eBay sites are amongst the most popular auction sites in the world. If you’re
after high performance car parts, they’re a fantastic resource – but what about
buying and selling cars themselves on eBay? Like any other way of buying or
selling secondhand goods, it has advantages and disadvantages.
Buying
So how do you go about buying? When a car is placed for auction, you can read
the description of the car (kilometres, year, condition); look at the current
price (this may be the starting price – ie the amount that the vendor has placed
the goods in at, or it might be the price that the bids have already taken the
auction up to); the number of bids (if any); and the time remaining for the
auction.
The car might have a starting price of $3,000, and four bids that have taken
it up to $3500. The vender can place a reserve on motor vehicles, so despite
there being bids, the amount may not yet have reached reserve – something that
will be clearly stated. (Personally I hate reserves. As a seller, why not simply
set the starting price as the lowest you’ll accept?)
As with any other goods auctioned on eBay, bidding for a car works on a proxy
system. If you chose to bid $4,000 on a car sitting at $3,500, you’ll find that
in most cases after you bid, the current shown price will have risen only
marginally – the proxy system means that the bid amount rises only sufficiently
to be higher than anyone else’s bid (assuming of course that other’s people’s
max bids have been less than $3,500!). If no one else bids, you might get the
car for only $3,600.
All of that is pretty much like bidding on any other eBay item - but of
course, most eBay items go for much less than the price of a car. The added risk
of car buying means you must take far more precautions against being ripped off.
Never bid without first inspecting and driving the car. You wouldn’t see an
ad in a newspaper and send someone a cheque, car sight unseen - so to do
something similar on-line is just crazy. It’s for the reason of inspection that
it makes sense to use the eBay facility that allows you to first list the cars
which are geographically closest. Then, when you’ve found something that you’d
like to have a better look at, contact the seller through the site (send them
your phone number and location) and when they call you, arrange an inspection
time and place in the same way you would when buying a car through newspaper
classifieds. Incidentally, don’t feel that you’re putting-out the vender by
doing this: typically, the seller will receive many emails for further
information but vastly less people will actually be serious enough about the
purchase to go look at the car in the flesh.
If the car looks great and there are no bids, you can put the question to the
vender: "Would you like to do a deal now and finish the auction early?" Some
venders will be happy to do this (sometimes even at the auction starting price!)
while others will note your interest but say they want to let the auction run
its full course.
It becomes more complex if the seller has a ‘personal reserve’ – a price
below which they’re not going to sell the car but without having that reserve
listed on the eBay ad. For example, the car might have a starting price of
$6,000 but the seller has decided that if they don’t get $8,000 for it, they’ll
withdraw the auction a few days before it ends. This is a really difficult
position for you, the potential buyer. If during the inspection you learn of the
‘personal reserve’ you could offer $6,000, or alternatively wait to see if the
item does get withdrawn and then make a lower offer. (Despite the seller saying
they want $6,000, $5,500 will probably do it if there have been no bids.)
Incidentally, eBay states: "Sellers are not permitted to cancel bids and
end listings early in order to avoid selling an item that did not meet the
desired sale price. This is considered to be reserve fee circumvention. Although
there are legitimate reasons for ending a listing early, abuse of this option
will be investigated." But this doesn’t stop people doing just that.
If the vender has stated in the ad that there is a reserve, and the auction
price is yet to reach that reserve, always ask what the reserve is before
travelling to look at the car. For example, I was looking at a car which had a
starting price of $400 and on which bidding had reached $551 Reserve Not Met. I
emailed the seller and asked for his details so that I could come and inspect
the car, but as soon as we were in telephone contact, I asked the reserve. After
all, there wasn’t much point in looking at the car if the reserve was $3,000. It
turned out the reserve was $600 and so an inspection was worthwhile. In fact,
knowing the reserve gave me an advantage over other bidders – although, if
you’re not a stickler for eBay rules, you can get a feel for the reserve price
by putting in a large bid, seeing that the auction price has exceeded the
reserve, and then withdrawing the bid, having said you made a typing error...
As with all eBay auctions, sniping gives you a considerable advantage.
Sniping is the practice of bidding in the very last window of opportunity before
the auction closes. Unlike a traditional auction (and some other online
auctions), eBay has a closing time for every auction. When that time comes, the
winning bid is the highest at close. Snipes can occur in the last minute, the
last 30 seconds – even the last 10 seconds.
If you have a high speed web connection, and if you want to be sitting at
your computer keyboard at the end of the auction, you can manually snipe. But
most snipers use dedicated sniping software that does the hard work for you.
However, sniping software still requires that your computer is switched on and
web connected. An alternative is to get a dedicated sniping web site to snipe on
your behalf. Some web sites will do this free for a limited number of auctions
per week (eg two auctions) about 15 seconds before auction closing. If you pay a
fee, unlimited auctions can be sniped within just seconds of closing. (The moral
dimensions of sniping are interesting and we’ll leave you to make your own
judgements on that.)
The feedback record of a seller is less important when bidding on a car than
for other items. This is because you don’t need to place so much trust in the
seller, because you are actually inspecting the goods before bidding. However,
if the seller has a negative record (not just a short one), obviously take note!
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Don’t forget to confirm the car belongs to the person selling it. Most states
allow you to check this once you have details like the engine and chassis codes,
which are provided in the eBay ads.
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Selling
Selling a car on eBay has some major advantages over other private sale
techniques. Firstly, it’s cheap. Secondly, lots and lots of people view the eBay
cars sites. And finally, you have the text and photo space to make a really good
ad.
As you’d expect, selling on an online auction site is more complex than
buying, so it’s best to become a buyer before selling. Registering for selling
requires that you provide credit card details – this is used as proof of
identity.
Don’t skimp on the detail in the ad. If you leave out anything, you can be
almost guaranteed to get an email asking about that very thing! So, put in the
distance travelled, model, year, engine condition, interior condition, paint
condition, why the car is being sold, etc. Expect to get lots of emails – ten or
twenty is not at all unknown and unfortunately many of them will contain
bizarrely low cash offers for the car (eg you’ve started it at $13,000 and
someone will offer you $8,000), really dumb questions ("My brother heard that
some of these cars come with leather. Does yours?" – that’s after the photos
clearly show cloth trim) and other strange emails. As said above, those who want
to physically come and look at the car are much rarer.
Many people will request additional photos so it makes sense to assemble a
file of reasonably high res pics that you can send to these people with just a
few clicks.
When arranging for an inspection, you might want to pick a neutral spot at
which to meet. That could be a service station or anywhere there are other
people around. That way, you’re not showing a stranger where you live and a
carjacking is much less likely. But it’s also easy to get carried away with
security – I wouldn’t arrange to meet out the back of a supermarket at midnight,
but by the same token, I wouldn’t bother bringing along four bouncers to a
normal, daylight meeting.
It is safest to accept only cash or a bank cheque - although don’t forget
that while it is rare, both can be forged...
Doing It
I’ve both bought and sold cars through eBay.
The car I bought was an orphan Japanese grey market import. I spotted the
late-Eighties Toyota Crown Supercharger on eBay, contacted the owner and
arranged to inspect the car. The auction starting price was AUD$2,200, with no
bidders at the time I was looking at the car. Almost as a throwaway line I
offered the $2,200 and the seller immediately accepted. However, my inspection
of the car wasn’t quite as thorough as it should have been – I didn’t notice the
new paint that hadn’t been applied all that well, indicative perhaps of rust
underneath. (Rust that in fact began to appear over the next 12 months.)
And the car I sold? The very same Toyota Crown! After the auction ad appeared
with a starting price of $1,500, a guy requested an inspection and when he came
and was apparently impressed, I said he could have it on the spot – but for
$2,500. I half expected him to bargain that down to $2,000 (about the amount I
wanted) but he wisely declined to do so, saying instead he’d bid at the auction.
In the auction there were two bidders and the guy who had inspected the car was
the winning bidder at $1,650.
Conclusion
eBay is an excellent way to buy and sell cars – the sheer size of the site
and number of viewers is good for both buyers and sellers. But don’t forget that
the basics of buying and selling used goods applies just as strongly with online
auction sites as in any other private transactions where items are exchanged for
money.
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