Learning the Language of Auto Auctions

by Don Elliott on July 31, 2012

Buying and selling cars at an auto auction appears at first glance to be a simple process. However, knowing the words and phrases used within the auction industry can save embarrassing and costly mistakes when the auction is over.

Arbitration – A service provided by the auction to resolve any issues that arise after the auction sale. Buyers have a short window of time, often only a few hours, to discover problems with the car they just purchased.

Auction Block – The auctioneer stands on the auction block, the point at which the cars are presented for sale.

Auctioneer – The auctioneer controls the auction sale representing the auction house to bring buyers and sellers together at an acceptable auction sale price. When the auctioneer announces that a car is sold, the buyer must pay the block price plus fees unless it is determined that the seller misrepresented the car.

Bidder Number – Each bidder is assigned a number that is to be prominently displayed during the auction sale. The auctioneer recognizes eligible bidders by bidder number and will announce the winning bidder’s number with the block price after announcing “Sold” to conclude the bidding.

Block Price – The block price is the amount announced by the auctioneer as the final sales price. Auction fees and post-sale expenses are in addition to the block price.

Commission – Also called the buyer’s or seller’s fee or premium, this is the amount paid by an auction buyer and seller to the auction house. Depending on the type of car auction, the commission can run from a minimum ($75-100) to a percentage of the block price (10% or more at collector car auctions).

Curbstoning – This is the practice of buying or selling cars outside of the auction arena. Curbstoners attempt to avoid paying auction fees, a practice that can get you banned from attending any future auctions. Curbstoners are also known to buy and sell cars at retail without a dealer’s license or paying sales tax. Curbstoning is not only frowned upon at auctions, it is illegal in many states.

Lights – At older auctions, different colored lights are lit to indicate conditions that exist regarding the sale. Green light indicates an auction guarantee about the condition of the car. A red light indicates that the car is being sold as is. A yellow light indicates that there is a condition or an announcement on the sale. Other lights colors indicate that the title is not available at the time of the sale, title announcements, or country of origin. At many auctions, the actual lights have gone away, but the terminology still exists.

No Reserve – Cars sold without a minimum sales amount as set by the seller have no reserve. No reserve sales are also called absolute sales.

No Sale – If the bidding does not reach the seller’s reserve or minimum sales amount, the auctioneer does not sell the car by announcing “No sale”.

Reserve – The minimum bid acceptable by the seller. Reserve numbers are protected by the auction house, but available to the auctioneer when accepting bids on the auction block.

Ringman – The auctioneer’s assistant is called the ringman. The ringman works on the auction floor to help spot bids for the auctioneer and to present the features of the car.

Run List – The run list is the order of the sale.

Run Number – Each vehicle receives a number that identifies the auction lane and the order that the cars will pass across the auction block.

Google+ Comments

Previous post:

Next post: