With the rising cost of cars in SA, more buyers are opting for repossessed cars instead of new or used cars. These cars, sold in car auctions can offer massive savings compared to car dealerships.
But car auctions can often feel mysterious, like a world guarded by gatekeepers who don’t want outsiders to know the inner workings.
That’s why we created this guide – to help you understand and navigate the world of car auctions.
By the end, you’ll know how to register with an auction house, inspect the lot and participate in the bidding process.
We’ll also breakdown the true cost of buying auction vehicles.
Hint: It’s more than just the hammer price.
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What Are Repossessed Cars?
Repossessed cars are vehicles collected or voluntarily surrendered by owners to banks/finance houses when they defaults on their car loans.
Banks would usually give a notices and try to work things out with the owner. But if the default continues, the bank has no choice but to repossess the car and auction it to recover the rest of the loan amount owed.
First of all, you should approach this process with caution.
Auction houses allow you to inspect the cars but test-drives are not allowed. Furthermore, cars are sold “as is” (Voetstoots), so any faults you miss during inspections could lead to expensive repairs later.
That said, buying a repossessed car can be a smart move, as long as you know what you’re doing.
How car auctions work: Step by step guide to your first car auction
The best way to succeed at a car auction is to be very prepared. Winging it often ends in regret. You don’t want to end up with a lemon.
Pricing basics
There are 2 main prices you should understand:
- The reserve price: This is the minimum bid set by the auctioneer to ensure that the bank recoups the amount outstanding on the vehicle loan. This price is typically measured against the retail value at that moment in time. Expect it to be 10 – 20% less than the car’s retail value.
- The hammer price is the final accepted bid price. Once the hammer falls, the deal is sealed and the vehicle now belongs to the bid winner.
But it doesn’t stop there, the hammer price is not the final cost. The auction house also charges a commission (usually 5-6% of the hammer price) plus 15% VAT, which aren’t included in the hammer price.
| Item | Description | Typical cost |
|---|---|---|
|
Hammer Price |
Final bid price |
Depends on the vehicle |
|
Auctioneer commission/premium |
Fee charged to the buyer |
5 – 6 % of hammer price |
|
Administration / Documentation Fees |
Paperwork and processing |
R2,000+ (excluding VAT) |
|
VAT |
Value Added Tax on hammer price |
15% |
|
Licensing and registration |
Ownership transfer & licensing |
R1,000+ |
|
Costs of repairs/maintenance |
Post-sale costs |
depends on the condition of the vehicle |
When you plan your budget, always factor in these fees.
Registering for a car auction
To take part in the auction, you’ll need to register as a bidder. To requires:
- A copy of your ID document,
- A recent proof of residence and,
- A refundable deposit. (R5,000–R25,000, depending on auction house)
Some auction houses may also require proof of affordability (pre-approved finance or a certified bank statement showing the funds at your disposal).
You’ll sign a contract outlining the auctioneer’s terms and conditions. This includes payment deadlines, collection terms, and buyer responsibilities. Read it carefully and ensure you understand the fine prints before signing.
💡 Your deposit is taken off the total cost if you win a bid. If you don’t win, it’s refunded. But if you win and don’t pay, you’ll lose the deposit
Inspecting the car before the auction
Auction houses allow you to view the vehicles a few days before the auction. When you view the cars:
- Note down the VIN. To check the car’s service and accident history.
- The auction house provides a list of faults they picked up during their own inspection including a Dekra report. This will be available on an info sheet on the window of the car but you can ask for it.
- Do your own visual assessment of the vehicle to find damages and decide what you’d be willing to pay for the vehicle.
- If you can, bring an experienced mechanic to the inspection to help with the inspection.
💡 Remember: Auction cars are sold Voetstoots: meaning the auction house accepts no liability after the sale.
The bidding process
This is where it gets really exciting. If you’re a first timer, it’s recommended to attend a few car auctions to observe before engaging.
- Once you’re registered, you’ll get a bidder number for easy identification.
- The auctioneer introduces the vehicles and describes its condition including any known issues.
- Bidding starts at the reserve price and rises with each offer.
- Participants raise their paddles or call out to place their bid.
- When the hammer falls, the highest bidder wins and sale is final.
💡 Attend a few auctions before you bid, it’ll help you understand the pace and psychology of bidding.
Payment and collection after bidding
If you win, payment is due within 24-72 hours and only EFTs or bank deposits are accepted.
If you miss the payment deadline, you lose both the car and your deposit. The vehicle then goes into the next auction.
After payment is completed, you’ll receive a tax invoice and release note on the vehicle. You’ll be responsible for transporting your vehicle from the auction house even in situations where it’s not road worthy.
Popular car auction houses in South Africa
If you’re looking for repo cars for sale, these are some of the most popular auction houses in the country:
#1. MFC Auction House (by Nedbank)
- Locations: East Rand, Cape Town, Durban
- Requirements: FICA documents & online registration
- Deposit: R5,000
- Auction Days: Every Wednesday
- Starting Time: 11:00am
#2. Motus Auto Auctions
- Locations: East Rand, Cape Town, Durban, Bloemfontein
- Requirements: FICA documents & auction registration
- Deposit: R5,000
- Auction Days: Every Monday
- Starting Time: 11:00am
#3. Burchmore Auctions (by Bidvest)
- Locations: Sandton, Cape Town, Durban
- Requirements: FICA documents
- Deposit: R5,000
- Auction Days: Every Wednesday & Saturday
- Starting Times: 7:00pm (Wed) & 10:30am (Sat)
#4. GoBid Cars (Online & Branch)
- Locations: Bloemfontein, Cape Town, Pretoria, Durban, East London, Gqeberha, Polokwane, Pietermaritzburg, Sandton, West Rand
- Requirements: FICA documents & online registration
- Deposit: R5,000
- Auction Days: Monday – Saturday
- Starting Times: 9:00am & 10:00am
#5. We Buy Cars Auction (Online)
- Locations: Cape Town, George, Johannesburg, Epping, Richmond, Springfield, Polokwane, Mbombela, and more
- Requirements: FICA documents
- Deposit: R5,000
- Auction Days: Monday – Saturday
- Operating Hours: 8:00am – 5:00pm
#6. Auction Nation
- Locations: Johannesburg, Centurion, Cape Town, Durban
- Requirements: FICA documents & registration
- Deposit: R4,000
- Auction Days: Monday – Friday (some Saturdays)
- Starting Times: 8:00am, 8:30am & 10:00am
Final thoughts
Buying at auction can be a great way to save money on your next car, whether you’re buying for personal use or for growing a rental fleet.
There’s a widespread sentiment that all auction cars are damaged and problematic cars, but that is not necessarily true. In fact many car dealers buy their inventory from car auctions and many also dispose of excess inventory through auctions.
There are so many other reasons a car could be repossessed:
- Buyers losing their job.
- Buyers getting sick and dealing with high medical bills.
- Even the death of the car owner.
- To name a few.
The key is knowing how to evaluate the opportunity and being ready to act when the right car shows up.
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