Online auto auctions can save you as much as 50 to 75 percent on the price of a vehicle. While some general auction sites have vehicles listed, other sites specialize in selling vehicles only. While online auctions can save you a lot of money, they are best approached with caution and a better understanding of how they work. While the cost of a vehicle may be low, most auto auctions also charge a buyers premium, which can add between five and ten percent to the final price you pay.

Government auto auctions are probably the largest source of vehicles put up for auction. Law enforcement officials may confiscate and sell property, including vehicles, from criminals or people who default on their taxes. Because storage space can be extremely expensive, these seized goods are often sold at ridiculously low prices. Financial institutions may also repossess cars when car owners default on car loan payments.

In recent years, a number of fly-by-night websites purporting to provide links to government auto auctions have sprung up. These sites charge a fee to provide information on the location and timing of upcoming auctions, but often the information provided is obsolete or false. If a site is difficult to navigate and you are unable to speak with a customer service representative, try and avoid it. Most reputable auction sites offer a complete refund and provide customer service.

Some online auction scam operations attempt to sell vehicles that have been salvaged in one state to customers in another state. Many auction houses perform no check, or only a cursory check, on a cars title. To avoid losing money on an online car auction purchase, it is always a good idea to check that the cars title or vehicle history report is clean.