Doing Your Homework Before The Auto Auction

by Don Elliott on May 8, 2012

Buying cars at an auto auction can be risky business, even if you are a car dealer.

A good friend and owner of a small car dealership called me in my office earlier today. He was at the auto auction, ready to bid on a 2009 Honda CR-V. This dealer has been an active auto auction participant for at least 15 years, a good car dealer and a very savvy car buyer.

He had done his homework on the Honda CR-V. On sale day, he arrived at the auto auction early, in time to do a thorough check of the vehicle. He checked under the hood, in the trunk and under the car. On the test drive, the car drove out fine. As a final step, he took pictures of the car from all angles in case he missed something.

The Honda was just a few cars away from the auto auction block when my friend noticed that an announcement had been posted to vehicle. According to the vehicle history, this particular car had been in an accident. Even this experienced car dealer had not been able to spot any previous damage, confident that he was buying a good car. If a vehicle has undergone quality repairs, there may be no indication of where or even if an accident has taken place. You have to know where to look!

He knew that I was in my office that day, stuck doing paperwork and not enjoying the fun at the auto auction. I got a panicked call from my friend to run a Carfax report on the car. The Carfax vehicle history report confirmed that the car had been in an accident. However, unlike the auction’s vehicle history check, the Carfax report offered more details.

According to the Carfax report, “Accident reported involving right rear impact. It hit a motor vehicle. Right rear primarily damaged. Airbag not deployed.” My friend did check under the rear end of the car and noted that the bumper cover had been replaced and minor damage to the rear quarter panel had been repaired. Everything looked in good shape where the accident had taken place so my friend decided to go through with the car auction bidding process. Of course, this story has a happy ending. My friend was the successful bidder, buying the car for several hundred dollars less than he expected. Without the accident detail from the Carfax report, my friend wouldn’t have been able to properly evaluate the used car value and know how much to bid.

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