Be prepared: Don’t get hammered in the halls

Date: Tuesday, May 03, 2016   |   Author: James Dallas

There are bargains to be had at auction for non-trade buyers, but they need to bid on more than a whim and a prayer, as James Dallas discovers from talking to key remarketing experts

Venturing into the world of the motor auction to buy the van you need for your business can seem like a daunting prospect for the uninitiated who may shrink at the prospect of competing with battle-hardened professional bidders.
But with demand for LCVs across all market sectors high, for those willing to take the plunge, the auction aisles could offer the largest range of models to choose from and the best bargains to be had.
Duncan Ward, LCV operations director for British Car Auctions, offers this advice for beginners: “BCA recommends you visit three or four auctions before you actually buy, just to get used to the pace and the environment, which can seem intimidating at first. Once you feel comfortable in the auction surroundings, you are less likely to make a hasty buying decision.”
Ward points out that potential first-time buyers can do some research beforehand by checking Auction View, BCA’s online catalogue and stock locator, to help them find a suitable van from the hundreds on offer at sites across the UK every week. For extra peace of mind, many vans come with a BCA Assured Mechanical Report, produced in partnership with the AA.
In any case, he does not believe owner-drivers and SMEs are naive when it comes to learning the ropes at auction.
“Small businesses and sole traders are typically well-versed in buying goods and services in the wholesale sector, and many see acquiring a van for the business as an extension to this,” he says.
Ward adds that trade and non-trade buyers are likely to look for vans at different price-points anyway, with professional buyers competing for examples in ready-to-retail condition, particularly those with a high specification or unusual configuration.
On the other hand, end-user buyers tend to go for older, higher-mileage vans, typically coming to auction from the dealer part-exchange sector.
He claims most non-trade buyers will have a clear idea of what they need to meet the requirements of their businesses, so will target the best example they find within their budget.
“Condition, age and mileage are the key components of price and the cleanest, best-presented examples will generally attract the most bidding,” explains Ward.
He says specification can determine the vans buyers will bid for, and lists ply-lining in the load area, side-loading doors, and a well-equipped cabin, preferably with aircon, as persuasive features.
“A retail specification will always attract buyers, so metallic paint, alloy wheels and in-van entertainment systems are always popular and are likely to generate premium values,” Ward adds.
Jayson Whittington, manager, commercial and leisure vehicle valuations at Glass’s, reckons one in five bidders at auction are non-trade. He advises them to do their homework by checking the information sheet fixed to each van’s windscreen that provides details such as MOT date, service history, whether the mileage is believed to be correct, and if there is a registration document available.
“Most vehicles on offer are in an unprepared state, so you have to be very careful that you know what you are buying to ensure that you get any saving at all,” he cautions. “Clearly, when buying direct from auction you will save on paying for a dealer’s profit margin, but the cost of bringing a vehicle up to standard is likely to work out more for you than a dealer.”
Ken Brown, Cap’s Red Book LCVs editor, argues that end-user buyers can often compete against (wholesale) trade buyers because they don’t have to worry about making a sell-on profit on the van they purchase and so can afford to pay more for it at auction.
“If they get it right and don’t end up paying too much for it they save money,” he says.
On the other hand, Brown says auction buyers lose the consumer rights that protect customers who purchase a van from a dealer.
He explains: “The vast majority of dealers want you to have a good buying experience from them. Generally, they know all about the vans they sell and are therefore unlikely to have bought a bad example for their stock.”
Brown warns inexperienced auction-goers to be wary of the auctioneer and other bidders driving up the price of a vehicle if they know it’s the one they (the end-users) want, and to be prepared to walk away if the price goes higher than their intended limit.
He advises end-users to know exactly what they are after in terms of model, spec, payload, engine and fuel consumption, and not to buy a vehicle on a whim.
A tip Brown offers end-users is that if the attendance level in the hall drops when those who have bought vans are waiting to pay for them then this could be the time to pick up a bargain – “with less competition around to outbid you”.
He concludes: “Don’t appear to be too anxious. Take your time – always give the impression that the current bid price is close to the maximum you want to pay. You get two warnings before the hammer – sold once, sold twice – then the hammer drops.”

 

BCA's Golden Rules of Buying at Auction

Pre-sale: Do your homework. Know what you want to buy before you come and have a good idea of what the van is worth. Check the online catalogues to see what is available on the day.

On the sale day: Don’t rush. Arrive in good time and look around. Walk the line-up and examine the vehicles on offer. Take time to choose the van that interests you, and if possible, select a couple of ‘back-ups’ if you are unlucky in bidding for your first choice.

Check the van: Remember that it is up to you to check the overall exterior visible condition – paintwork, trim, tyres – and the interior cabin prior to sale. Check the load area, interior lining and doors. All these factors are ‘sold as seen’, so take every opportunity to examine the van in the line-up prior to entering the auction hall. When the van is driven into the auction hall, follow it in and listen to the engine running.

Budget: Set a limit on what you are prepared to pay. Don’t go over it in the heat of the moment, and remember you will have buyer’s fees to pay, dependent on the price and number of vehicles purchased, and VAT is payable on most vans. If you are buying an older van, set aside some funds for a post-sale service and consider that you may need some minor repairs carried out.

Flexibility: Don’t get too possessive about a particular vehicle (see ‘Budget’) or overlook some obvious faults. Larger auction centres will handle in excess of 500 commercials on any particular sale day, so if you miss your first choice, go and look again or walk away and come back another day.



Share



View The WhatVan Digital Edition

Downward triangle