Can You Finance a Car From an Auction in Canada?

It’s time for another common question from our car loan customers. Today’s question is actually quite a rare one, which is why we chose it. The question was ‘Do I need a car loan to buy at auction?’

Our car loan team provides the answer.

Car Loan from an Auction

You cannot use a car loan to buy a car at auction. You need to have cash available to pay off the car in full whenever you buy at auction. That means having the money in the bank or paying by credit card on the day.

Buying a car at auction may not be your best bet anyway.

Auctions are a way to get cheap cars but they are often cheap for a reason. They will be sold as seen, require payment in full on the day, and can incur auction fees which bump up the price. Some auctions only charge the seller but others levy a charge on both buyer and seller.

You may be better off buying a used car from a reputable dealership, like us!

Car Loans and Used Cars

You may not be able to use a car loan to buy at auction but you can use one to buy a used car if you like. We regularly secure competitive car loans for used cars and we could help you too.

The cost of the car loan will depend on the age of the car, your credit score, the amount you want to borrow, and your financial situation but is a viable way of buying used.

Reasons Not to Buy a Car From an Auction

Buying a certified used car has several advantages over buying at auction. We think that unless you’re going for a specific reason, car auctions are best left to car dealers.

Why?

• Unknown History: Cars sold at auction are sold as seen. You don’t necessarily know its background, how well it has been looked after, or what the previous owner did with it.

• No Guarantees: Sold as seen means there is no warranty or guarantee. It’s up to you to verify the condition of the car and check it before the auction. Once the hammer goes down, it’s yours and you have to pay for it.

If you’re in the car trade or know someone who is, buying a car at auction can be a good way to get a bargain. As long as you can inspect the car before the sale and satisfy yourself of its condition and value, they can work.

For anyone else, they can be a risky proposition. That’s why we think it’s easier and safer to buy a certified used car.

You get a warranty, can take it back if it wasn’t as described, can get it fixed if something goes wrong during that warranty and you have the peace of mind of knowing the car has been fully inspected before being listed for sale.

We may be biased, but we think it’s the best way to buy a used car!

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