How to buy a car on auction without being taken for a ride

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There is good news for those who are feeling the financial pinch, but still need to purchase a reliable and affordable vehicle.

And that is that vehicles that have been repossessed for public auction, can currently be secured at discounts of up to 78% — and these discounts may even expand further in the near future.

Quoting industry experts, Business Insider has said this week that while there may be great discounts currently available for bargain hunters at repossession auctions, repossessed vehicles do however present risks — including that a buyer may end up with a dud.  

At the outset, the first way to ensure the best possible deal when purchasing a repossessed vehicle, is to try and select or make a bid for a vehicle which is still under a warranty or which still has a valid motor plan in place.

Why auctions are delivering great bargains right now

As a result of the financial devastation brought on by the COVID-19 pandemic, the country’s major financial institutions, primarily banks, are expected to initiate the repossession of a significant number of vehicles in the coming months — with these vehicles destined for auctions as the bank attempt to recover their revenue.  

Those who want to take advantage of the glut of vehicles expected to appear on auction should consider the following tips in order to ensure that they can make the most sound purchase decision possible — whether with or without a major discount.

Tips to make best auction purchase decision

Ask about motor plans and warranties

Purchasing a vehicle which is still under the manufacturer’s warranty or still has a valid comprehensive motor plan will give the buyer important protection and allow for problems with the purchased vehicle to be addressed.

Typical vehicle warranties in South Africa cover three years use or 100 000km in distance travelled. Equally typically, that warranty applies to whichever comes first, the time period or distance travelled. Irrespective of whether the vehicle has been repossessed, the owner will be protected against most mechanical or electrical component failures.  

This would also apply should — during a pre-auction inspection of the vehicle — a major problem goes undetected. The warranty or comprehensive motor plan could cover it and prevent significant additional repair costs.

Know the value of a vehicle before you purchase it

Know what the car you want to bid on is worth. This would be based on the brand of vehicle, the specific model, its model year or how old it is, the mileage driven and the general condition of the vehicle.

Beware of purchasing a vehicle that is sold above its current market value. There are websites and apps available on the internet which can assist you to determine a more accurate value of the vehicle you would like to purchase

Inspect vehicle thoroughly before making a bid

Auction houses generally set aside some days prior to an auction during which time prospective buyers can inspect the vehicles on offer. Ensure that this inspection is conducted as thoroughly as possible to avoid any nasty surprises after you have purchased the vehicle.

A good indication around the state of a vehicle can be obtained from the service record which would normally be available with the vehicle. It may also be helpful to ask a third party, such as a mechanic or vehicle expert to assist you with the pre-auction inspection.

Business Insider warns, however, that there may be instances where a bank or auction house does not provide the vehicle’s service history or any other information around the vehicle.

Useful things to know

There are some auctioneers who would allow you to start a vehicle’s engine, but traditionally, auction houses will not allow anyone to actually test drive a vehicle before an auction.

There are instances where vehicles are not available at the auction site or for pre-inspection. This would naturally introduce significant risk into a potential purchase.

A car’s vehicle identification number (VIN) is imperative to a purchase

It is critical ’s to establish a vehicle’s VIN. This would allow a new owner to establish whether the vehicle has been stolen or has been involved in an accident. VIN checks can also be done at a police station.

Auctions come with costs

To participate in a repossessed car auction, bidders are required to pay a deposit of between R5 000 and R7 000. This deposit will be refunded should you not purchase a vehicle during the auction.

In addition, bidders will be required to provide proof of residence and a copy of their identity document.

Other costs bidders may face include that many auctioneers or the banks involved in an auction may demand a documentation or an administrative fee which can be as much as R3000.

Also, some auction houses charge a buyer’s commission payable by the buyer of a car to the auction house. This commission can amount to 5% of the value of the sale price.

According to Business Insider, Nedbank’s Motor Finance Corporation (MFC) charges a fee of R571.74 for the inspection report completed by vehicle inspection company Dekra Automotive South Africa.

This report is available for each repossessed car that it auctions. Importantly, bidders should also be aware that VAT may be applicable on the purchase.


Before registering and participating in an auction, make sure that your finances are in order and that you know exactly how much money you would have to spend. Should you not have the finance you anticipate you will need to purchase the vehicle of your choice, you can approach a financial institution to secure the requisite funds.

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