Mistakes To Avoid When Buying A Car On Auction | Smatfin

  • Mistakes To Avoid When Buying A Car On Auction

    Mistakes To Avoid When Buying A Car On Auction

    August 6, 2018 By Shimanga Mubitana 1 comments ,  ,  ,  

    If you’ve ever gone to a car auction, you’ve seen how people snatch great car deals that even baffle the commission-incentivised auctioneer! Some of the cars can literally sell for about half of what the retail value is. It’s shocking… I know they say “In war, there are no winners”… But believe me, after what I saw – in bidding wars – there certainly are. Let’s take a look at exactly how you can make sure you’re one of the winners.

    First mistake: Know what you’re bidding on

    For most auctions, there will be a catalogue of the cars to be auctioned available online, from the company hosting the auction. To start off with, you must go through this list and pick out roughly five to ten cars that spark your interest.

    Pick the ones you reckon you’ll be able to afford, but at the same time will bring a smile to your face when you’re out on the road. If it’s the Jaguar you’ve always wanted so be it. And if it’s the Polo Classic, that’s fine too.

    Second mistake: Know exactly what you need to pay

    Many people don’t realise that the price you bid for a car at auction doesn’t include the commission, handling fee or VAT. It’s like buying a chocolate marked $10, but actually paying $10,70. That’s because when you get to the till they add in the sales tax.

    In most African, when you go to the store and see the price of a a product, the price you is see is exactly what you’ll pay. This is because the VAT has been factored into the final price…But like I said, with auctions, it’s excluded!

    In terms of commission or handling fee, some places charge a flat rate of around R2,500 while others charge a percentage (usually around 5%, however this charge could be paid by the seller).

    So make sure you ask before you start bidding…

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1 Comment

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Cobus

Made the VAT mistake a few years ago when I bought a Hilux on auction. My plan was to sell it because we only needed it for a trip to Mozam, but yes when it came to selling the VAT took away all the profit I was planning to make. haha

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