How to Buy Your Next Vehicle at a Car Auction in Canada in 2023

With the current shortage of new vehicles, most experts from the auto industry predict inventory staying low and prices high for at least the next few years. If you want a used car, you don’t have to go to a dealer and haggle. You should try a car auction.

Previously, car auctions were exclusive to dealers and brokers. Now, more auctions are open to consumers. Below we have a closer look at what car auctions are, what types of cars are available, and what else you should be aware of when looking for a vehicle at a car auction in Canada.

What are car auctions?

Car auctions let buyers bid against others for a vehicle. You win a bid instead of trying to win a negotiation with a dealer.

Where to find car auctions in Canada?

Searching various car auctions without some preliminary knowledge of what to expect can be overwhelming. In Canada, there are many types of car auctions in every province.

The list of most well-known car auctions with physical locations across the country includes: 

• Copart
• Manheim
• ADESA
• Impact Auto Auctions
• GCSurplus.

Types of car auctions

Car auctions are classified by several criteria, including whether they list cars online, if they are open to everyone or accessible by invite only, or if they are run by the government or privately-owned companies. Here are the most frequent types of car auctions available in Canada:

• global public auctions. which are open to the general public, such as ADESA, Copart or Manheim, with physical locations all over Canada,
• provincial auctions, like ESP Auto Auction in Quebec
• government auctions, such as GCSurplus, offering vehicles owned by the Canadian government, governmental agencies, and forfeited cars
• smaller online auctions relying primarily on the virtual bidding process
• private auctions, accessible by invite only, run by dealerships.

What types of cars can you get at an auction?

You can find virtually any type of vehicle in different conditions depending on their listed category. For some auctions, you need to familiarize yourself with the common terminology used by the auctioneers to know exactly what is offered. 

For example, a Clean Title Vehicle from Copart means used vehicles with normal wear. A Salvage Vehicle is viewed as a ‘total loss’ by the insurer, limiting the chances of repair.

What types of cars come to auctions? 

Car auctions present an opportunity to source various vehicles, including:

• passenger cars
• sport utility vehicles (SUVs)
• buses
• classic cars
• trucks. 

There are vehicles of different makes and models and model years. The vehicle age and mileage also vary from one-year-old vehicles. If you are looking for vintage cars, try John Scotti Classic Cars auction in Montreal.

What are the sources of cars on car auctions?

Each auction has its primary source of cars. Knowing which auction has vehicles you are interested in can save time and allow sourcing the most desirable car. 

For example, the GCSurplus government auction, with sales centres across Canada, is a primary source for vehicles from the Canadian government as well as forfeited cars. 

Meanwhile, Copart is the main source for salvage title vehicles after accidents, although it also sells clean-title roadworthy cars. In general, you could find all types of vehicles, including cars at the end of the lease, fleet cars, and repossession vehicles.

How to participate in a car auction

Participating in a car auction is exciting but complicated for a novice. You want to get some experience before making your first bid. 

Some auctions highly recommend new bidders to participate in a few auctions as spectators to learn the ropes, ask questions and get a better understanding of the purchasing process. Here is a general overview of the car auctions and the most important aspects of the bidding process.

Who can participate in a car auction?

Most often, public and government car auctions are available to everyone of legal age. However, some restrictions may apply depending on the auction. 

For example, the GCSurplus auction is available to anyone over 18 years of age. On the other hand, ADESA public auction requires buyers to have a valid driver’s license. 

Meanwhile, Copart allows registered members across Canada who do not have a business or dealer’s license to bid online for the vehicles physically located in Alberta only. At the same time, Copart cars in other provinces, including Quebec, are available only for brokers and dealers. 

How to bid on a car

The bidding process is different for online and live auctions, although the principle is the same. 

How to bid online

If you participate in an entirely online auction, you must:

• register for an auction
• pay an auction registration deposit to obtain a bidding number
• find the car you are interested in 
• place your bids against other bidders
• if you participate in an online auction where a broker’s license is required, you will be prompted to a broker website after you click on the listing.

How to bid in-person

If you participate in person, the dynamics are somewhat different. Sometimes, you can visually inspect the cars you are interested in before the auction if you arrive early. 

In many cases, there is an auction schedule available to all the bidders. Once the auctioneer announces the lot with a starting price, you can start bidding until the lot is announced as sold. 

Strategies to win a car at auction

Bidding is a competition with other potential buyers, so it takes experience and practical knowledge to win. However, it is absolutely possible to win a bid following simple strategies which can give you an advantage over other participants. 

• set a limit for bidding and stick to it as it is very easy to get drawn in the process and overspend
• if there are too many bids for a particular vehicle, sometimes it is better to let it go. Auctions have many other lots to offer, which may have less competition
• raise bids slowly and not reveal the maximum amount you are prepared to spend.

How do you pay for the car?

The exact payment method depends on the type of the auction and the auction itself. In many local live auctions, you are expected to pay in cash. The government-run GCSurplus auction accepts debit and credit cards, certified cheques and money orders. 

Make certain that you have enough room on your credit card before bidding. Certain credit cards like The Platinum Card from American Express do not have pre-stated credit limits. When you apply, they evaluate your ability to pay.

Meanwhile, the ADESA auction doesn’t accept credit cards or cash for final payment. You need a debit card, certified cheque or bank draft. You need to check the accepted payment method with the auction where you plan to participate by reading the terms on their website.

Common questions of first-time bidders

If you participate in a car auction for the first time, you may have many questions about various aspects of the selling process. Below we will answer the most common concerns first-time bidders might have when planning to make their first bid. Keep in mind that different auctions may have their specific processes, so it is important to double-check this information for your chosen auction. 

Do the cars have any liens on them or is the due diligence already done?

What is a lien? It is a lender’s right to claim payment for a loan registered against the vehicle. Buying a car with a lien on it is the worst-case scenario for any used car buyer. Fortunately, most top car auctions like Copart or Manheim only accept vehicles which are lien-free. 

How to check liens by province

For a fee, you can use Personal Property Security Act (PPSA) to search in any province.

• In British Columbia, you can use the Personal Property Registry website.
• In Alberta, use the personal property liens search
• In Ontario, get the UVIP (Used Vehicle Information Package) from the seller, containing vehicle lien information, among other details.
• However, in Quebec, the onus of running checks is on the buyer, so you should use the car vehicle identification number (VIN) and enter it into the Registre des droits personnels et réels mobiliers. You can go even further and check if a vehicle can be registered by using an online service from the Société de l’assurance automobile du Québec.

Can you buy a warranty at a car auction?

In most public and government auctions, cars are sold in “as-is” condition. This means you have no warranty and cannot get any compensation if you buy a lemon. 

In most auctions, all sales are final, which means that you cannot return the vehicle after purchase. However, some auctions like Manheim go further by offering a 7-day/300-mile guarantee to Manheim Certified vehicles. The car must be under 125 thousand miles. and are offered with a small surcharge.

What to look for when buying at a car auction?

There are multiple aspects to consider before buying at a car auction. Naturally, you want to visually check the vehicles by visiting the auction site in person before bidding. In any case, whether you bid online or on live auctions, here are things to consider when buying a used vehicle:

• car age and mileage as these are the primary factors which influence the price and the cost of potential repairs,
• get a vehicle identification number (VIN) to access a car’s history in various online databases,
• car history, including how many owners the vehicle had, who were the owners and the way the car was used to evaluate potential wear,
• accident and damage history with Carfax or similar reports,
• presence of defects on the body, windshield, wheels or other parts of the vehicle,
• prices for similar cars elsewhere on online platforms or with dealers to set your maximum budget for a particular vehicle.

Can you buy insurance at a car auction?

Typically, car auctions sell cars without insurance. So, it is the responsibility of the owner to purchase the insurance package.

However, if you buy at a closed auction with a dealer, you may be able to purchase insurance directly from the auctioneer. 

Once you have the vehicle information, you can compare car insurance quotes online. Knowing your options can save you money.

Things to do after buying at a car auction

After you win the bid, you pay and arrange for the pick-up of your vehicle. Although it may sound simple, there are still some things to consider when you take possession of your vehicle at the car auction.

Arranging for pick up

Many buyers at car auctions prefer to pick up their car and drive it straight home. While it sounds tempting, do not do this without first inspecting and insuring the vehicle. 

Most auctions recommend using trucks or haulers for safe transportation of your vehicle. Besides, driving without third-party liability insurance is illegal in Canada and can lead to penalties.

Read more about car insurance in Canada

Do you need an inspection after a car auction?

Since car auctions sell vehicles in as-is condition without warranty, you definitely need to have your vehicle inspected after purchase. You need both a mechanical inspection to make sure your car is roadworthy and a safety inspection for registration purposes. 

Some auctions, like Manheim or ADESA, offer post-inspection after you buy the vehicle.

Registering your car

You need to have your new vehicle registered to get the license plates. You need a standard package of documents, including:

• your driver’s license
• the bill of sale
• safety inspection certificate
• proof of liability insurance
• license plate, which you buy at your provincial car registry. 

The exact requirements for registration in each province can vary. Check those which apply in your location. 

For more information, you can check the vehicle registration requirements by province with the Clutch online marketplace. You can visit provincial websites, too.

Car auctions not for you?

No worries. You can still scoop a great deal somewhere that isn’t an auction, dealership, or sketchy private sale. Clutch has your back with an easy-to-use online platform. Browse hundreds of vehicles to find “the one,” book a test drive delivered right to your door, and even return it within 10 days – no questions asked. Financing is also made simple with pre-approval car loans from major banks – all without leaving your home.

The takeaway

Buying a vehicle at a car auction is a great alternative to purchasing from dealers. It offers the chance to purchase a vehicle at a very low price. Meanwhile, buying used cars in general, and cars from car auctions in particular, requires a certain amount of experience to avoid common pitfalls and overspending. 

Although purchasing used cars at auctions has certain risks, following the above advice can make it easier.