Buying a used vehicle at an auto auction is a great way to save money on a car or truck, but before the day of the sale it’s important that you determine the amount of money that you can spend. After you purchase the vehicle, you don’t want to discover that you can’t afford the insurance, taxes and other costs that are associated with the purchase of a used car. In addition to the bidding price of the vehicle, don’t forget to figure in the costs below so you don’t go over your budget.
The cost of an insurance policy on a vehicle will vary and it depends on several factors including the make and model of the car or truck. If you know what type of vehicle you want to buy, give your insurance agent a call to get an estimate of the cost of insurance. Since you won’t need a lender to finance your vehicle, as you must pay for the vehicle in full before it leaves the lot, you don’t have to get comprehensive or collision insurance if you don’t want it. Of course, if you can’t afford to pay for car repairs in the event of an accident, it’s a good idea to have this extra insurance, but it’s not mandatory. Purchasing liability insurance is the law in every state, so you will at least have to purchase a liability policy.
Taxes, Plates and Additional Fees
After buying a used vehicle, you will have to visit a Department of Motor Vehicles office in your area to pay the state sales tax. You can contact the DMV office before going to the auto auction to find out the sales tax rate in your city. The amount of sales tax you’ll pay is determined by the price you pay for the car. After determining your vehicle budget, you can figure out an estimate of the sales tax after finding out the rate.
After buying an auction vehicle, you’ll also have to get license plates and tags. If this vehicle is a replacement for your current vehicle that already has license plates, you can request a transfer of plates and then pay the fee. Contact the DMV in your area to find out the fees for license plates or a transfer.
When buying a vehicle at an auto auction, it’s also necessary to pay a buyer’s fee. You can find out how much this fee is by calling the auto auction contact number. The fee is usually based on the selling price of the vehicle during the auction.
When figuring out your bidding limit at the auto auction, don’t forget to add in these costs and fees. By doing a little math first, you’ll be confident that you can afford the car you want and the extra costs won’t stretch your budget.