Online Car Auctions vs. Traditional Car Dealerships: Which Is Right for You?

Online Car Auctions vs. Traditional Car Dealerships

Like most people, you’ve probably bought your vehicles from a dealership. In fact, auto dealerships are how most Americans purchase their cars, and these types of businesses do a lot to ensure that most people will only consider buying a car from one of them. Dealerships spend millions of dollars on marketing to make their business a household name. They also spend a lot on lobbying to ensure that other avenues, such as private vehicle sales and auto auctions, are difficult for consumers to navigate.

However, as automobile prices continue to outpace an already sky-high inflation rate, more consumers are looking to see if there are other auto marketplaces to save money on a car purchase. Auto auctions are becoming increasingly popular, but they might not be right for everyone.

Auto auctions can save a person thousands of dollars when they buy a car, but only if they know what they’re doing. You might be a good candidate to buy a car at an auction if the following conditions apply to you:

1. You’re willing to take the time to learn about auctions.

Buying a car from an auction differs from negotiating a price with a dealer. In fact, the entire auction process is a lot different.

At a dealership, it’s often possible to take the time to learn about a vehicle after seeing it on the lot. With an auction, however, you’ll likely need to start bidding as soon as you see something come up. Because of this, people need to go into an auction knowing what they want. Specifically, it’s a good idea to know the make and model of the car you want to buy and the total amount you’re willing to pay.

Auto auctions are typically much faster pace than the negotiation process at a dealership, so it’s important to be someone who can establish firm boundaries. Simply bidding on any car that meets a vague set of requirements is an excellent way to ensure you pay too much for a vehicle that won’t make you happy.

2. You’re not in a hurry to buy.

When you buy from a dealership, you can generally show up in the morning and walk out with a car you want by that afternoon. While this seems to have changed in recent months as dealerships are experiencing more supply issues, the dealership is still the place to go if you need a particular car in a hurry.

At an auto auction, it’s very difficult for the auction house to control the exact makes and models of vehicles that will be up for sale. While most auction houses tend to have a wide array of cars, trucks, and even commercial vehicles, it is very hard for them to guarantee a particular vehicle will be available.

If you are looking for a specific car, you should attend several auctions or visit an online auction site such as multiple times over several days or weeks. Typically, auctions work best for people with a list of several types of cars they are willing to consider.

Remember that popular makes and models at a dealership will also be popular at an auto auction. That means that the price may rise fairly quickly. If you truly have your heart set on a particular vehicle, you must be prepared to walk away from several auctions or pay more than you may want.

On the other hand, an auto auction can be a great place to find a vehicle that doesn’t have a lot of demand. This is particularly true for older cars and vehicles with a limited run.

3. You can keep track of fees and manage the finances of buying a car on your own.

Buying a car from a dealer typically means the dealership will “handle” all the fees, transfer paperwork, and even financing. If you want, a dealer will assemble and file all the paperwork, and you must pay a set monthly amount for your car. Of course, this often comes at the cost of thousands of dollars in additional fees that dealers and banks will add to the price of the vehicle.

An auto auction will typically charge a fee on top of the vehicle’s purchase price to handle its transaction costs. Still, after that, the customer is generally on their own to arrange financing and tags. If a customer is willing to take this on, it’s possible to save thousands of dollars. For example, this allows customers to shop for an auto loan, letting them find one that meets all of their needs.

Furthermore, controlling the fees paid for transfers and tags can save an auto shopper a bundle, particularly if they’re buying a vehicle for another person, such as a child or parent. A buyer does need to be able to research local laws, however. Typically, a phone call to the DMV or a visit to the DMV website will give them the information they need.

If you’re considering trying an auto auction to purchase your next car, contact us at We have years of experience selling affordable vehicles to people all over the nation, and we would love to help you find your dream car.


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