Government Auto Auctions 101: Your Frequently Asked Questions Answered

Automobiles, like property and equipment, are often auctioned off by the government and its designated agencies for various reasons. You may have received an invitation to such an auction at one time or another listing the items being auctioned that day.

You may have attended a car auction, but do you know why those cars were auctioned in the first place? What happens from the moment the cars were seized? keep reading

• What is sold? Why are they sold? Where do they come from?
Those cars you see at auctions were probably seized from loan defaulters or are unclaimed or excess vehicles. Instead of being left to rot, they are seen as a source of income and are therefore sold at public auctions. Not only sedans are auctioned. There are also trucks, SUVs, vans, and even forklifts. Anyone can attend these auctions as long as they are over 18 years old and have a valid driver’s license. On some occasions, auctions are open only to authorized car dealers.

• Who conducts the auctions?
These government auctions are conducted by various government agencies. In the US, the General Services Administration (GSA) conducts most of these auctions. There is also the Department of the Treasury, the Border Patrol, the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), Homeland Security, the US Marshals and the Internal Revenue Service (IRS) . Local, state, and county governments also hold auctions from time to time. For vehicles seized due to a violation of the law, the city and county police, fire departments, state police, and city and county administrative departments will be the ones to sell those vehicles. The banks and the credit institutions will be the ones that will auction the cars that were seized from the defaulters. In most cases, these auctions are usually conducted by a government or bank contracted private auction. This facilitates the process while ensuring that all rules related to public auctions are noted and adhered to.

• How do these auctions work?
The auction is held at a designated location at regular intervals, either monthly, quarterly, or yearly, depending on the organizers and vehicle availability. These would be announced and notified to the public through notices placed in local newspapers. Brochures are also sometimes handed out to the public.

There are no warranties or guarantees for vehicles sold at auctions. The price you pay is the price of the vehicle only, unless you purchase the vehicle from a professional auction company. Government-run auctions do not charge buyer fees or registration fees.