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Government Auctions

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author photo by Autotrader January 2004

Heard the promises of $100 retired military Jeeps and $500 luxury cars confiscated in drug raids? You've likely seen the newspaper ads, flyers and infomercials that were so popular in recent years as part of get-rich-quick schemes, promising to show us how to buy luxury automobiles at a small fraction of their real worth through government auctions.

The truth of the matter is that the U.S. government agencies that oversee the sales represent us-the taxpayers-and they are committed to getting close to fair market value for the vehicles. So even if a few vehicles pass through the auction block for cheap, it's not the norm.

Never give your credit card information or social security number to a third party who claims to "guide" you through the process. Most likely, these so-called services are scams. Thankfully, the number of such scams involving information about government auctions is decreasing.

Who auctions the vehicles?

Three federal agencies resell vehicles through official government auctions: The Treasury Department, the U.S. Marshals Service, and the General Services Administration. In most cases, private companies run the auctions under contract.

The Treasury Department resells vehicles confiscated by bureaus under its control, such as the IRS, the U.S. Secret Service, and the Bureau of Alcohol, Tobacco, and Firearms.

The U.S. Marshals Service sells vehicles forfeited under Department of Justice laws through the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Immigration and Naturalization Service.

Due to the various governmental units that supply the vehicles for auction, there's no single reason for vehicles being brought to auction. Some of the vehicles are confiscated due to the former owner's involvement in drug dealing, smuggling, or fraud, while other vehicles were simply just abandoned. On exception, separate auctions will sometimes be held for very large seizures.

The General Services Administration sells used vehicles used by civilian federal agencies, such as the U.S. Postal Service or the U.S. Forest Service.

Vehicles purchased through GSA auctions are generally a best bet, because most of them were purchased when new, used continuously by the same department, and maintained at the proper intervals. Nearly all of these vehicles have automatic transmissions and air conditioning, the standard spec for agency cars.

How do you find the auctions?

There are many places to find out about upcoming auctions, and all of them are free:

The Internet. All three of the agencies that oversee auctions post information about upcoming auctions on their sites. Some include results of past auctions, to give you an idea of actual sale prices and the sell rate. Also check the Web site of the Consumer Information Center, in Pueblo, Colorado (888-878-3256 to request information by phone).

Newspapers, magazines, or trade journals. Auctions for seized property will typically be advertised with a notice in the classified section of large city newspapers. Also check Commerce Business Daily, a publication of the U.S. Department of Commerce.

Local bulletin boards. The bulletin boards at libraries and grocery stores are still good places to find posted notices about upcoming auctions.

What do you do, and how do you place a bid?

Register to bid. In order to participate, you must register before each auction event. Registration is always free for government auctions. Just bring proper photo identification and you'll get a bidder number and a catalog of what's on the auction block.

Consider only a few vehicles. Ahead of time, obtain the list of vehicles up for auction and narrow your focus down to a few that might fit your needs. Usually, the auctioneers will only provide the year, make, model, and vehicle identification number (VIN) for each vehicle, along with the total miles registered on the odometer.

Inspect the vehicles. Attend the preview times (sometimes a day or two before the auction or earlier that day), and check out the vehicles that fit your interest. During these times, you can carefully look at the car's interior and exterior, and you can start the engine but not go out for a test drive. In all cases, the vehicles are sold as-is, so take into account the possibility of costly mechanical problems. The auction company will sometimes provide information only if it's critical to the safety of the vehicle, but all vehicles in these auctions are deemed roadworthy. It might be a good idea to take your trusty mechanic along to the preview so you can get his or her gut feeling about the vehicle.

Do your research. Check Kelly Blue Book for the proper price for the vehicle, including its mileage and apparent condition. Always downgrade the condition by one ranking for government auctions. Also, do some smart used-car research, such as checking Consumer Reports for reliability and the frequencies of particular repairs, and checking our road test information if it's a recent model vehicle.

Going, going, gone! Live auctions are always exciting and entertaining whether you're the bidder or not, and government auctions are no exception. Make sure you don't miss your cue to bid. If you're not clear on how bidding progresses, ask one of the auction company officials. Some items will have an undisclosed set minimum bid (reserve), while most items will be offered without reserve. Most auctions will also accept in-absence, written bids if the bidder follows special procedures and the bid is received more than a day before the auction.

Pay and pickup. Generally, for transactions of $5000 or less, the full payment is due by the end of the day of sale, whereas for higher sale amounts a large-sum deposit might be required. Payment policies should have been outlined at the time of registration, but contact the auction company for more information. Most vehicles will be released on the day of sale, but in some cases a background check of the buyer will be required to be sure they are not the former owner buying the car back.

Don't get discouraged with your first auction. It takes a good sense of what a vehicle is worth, and the ability to think fast-plus some luck and common sense-to get a good deal. Watch the seasoned bidders at work to catch the gist of it. If you're a smart bidder, government auctions can be a good place to find an inexpensive second car or work truck. Just remember: any deal that seems to be too good to be true probably is!

©2007 by The Car Connection™ All Rights Reserved - The Car Connection is a Trademark of DA Acquisition
This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Government Auctions - Autotrader