By: Gov Auctions | 14 February 2013
The Dangers of Overbidding at Car Auctions
Buying a car at auction can be a fantastic way to get a great deal on your next car, but it is important that you are careful not to overbid on a vehicle, as this will lead to a whole host of financial problems for you. So whether you are looking for an ex-government fleet vehicle or a second hand sports car, make sure that you have a solid plan for staying calm and keeping your auction bidding under control. The following looks briefly at a few of the many dangers involved in overbidding at a car auction, so make sure you are controlling yourself when bidding for any auction vehicle.
You Won’t Be Able To Afford Insurance
A big danger of overbidding at a car auction is that it may mean you are unable to afford the cost of insurance, because the more expensive a car you buy the more it will cost to have it insured, and if you have already exceeded your budget by overbidding on the car you aren’t much chance of being able to afford the insurance. So whether you plan on buying your new car from public vehicle auctions or through your local government auction, work out your budget before you go, and keep the cost of car insurance firmly in mind.
You’ll Struggle to Keep up Repayments
If you need to borrow money in order to buy your new car, overbidding can jeopardize your very ownership of it, because unless you can afford to keep up those loan repayments you risk having your car repossessed. So before you go to the auction, establish a budget for your car that is based on repayments that you can afford, and don’t even consider bidding any higher than that, regardless of how great a car may be.
You’ll Lose Money If You Resell It
Overbidding for a car at auction is a very poor move investment-wise, because should you ever want to resell the car at some point in the future you will lose a significant amount of money on the transaction. A good way to protect against this type of overbidding is to do some research before going to auction and find out the market value of those vehicles you are most interested in, because paying more for a vehicle than it is worth will mean you are quite simply throwing your money away.
You’ll Have No Money To Do It Up
While you are sure to find some fantastic vehicles at car auctions, there will almost certainly be a few upgrades you will want to make to your new ride in order to make it perfect, but if you overbid for your car at auction you will most likely be unable to afford to make those changes you want or need to make. So keep any upgrades or additions in mind when you are bidding for a car at auction, because unless you can get a car cheap enough and avoid overbidding, you can say goodbye to any chance of doing it up.