Buying used cars at auction

You need to prepare before buying at auction. Try to go to a few auctions first to see how they work.

Before the auction

Before you bid at auction:

  • be aware that there is no cooling-off period
  • find out if the vehicle has a statutory warranty
  • check the market value of the vehicle you like
  • set a realistic price and stick to it
  • study the terms and conditions of sale.

Usually, you are not allowed to test drive a vehicle before bidding on it at auction. However, you should be able to inspect it.

Remember, you can't back out of your purchase after the hammer falls. Below is some useful information to help you buy a car at auction and protect your consumer rights:

At the auction

After the auction

Once you buy the car

At the auction

The bidder's duties

You must register with the auctioneer before you can bid on an item.

This means that you will need to:

  • register with them before the auction starts
  • show suitable identification (such as a driver licence)
  • get an identifying marker (such as a numbered card, paddle or baton) from the auctioneer
  • use your identifying marker to indicate a bid.

The auctioneer’s duties

An auctioneer must have a licence as a chattel auctioneer. They will need to either:

  • display their name prominently at the site of the auction
  • announce their name at the start of the auction (but only if displaying would be impractical).

It might be impractical to display a sign if, for instance:

  • you are outdoors in inclement weather, such as in heavy wind
  • the auctioneer is moving around to auction different vehicles in a large outdoor area.

You can do a free online search to make sure they have a valid licence. Check a licence.

Before an auction, the chattel auctioneer must announce if the vehicle:

  • does (or does not) have a statutory warranty
  • is a repairable write-off, which must pass a written-off inspection before it can be registered
  • is a statutory write-off, which can never be registered.

Reserve price

The seller must have set a reserve price on the vehicle. The auctioneer will therefore announce that:

  • a reserve price exists on an object (before the start of bidding)
  • bidding has reached the reserve price.

It’s up to the seller to choose whether they disclose the reserve price.

Before the bid reaches the reserve price, the auctioneer can:

  • accept bids from the seller to raise the price
  • accept bids from their representative
  • bid on their behalf.

These are called vendor bids. The auctioneer must announce if a bid is a vendor bid.

Once bidding reaches the reserve price, any more vendor bids will become ‘false bids’.

False bids are illegal.

Buyer’s premium fee

A buyer’s premium is a fee for the buyer to pay (usually a percentage of the sale price). Some auctioneers may charge this fee, but they must have the seller’s written consent.

They will also need to state to all bidders:

  • that the buyer’s premium will apply on a sale
  • at what percentage they will charge it.

To do this, they will need to:

  • make the statement verbally at the start of the auction (except for online auctions)
  • display the statement so it is visible to each prospective bidder (including at an online auction)
  • include it on all advertisements.

Restorable vehicles

At an auction, a vehicle is considered restorable if it is:

  • 20 years old or more
  • for sale for restoration.

Restorable vehicles do not meet the criteria for statutory warranties however, consumer guarantees apply.

After the auction

Highest bid above the reserve price

If you have the highest bid, above the reserve price at the end of the auction, you must complete the sale. The auctioneer will record the details of the sale.

Bids under the reserve price

If the vehicle failed to reach the reserve price, you may negotiate with the seller. At this point, the auctioneer may give your details to the seller to help you negotiate. The auctioneer can only disclose your identity if it’s necessary to help facilitate a sale.

The seller can choose to reject the sale.

If the seller agrees to your terms, you must complete the sale and the auctioneer will record the details of the sale.

Once you buy the car

When you buy a vehicle at an auction, you are entitled to:

  • a statutory warranty for certain vehicles
  • a clear title guarantee (a guarantee it does not have unpaid debt attached)
  • a safety certificate
  • a receipt
  • a completed registration transfer application
  • access to a claim fund that may compensate you if you lose money because of the auctioneers actions.

Statutory warranty covers you when the vehicle’s:

  • odometer reading is less than 160,000km
  • date of manufacture is less than 10 years before the sale date.

The warranty expires after 3 months or the first 5,000km.

Find out more about statutory warranty.

Claim fund compensation

If you suffer a financial loss because of certain actions of a chattel auctioneer or their employees, you may be able to make a claim against the claim fund.

Find out how to make a compensation claim.

If you need help resolving a dispute refer to understanding the complaint process.