase a vehicle at an auction. If you buy a car, the deposit will be deducted from the final price.
The auctioneers take a percentage of the sale price and add VAT to it.
Auctioneers emphasize that buyers should be informed that the auctioneers will receive a 6% commission on the selling price. Furthermore, the top-bid rates do not include the government’s 14 percent VAT. When bidding on an automobile, this should be reflected into the final selling price. After your vehicle passes a roadworthy inspection, you’ll have to pay a license and registration charge of between R2 500 and R3 000.
The auctioneers don’t provide a guarantee on a car.
Any vehicle sold at auction comes with no guarantee from the auction company. Many repossessed cars, on the other hand, still retain a certain amount of warranty and maintenance plan coverage, as guaranteed by the manufacturer at the time of the vehicle’s initial sale.
The auctioneer should record these details on an information sheet attached to each car’s windscreen. A list of flaws, ranging from minor to significant, should also be included.
Any problems detected by the auction houses’ evaluators should also be mentioned on each vehicle in the case of badly-treated autos, and this will, logically, be reflected in a lower-than-usual reserve price on such a vehicle.
Viewing days are held before each auction.
Use the viewing days, which are normally held a day or two before each auction to get a sense of what automobiles are available. If an automobile catches your eye, take note of the VIN number (Vehicle Identification Number) on the license disc and do some research on the car’s history through the dealership where it was purchased.
Before you start bidding, attend a few auctions.
All of the main auction companies advise that private purchasers who are new to the sometimes befuddling world of vehicle auctions attend a few events to get a feel for how they work. This is mostly for the purpose of avoiding the well-known “buyer’s regret” problem.
Bank Repossessed Cars With Prices
Below are the prices of bank repossessed cars
|R 79 000
|R 199 999
|R 110 000
|R 199 999
|R 95 000
|Toyota Siyaya 2.2
|R 85 000
|R 85 000
|R 55 000
|R 95 000
|R 250 000
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