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Best Way To Buy A Used Car: Not Where You Think

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Forge Your Wealth is meant for education and entertainment and should not be used for financial advice.

In a previous post I have mentioned how it is best to buy a used car when you want a personal vehicle. That was pretty vague information. You can buy a used car almost anywhere and literally from anyone with a car. I do not want to leave you with just the advice to buy a used car. In this post I will explain the best way to buy a used car.

What Is The Best Way To Buy A Used Car?

The best way to buy a used car is at an auction. Auctions are not commonly thought of and many do not know where their nearest auto auction is. Not too surprisingly this method of buying a car is becoming more popular. The vehicles you can buy are surprisingly cheap from a few thousand, even down to a few hundred, and despite rumors, the vehicles are quality.

I know many people are scared of auctions for multitudes of reasons. For instance, many people are nervous around auctions. Many are legit financial worries. Many, if not most, auction vehicles are sold as is and you cannot always check the vehicle before you buy. In addition, people sell some vehicles without a title nor proper identification. This can cause issues because cars with improper certification could have been stolen before they were sold or even have been used as an accessory to a crime. You may lose the vehicle if any of these happen. So although this is an extremely economical method of purchasing a vehicle I need to emphasize a buyer beware warning.

The Risks Should Not Concern You Too Much

There are still many more reasons to use auctions for buying used cars. For one, where do you think most used dealers get their cars? Usually from these auctions. This is probably the closest to buying a car at wholesale price. Also, some auctions allow you to have the vehicle test driven or even checked. They may require a fee to do this, but not every vehicle is a big question mark and most are just small question marks. Furthermore, most vehicles do have some identification, which means you can get the car history to determine if the purchase is worth the risk. Unfortunately, most purchases are as is so most purchases will need to be heavily based off the history report.

Types Of Auctions

Dealer Only Auctions

Sorry folks, but most auctions are much like wholesale, some are only accessible to licensed dealers. Unfortunately, dealer only auctions have most of the previously leased cars so dealers will get the first and best picks. Eh, truth is this has to be the case, otherwise used dealerships would have no business. Do not give up hope though, if you know a licensed dealer they can purchase the car for you, more than likely for a price though so it would not be unlike buying a used car from them.

Online Auctions

Anyone can attend these auctions. To be completely honest you should avoid them. Online auctions are infamous for trading cars that utilize fake of cloned VIN numbers. Furthermore, you may have to travel to get the car or ship the car.

Impound Auctions

Governments hold auctions for impounded vehicles. These cars are usually in good condition. Practically every local government holds one of these. For instance, the Philadelphia Parking Authority near where I live holds an impound auction frequently and list the cars that will be held at auction. I do see this as a good place to go and since they were impounded it is unlikely there will be registration issues. These auctions do make me ask so many questions though. Why was the car impounded? Did the person just get their car impounded because they could not pay for parking? If these people could not pay for parking or reacquiring their car what is the chance they paid for an oil change? These are all legit questions. Definitely go in with a car history report.

Government Fleet Auctions

The government leases and uses cars for 3-5 years. They sell these cars in public auctions. The cars are frequently in good condition since the government keeps them well maintained. This is the closest you can have to buying a previously leased car wholesale. Furthermore, you can save significant money since the vehicles are sold by the government. They are not that interested in making a profit. You can check out the GSA site to find these vehicles.

My parents most frequently purchased their vehicles this way and I do plan to do the same. Their cars have run so well and they never had to pay too much. I do see the irony in buying a car that technically my tax dollars paid for already. Oh well, might as well make sure my tax dollars were put to full use myself.

Final Thoughts

Most people associate auctions with priceless artifacts. But auctions for cars are more useful to the average person. While there are concerns with purchasing auctioned vehicles many of these are concerns similar to buying any other car. However, many people are inexperienced with auctions. If you want to purchase an auctioned car you should attend a few auctions before buying your new car.

Car auctions are one of the most useful tools to save you money. Purchasing your car by auction is an excellent way to forge your wealth.

Author: Papa Foxtrot

Most of my life I was careful with money and learned where I should invest it. I was very lucky to have parents who taught me financial literacy when I was young. Unfortunately, I am very lucky because many people lack the financial literacy I know. The purpose of Forge Your Wealth is to teach people who are just starting out in life how to obtain their wealth or anyone who just realized they may need to learn more to handle their finances. I currently have a PhD in biochemistry, just started a job in industry (will not disclose where exactly for personal and professional reasons) and am currently married to the love of my life. I am one of the lucky few people in America who graduated with no student debts, my wife was not. Over the series of a little over 3 years we paid for our wedding with no debt and paid off her federal student loans.

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