If you’re looking to sell one or more cars, no matter whether you’re a trader in used cars or a private seller, an auction can be an effective and quick method of getting a good price, making it well worth your consideration. Auctions can provide an efficient way to sell cars quickly when you need to, and they can also offer a more exciting method if you’re seeking a new selling experience.
Auctions can also be convenient, as they stop you from having to hunt down potential buyers, instead bringing your car into an arena of like-minded enthusiasts and buyers. Rather than advertising, arranging and managing inspections, you can collect a host of private buyers, car dealers and auto-traders in one place to look at your car saving you time and effort. This means that you effectively get to present your car to a competitive crowd willing to bid against each other to purchase your vehicle. This auction-style system has the potential to earn your motor a higher price tag than if it had been advertised in a private sale.
There are two different methods used in auctions for selling cars called ‘reserve’ and ‘no reserve’. While both have their own unique merits as a sales strategy, it’ll be up to you to decide just which is most suited to your individual needs and tastes.
So, exactly what does ‘no reserve’ mean at a car auction? To answer this question we first need to establish what a reserve price at a car auction is:
What is a car auction reserve?
If you’re planning to sell your car at auction, your initial step will be to make contact with the auction house and arrange an appropriate time and date to arrive at their location with your car. When you turn up, your vehicle will be thoroughly examined by the auction house technicians. They’ll need to assess and inspect your car to build an accurate and detailed description so it can be listed in the auction guide for interested buyers to view. Part of this examination will assess any damage your car has incurred since you purchased it, allowing them to place a loss-value on this damage and work out the best price for which to sell your car.
The auctioneers will work with you, always taking into account your car’s mileage, age, condition, and service history to decide its worth and help you choose a reserve price if you want one. The reserve price is a fixed minimum price for which you wish to sell your vehicle. When selecting a reserve price for your car at auction, it’s sometimes wise to listen to the advice offered by the auctioneers. The auction houses have a good incentive to always charge the greatest amount they think a car can acquire at auction, as they stand to benefit from a substantial 10% of the value a vehicle is sold for, or in some cases more.
Always bear in mind that putting a reserve price on your car at auction will accrue an additional fee. This, however, may be worth the peace of mind it offers as it can make sure you don’t end up parting with your car for a price far lower than you think it’s worth.
One drawback of putting a reserve on your car is that people looking for a bargain might be scared off, and because of this, an auction with a reserve may not draw as big a crowd as one without. Fewer bidders on an auction might mean the price of your car may rise slowly. And remember, if the highest bidder fails to reach your chosen reserve price, your vehicle may not sell at all.
If this circumstance should occur, the auction house may offer you and the buyer an opportunity to settle via a compromise on price. While trying to come to an arrangement that’s satisfactory, both of you can retreat from negotiations, but if you decide to accept the offer, your car sale will then go through.
If you’re unable to agree on price with the highest bidder, you’ll be allowed to keep your vehicle with the auctioneers, by agreeing that it will be put up again in future auctions. You’ll be required to pay an entry fee for each new auction however, and the auctioneers may charge you for storage fees while it waits to sell. This is usually decided by how many auctions it takes to secure your car’s sale.
What does ‘no reserve’ mean at a car auction?
A no reserve car auction is one where the car will be sold under the hammer regardless of at what price. If you’re a seller, no reserve car auctions can be an attractive option as they have the potential to draw the largest quantity of eager bidders who smell the possibility of buying a car at a bargain. If a greater number of bidders take part in the auction, a higher final price may be possible, achieved via this increased level of competition. This approach contrasts acutely with reserve auctions, in which those attending are firmly aware that if a reserved price is not met, the car may not be sold.
While starting low and accumulating lots of bids from those in attendance to raise the final price can seem to be a sound strategy, there are potential pitfalls. Imagine if it’s your car’s auction day and fewer people than expected turn up to compete. This lack of competition could result in your vehicle being sold for far less than you would like to receive for it.
With a reserve auction, you’ll have the option to enter negotiations should your reserve price not be met. This means you can ultimately wait and auction your vehicle in the future for an amount you’re fully satisfied with. In a no reserve auction, you won’t have this luxury. With no reserve in place, you must accept the amount the highest bidder offers whether you are happy with it or not. That means you may even be forced to accept a financial loss.
Should I put a reserve on my car at auction?
Whether or not you should put a reserve on your car at auction is a personal decision and will depend on several factors. If you’re not particularly concerned with the price you attain for your auctioned car, but are keen to sell it in a hurry just to be rid of it, then a no reserve auction may be an option for you. If you’re confident in your car’s ability to draw a crowd and feel a good level of interest in your vehicle is assured, then not placing a reserve may be viable.
For the most part, those selling cars through an auction are keen to get the best price for their unwanted vehicle. If this sounds like you, a reserve auction might be a more suitable choice. When you set a reserve of your desired price, you can feel secure in the knowledge that your vehicle is not going to sell for a disappointing sum. Your specified reserve must be met by bids before your car sale is able to be finalised.
When setting a reserve price for your car at auction, always remember to be as realistic as possible. At the end of the day, you do want your vehicle to sell. Always listen to any advice offered by the auctioneers and be mindful that they not only possess a wealth of experience when it comes to how much a car can sell for, but also stand to gain, so are unlikely to undersell your car. A loss to you will also be a loss to them as they stand to benefit in the form of commission and auction house fees.
Before its big day under the hammer, make sure your vehicle is looking its finest. Rather than cleaning it up yourself, it may be well worth the price of a professional valeting to attract as may bidders as possible. The more documentation you can provide the better, as this raises confidence in your car in the eyes of those buying. Make copies of all paperwork associated with your vehicle, from its logbook to service history, and include this in a folder within your car.
If your car requires its annual MOT, make sure you get this taken care of before the auction. MOTs will be seen by buyers as an independent and qualified opinion that’s impartial and can improve interest considerably. Additionally, if the buyer is keen to drive the car away from the auction, they’ll need a valid MOT in place to do so.