Thinking about purchasing a vehicle from an Online Public Auto auction? Make sure you’re prepared. In order to pay the price you want for the car you want, you’ll need to be ready with a speedy internet connection and as much knowledge about the online auctioning process as possible. Becoming familiar with auto auction terminology is one step you can take to save yourself precious seconds as you’re bidding.
Below, you will find a list of the Top 10 online auction terms and what they mean.
Snipe Proof- An online public auto auction can be considered “snipe proof” when bidders are protected from the last-minute bids of their competitors. If for example, one such bidder were to place a high bid during the last second before the auction closed, the platform would automatically extend the closing time in order to allow other bidders to top the price offered.
Reserve Price- This is the minimum amount a seller requires of a prospective buyer in order to sell the car. If this price is not reached, the vehicle may not be sold.
Sealed Bid- In a sealed bid auction or “best offer auction”, the bidder is requested to name his highest and best bid price at the start of the bidding by entering that value into the “Maximum bid” box on his computer screen. In sealed bid or best offer events, none of the bidders are aware of the amounts their competitors have offered. A bidder may reconsider their previous mindset and raise their offer if so desired at any time prior to the event closing time, if they feel it will improve their chances of winning.
AS-IS- This term is used to describe a sales transaction in which the seller offers prospective buyers a car in its current condition. Cars bearing this label may often need major or minor repairs.
Maximum Bid- This term refers to the highest amount a bidder is willing to pay for a car at the moment. At any time before the event closes, a prospective buyer may increase this amount.
Proxy Bid- This is a specific kind of sealed bid that allows a bidder to win the auction before reaching his maximum bid. If, for example, one bidder were to set $3500 as his maximum price for a particular car, and another bidder chose a maximum price of $4000 for the same car, the second bidder could win the auction by offering $3600, without reaching his maximum bid.
High Bid- The current highest bid attributed to a particular buyer on the auction lot or online is referred to as a high bid.
Asking Price- The auction platform seeks this price to move the auction forward and surpass a particular High Bid.
Bidding Increments- After each new bid, the auctioneer raises the price of a vehicle by a certain amount or bidding increment.
Hammer Price- This term refers to the winning bid at an auction. The hammer price typically does not include buyer fees or processing fees, (if any are applicable).
These are some good definitions to know once you decide to buy a car from an online auto auction. Please don’t stop here, continue to research other online auto auction terms, so that you’ll be as prepared as possible to bring home your next used vehicle!
If you have any questions about these terms or you would like to learn more about online public auto auctions please contact us.