How to Buy a Used Car at a Government Auction
According to the Bureau of Economic Analysis, a part of the United States federal government you’ve likely never heard of unless you work in it, total spending by all governments in the United States totaled $7.3 trillion in 2019. That’s 34-percent of the country’s gross domestic product (everything we did that made money). Keep in mind this is for 2019 — before the COVID-19 pandemic, which has blown government spending upwards like a rocket burning a refined distillate of debt.
And what did the local, state, and federal governments throw all that cash at? Well, a lot of things, like ballpoint pens, aircraft carriers, homeless shelters, governor’s mansions, and lots and lots of vehicles. So many vehicles in fact that they’ve always got a bunch to unload.
And where they do that unloading? At auctions. Sometimes huge auctions where the inventory to be disposed of stretches off to the horizon. Sometimes it’s a few old snowplows and used up cop cars being sold behind a dealership. And increasingly, the auctions take place online because, hey, everything is happening online. Especially in a pandemic.
If you’re curious about buying a car at a government auction, here are a few suggestions, strategies, and tips to get the most out of it.
Learn the Government Auction Ground Rules
Don’t get anywhere near an auction without being clear about how they operate and what your obligations are as a bidder. Particularly a bidder who wins a vehicle.
Federal government vehicle auctions are usually run by the General Services Administration (GSA). To find out what’s going on at the moment vehicle-wise, wander over to its Fleet Vehicle Sales web site. While the GSA lists the vehicles it is selling, those vehicles are actually consigned to private auction houses that run the actual events. Follow the links on the GSA site to those companies, who will administer the auctions.
Observe some auctions before participating. Seek out friends who have used them, or check out forums discussions to learn from others’ personal experiences. If you’re not comfortable with the process, familiar with at least some of the intricacies, and liquid enough to back up your bids, don’t participate in an auction.
Government Auctions are Pay Now, Take Now
Rules can vary from auction to auction, but generally you’re obligated to pay for a vehicle that you win immediately. No going to grandma to ask for a loan, no digging change out from the creases of the Barcalounger, just a debit or credit card with the room to handle the purchase. If you’re the winning bidder on an item during an auction, you’re legally obligated to pay for it and take it.
When you win an auction, don’t expect the auction house to let the vehicle linger on their lot. You’ll be required to retrieve it quickly. Maybe that means going there and driving it away – if it’s drivable. If it’s not operating, you should have a truck and trailer ready to haul it away. U-Haul does rent car carriers. Or it might mean arranging shipping with a transportation company before the auction ends. Whatever, be ready to move. If there’s a grace period for taking possession, it won’t be for very long. Expect the auction houses to charge storage fees for any vehicles left in their care (if they care) after the event.
Fleet Vehicles vs. Seized Vehicles
Governments don’t tend to buy fancy, highly-optioned vehicles unless it’s for very specific reasons. So, while there are rare exceptions, most fleet vehicles are base models, modestly optioned, and often painted white. Don’t expect to get something too high falutin’ from the GSA.
That in mind, government fleets are generally well-maintained. There’s nothing bureaucracies like better than rules to follow. And generally speaking, they will follow the manufacturers’ schedule when it comes to maintenance.
Vehicles seized from their former owners make up a much, much smaller portion of those sold by the GSA. These can be anything from rancid old Renault Alliances to blisteringly fast Lamborghinis. It all depends on who the IRS or Justice Department is pursuing and what assets they manage to take.
Remember, though these seized vehicles may be tempting, they haven’t necessarily been maintained to the same schedule or with the same care that fleet vehicles have. They’re an iffy proposition. If you can handle the risk, go for it.
Stick to What You Know
Rarely does anyone get to drive a vehicle before bidding on it at an auction. Online that means you must be able to assess a machine’s quality and condition from photos alone. Or, if there even is a physical aspect to the online auction, based on a description provided by an auction agent, which isn’t likely to be detailed or even very accurate. If you have the sheer genius to pull off a thorough inspection based on modestly detailed JPEGs, God speed to you. But generally speaking, you should expect there to be flaws that the photos don’t show.
It’s also true that no one can know everything about every vehicle. If you know the ins and outs of GM trucks but are kind of mystified by Rams and Fords, stick to what you know. Don’t substitute a guess for an informed opinion.
Vehicles in government auctions sell without warranties and in as-is condition. Make a mistake in your assessment of a vehicle, and you’re on your own.
Inspecting a Government Auction Vehicle
If you get to a physical auction, learn to look for telltale signs of unusual wear or abuse. In states where the roads are salted in the winter, any visible rust is probably very bad news. In sunshine states, though, don’t fret over sunburnt paint if it’s covering what is otherwise a creampuff. Rust is expensive, paint is cheap.
Most auction houses won’t let you drive a vehicle you’re interested in, but they may allow you to start it. Listen for noises that shouldn’t be there and shift the transmission into gear to make sure that’s okay. See if the AC works. Step around back to see if there’s any unusual smoke coming from the tailpipe. Make sure the tires match and check them for uneven wear (evidence of a worn suspension).
While government fleet vehicles usually have well-documented mileage, don’t assume anything. Look for paint texture differences that might indicate repairs have been made. Check the wear on brake, clutch, and accelerator pedals for signs that they’ve been used more than the odometer may indicate. Cracked engine hoses may be trivial problems, while leaks around head gaskets may indicate major problems. Check oil levels and coolant levels and make sure they’re topped off and clear of contaminants. If something smells funny, that’s not good.
Look through the glove compartment and every other cubby for clues to how the vehicle was used. If there are holes where equipment was mounted to interior panels, that could mean you’ll have to hunt down replacements for those panels. Look also for “ghost images” of insignia decals on the vehicle’s fenders and doors.
Perfection isn’t offered at auctions. What you’re looking for are flaws that matter.
Do Your Research
Not every purchase at a government auction is a good deal. You need to know the market value of the vehicle you’re considering before you get swept away in the bidding. Research Craigslist and every used car site on the Internet. Don’t pay too much just because you didn’t know how much to pay. The big challenge though will be sticking to your price. Auctions can be fun, exciting, and overwhelming. Stick to your budget.
Spend a few bucks running any vehicle’s Vehicle Identification Number (VIN) through a history check on sites like CarFax.com. Use your phone on site to instantly check a vehicle you’re inspecting. VINs are usually listed online before any auction action. Don’t be a cheapskate; pay for some assurance. If you’re not familiar with vehicle history reports, check out our article: How to Read a Vehicle History Report from CARFAX or Autocheck.
The Bottom Line
Vehicle auctions are always about one thing, and it’s not cars or trucks. It is, of course, money. The people involved in a government auction are usually professionals. They’re dispassionate, focused on turning a profit, and smart. One of the best clues you have to a vehicle’s worth is watching the behavior of other bidders. If no one else is bidding, they may know something you don’t.
Be careful. Get a bargain. Have some fun — but not too much.
Photos courtesy GSA, Mecum, and Wikimedia Commons
- Don’t Buy a Used Car Without Doing These 4 Things
- How to Finance an Older Used Car
- Buying a Car Out of State: When It Makes Sense and How to Do It