In today’s economic tough times, more and more car buyers are looking at police auctions and online auctions for bargains in the used car market.
The huge majority of auction buyers report satisfaction with their cars when contacted 60 days after their purchase, but for some buyers their “good deal” turns into a nightmare.

Smart buyers avoid those nightmares by using technology to guard against unscrupulous sellers and public auction nightmares.

Armed with any sort of mobile browser, iPhone, laptop, etc., buyers can check a car’s history, determine its true market value and avoid making the mistakes that can ruin your chances of having a good auction experience.

With cars being stolen at a rate of one every 25 seconds, anyone considering buying a car at auction is concerned about the problem of buying a stolen car without knowing it and then running into trouble down the road.

There are two main strategies to avoid this problem. The first is to compare the VIN (Vehicle Identification Number) in all three locations where it is found. The numbers should match and they can be found on the driver’s side dashboard, visible from the windshield, under the hood and on the driver’s side door jam.

If you’re buying the car online, you can ask for pictures of the VIN in all three locations. If you’re buying in person, you can easily check these numbers for yourself.

Armed with a verified VIN, smart buyers then use a title search company like AutoCheck to check the history of the car and make sure it has a clear title.

This is particularly important for Police Auction Car Buyers. Smart buyers are aware that police departments aren’t required to have clear title to the cars they impound and later sell at auction. If you’re not careful, you could end up watching your dream deal disappear down the road on the back of a car hauler as the rightful title holder reclaims it. You lose the car and the money you paid for it!

Once you’ve used your laptop or smart phone to go online and get an instant car history report, you will need to assess the car’s condition. This is obviously going to be limited in an online auction, but you can still use the history report to suggest problems with the car and ask the seller for pictures of specific areas of concern.

When evaluating a car in person, you can use the same tricks professional car buyers use to find hidden damage.

•    Look for clamp marks on the frame rails under the car. The clamp marks will be holes or gashes on the frame. They are the result of a damaged vehicle being clamped into place and then stretched on a frame straightening machine. It means the car has been in a serious collision.
•    Check the bolts used to fasten fenders, doors and the trunk lid to see whether the paint is broken or the bolts are turned, which could indicate the bolts were removed for body repairs to the vehicle.
•    Peel back the fabric that lines the trunk and look for welding marks or body filler, which may indicate that repairs were made on the body of the vehicle.
•    Look for indications the car has been repainted. Signs like finding a small inconsistency in color between body parts or finding paint on the molding or gaskets. If you run your finger along the inside of the door edge, the finish should be smooth. If it is rough, that may be caused by overspray from repainting. If you find signs of repainting, ask questions to see if you can determine if the paintwork was for minor scratches and dents or to cover up more serious damage.
•    Listen for engine noise when you test drive (or test start) the vehicle. Major accidents often cause engine damage.
•    Check to see if the doors, the hood, and the trunk lid all close properly. If they don't, or if the edges don’t match well, this could indicate the use of replacement parts due to a major accident.
•    Check to make sure the odometer is working.

After carefully evaluating the condition of the car, smart buyers are turning to technology again to determine the car’s true value.
The Kelley Blue Book, the car industry standard for decades, runs an online service that will give you the value for just about any car you will encounter.

Values are divided into three classes:

Trade-In Value - Trade-in Value is what consumers can expect to receive from a dealer for a trade-in vehicle.
This is pretty much the bottom price you can expect to pay at a well publicized auction. This is the price the professional car buyers you’ll be competing against will be willing to bid up to (but not over) so be wise about this one and compare it to the Private Party Value,

Private Party Value - Private Party Value is what a buyer can expect to pay when buying a used car from a private party. This is the price you can expect to get for a car you’re selling to a private party.

It’s the difference between the Trade-In Value and the Private Party Value that represents a profit for the savvy auction buyer.

Suggested Retail Value - The Kelley Blue Book Suggested Retail Value is representative of dealers' asking prices and is the starting point for negotiation between a consumer and a dealer.

Each of these three values is based on the following vehicle condition definitions:

Excellent

•    Looks new, is in excellent mechanical condition and needs no reconditioning.
•    Never had any paint or body work and is free of rust.
•    Clean title history and will pass a smog and safety inspection.
•    Engine compartment is clean, with no fluid leaks and is free of any wear or visible defects.
•    Complete and verifiable service records.
Less than 5% of all used vehicles fall into this category.
Good

•    Free of any major defects.
•    Clean title history, the paints, body, and interior have only minor (if any) blemishes, and there are no major mechanical problems.
•    Little or no rust on this vehicle.
•    Tires match and have substantial tread wear left.
•    A "good" vehicle will need some reconditioning to be sold at retail.

Most consumer owned vehicles fall into this category.
Fair

•    Some mechanical or cosmetic defects and needs servicing but is still in reasonable running condition.
•    Clean title history, the paint, body and/or interior need work performed by a professional.
•    Tires may need to be replaced.
•    There may be some repairable rust damage.

Poor
•    Severe mechanical and/or cosmetic defects and is in poor running condition.
•    May have problems that cannot be readily fixed such as a damaged frame or a rusted-through body.
•    Branded title (salvage, flood, etc.) or unsubstantiated mileage.

Kelley Blue Book does not attempt to report a value on a "poor" vehicle because the value of these vehicles varies greatly. A vehicle in poor condition may require an independent appraisal to determine its value.

Armed with technology, smart buyers have a clear knowledge of the car’s title, condition, and true market value and they’re using that information to guarantee they get a great deal and avoid becoming one of the horror stories.

“Absolutely! I’m in.”

I was at my sister’s house for dinner and my brother-in-law, Bob, was telling me about a guy he met who buys cars at auctions and sells them privately for a profit and does real well at it. Bob is a good guy and he treats my sister right, so I like him, but truth be told, he’s not the sharpest tool in the shed, so I always take what he says with a grain of salt.

But this was “see the pro in action” stuff and I definitely wanted to see how this all went down.

I met the pro, Steve, the next morning and off we went to the auction yard.

“So do guys get new Corvettes for like five hundred bucks at these auctions – or is that just an urban legend?”

Steve said, “Here’s one of the things you have to understand about any seized car police auction or any other sort of public auction where cars are being sold.

There will be professional car dealers in the crowd.

If they’re letting a new Corvette go for five hundred bucks – and stuff like that does sometime happen – then it’s only because the car has serious problems, most likely with the title, and the doofus spending the five hundred bucks is most likely going to lose the money and the car.”

He explained that one of the things the casual weekend bargain shoppers don’t realize is that the police aren’t required to have clear title to the cars they impound and sell off. It’s up to you, the buyer, to run a vehicle report and make sure the title is clear. Steve uses AutoCheck which he can use from his iPhone.

So we hit the auction lot and Steve goes to work. He immediately passes up any car that is seriously damaged.

“The guys who own body shops will be buying those cars.”

Surprisingly, he also immediately passes up any car that is in obvious excellent condition.

“The creampuffs go to the weekend bargain hunters and they usually end up paying too much.”

“I’m looking for cars that need a little work. Just enough work to scare off the weekenders, but nothing more than I can fix for a couple of hundred bucks and some elbow grease.”

So when he sees something he likes, he first checks the VIN, then does a complete and thorough inspection of the car and determines its “Blue Book Condition.”

“I always carry the latest Kelley Blue Book with me so it’s easy to look up the make, model and year of a car and figure its ‘Trade-In Value.’ That’s the price a dealership would give you for trade-in on this car.”

“Ok, cool.”

He showed me the book on the car we were looking at and I could see that the condition affected the price of the car by thousands of dollars. So understanding condition is a huge deal.

“I try to find cars in ‘Fair’ condition that I can bring up to “Good” condition. Then I sell them for the ‘Private Party Value’ which you can see will usually net a decent profit if everything goes right.”

I could see the numbers in the book that showed he was right.

After going over the car, he would then figure the cost of bringing the car into better condition.

“I always plan to put on new tires. Private Party buyers always like to see new tires.”

His final figure was the Trade-In book value less the cost of repairs. In other words, if the Trade-In Value for the car in “Good” condition was $3,500 and he was looking at a car in “Fair” condition that could be brought up to Good for $300 then his final bid would be $3,200.

“Wait a minute,” I said, “That’s more than the Fair condition value of this car as it is. You’ll be paying more than Kelly Blue Book for this car!”

“You’re right, I will, and that’s why I have a chance against the dealers. I’m counting on them not being willing to pay above book price. But I’ll still make my profit when I sell to a private party.”

“Cool”

So after checking out all the cars and coming up with his final figure for the cars he liked, he opened up his laptop and started checking the particular makes and models against AutoTrader and eBay Motors so he could see the current market conditions for the cars he was considering.

“Sometimes I’ll pay a little more if there is a hot market for a car or a little less if I can see the market is weak.”

As the auction progressed, it turned out that all the cars Steve had been considering went for more than his final figure. So we left without making a purchase.

“You have to be willing to let them go if you’re not going to get a deal that makes sense. This is business, not emotion. There’s always another auction down the road.”

I had a good time and I learned a lot that day.

I learned to always check the title. I even did a Free VIN Check on my own car!

I learned to love the Kelley Blue Book Used Car Guide.