Since there are an overwhelming number of advertisements on the Internet which make the claim that you can get items for pennies on the dollar at government auctions, we though it best to examine this claim and set some realistic expectations.
We have seen advertisements that will place a $100 price tag above a picture of a late-model SUV, as if to suggest the vehicle is going to sell for that amount at auction. That is extremely unlikely. Now a newer SUV could sell for $100 at government auction if the side of the vehicle that is hidden from the camera view has been completely destroyed in a wreck. Wrecked vehicles are sold all the time and there may be a goldmine in some of those wrecks because the parts can be valuable. Of course that doesn’t help you if you thought you would be driving home a brand new car for $100.
Whenever you hear the claim about amazing deals, you should show skepticism because if it’s too good to be true it probably isn’t true. This applies to Real Estate and general merchandise as well. We’ve always worked hard to make sure people didn’t have the wrong idea about what can be gained at government auctions, so we tend be conservative in our views. That’s not to say that people haven’t been able to acquire items at these auctions for below market value. That does happen, but it’s just as easy for people to pay above market value prices for items because it’s an auction and there is an auctioneer doing his best to get people caught up in the excitement and drive up the bids.
We’ve heard from a number of our users who have posted testimonials about how they did very well at a government auction, either by getting a great deal on something they are keeping for themselves or something they are reselling at a profit, but there is no guarantee you will have the same experience, so you need to be careful. On the other hand, an old adage for bargain hunters is nothing ventured, nothing gained. Since most of the items are auctioned at no reserve, at least you have an opportunity to bid below market value on the items you are interested in. If you do go to a government auction to bid on items, arm yourself with information on market values of whatever you intend to bid on before you go to the auction. Play it safe and you won’t be sorry.
