Guide: Government car auctions

Purchase cheap cars by auction?

There is an endless number of online auction portals, where you can buy everything from phone numbers to luxurious cars. The government also auctions goods, which have previously been confiscated by customs or other public authorities. Both professional dealers as well as individuals can bid on their desired objects and buy it in case of the highest bid. These are organised by authorised auctioneers in each Emirate. In this guide you will learn everything you need to know about government auctions and how rewarding they can be and if purchase by auction is a suitable way to buy a used car.

How does a government auction work?

Usually the government entity, be it the municipality or police announce their intention to auction cars via newspaper and ask auction companies to apply for organising these. There are numerous companies, which can be chosen, such as Copart, Emirates Auction, Golden Bell, Al Sahra or others. Each of these auction houses have their own procedures, whereby certain conditions need to be met. They all receive an equal share of the products and they all need to be open to the public. After successful registration, everyone can place bids on goods currently up for auction. Normally such single auctions run for a few days, but sometimes only few minutes. However, you need to hold the highest bid for a minimum time to win the bid. For example, if two minutes before auction end another highest bid is placed the auction is extended by another five minutes, this procedure continues until either someone wins the bid or someone places the highest bid.

If an offer was made during a government auction, this offer is legally binding and the agreed auction amount has to be paid by the highest bidder. During registration you also agreed to the terms of service, which back up this procedure legally. You might have been asked to deposit an amount of money prior to the auctions, serving a a (usually fully refundable) guarantee. After the auction ends you have to pay immediately and pick up your article. After consultation with the seller it is also possible, to have the items shipped at the buyer’s expenses. Therefore you have to provide a copy of your identification card and a confirmation of payment.

Government auction – Suitable for the purchase of a used car?

If you can purchase a cheap used car during a municipality or police auction most likely depends on your own expert knowledge. This is required, so that you can realize if an offer is lucrative and to secure the winning bid. Especially when used cars are auctioned off, a lot of the present bidders are professional car dealers. Besides bidding skills some luck as well as sufficient financial means are needed to seal the deal during a used car auction.

The advantage of a used car bought at customs, municipality, police or any other government auction is that it was evaluated by an appraiser beforehand. As soon as the car has been released to the auction this report can be seen.

Checklist of advantages and disadvantages of a customs auction:

+ seller is undoubtedly reputable

+ fraud is highly unlikely

+ cars are evaluated by an appraiser before the auction, the report can be seen

– cars are mostly scrap, junk or long-time standers

– cars cannot be fully inspected, mostly come without keys

– cars sometimes do not have clean titles, potentially still with court cases

– a lot of professional dealers bid, they often buy the best cars

– no warranty or guarantee

– test drive is not possible

Online auction portals vs. government auctions

Classical online auction portals outnumber the government auctions. Everything possible is offered there. Once an article is successfully auctioned off the portal passes on the contact data between the seller and the buyer, who now can make final agreements on the payment and delivery methods. A guarantee by the seller can be offered voluntarily, just like in free trade. But sellers’ warranties do also exist for online auction portals. The major disadvantage is the insufficient checking, if an auction is really reputable or fraud.

The main difference between regular online auction portals and government auctions is, that here seller’s warranties are completely omitted and normally guarantees aren’t granted either. Discarded items of administrative use and lost properties are also excluded from warranties in case of a defect. Excluded from this fact are defects caused by acts of gross neglect or intention. A possible disadvantage for bidders at government auctions can be that the highest bid will become irrelevant and the auction is cancelled. This can happen when the owner pays for the forfeited item and therewith redeems the pawn.