• Buyers looking for a used car can often catch a terrific deal by bidding for a car at an automobile auction. However, purchasing cars at an auction can carry a number of risks. To figure out when and how to bid effectively, a prospective buyer should follow some basic tips.
  
  

Do Your Research

• Many auctions provide catalogs in advance outlining the cars available for purchase. Some descriptions are more detailed than others, but most offer make, model and overall condition. Research the blue book value and potential mechanical problems of every car on which you hope to bid. Ideally, you should have a fair price outlined for each car before you step into the auction.
  
  

Make Sure You've Got Enough Money

• Many auctions require all bidders to put down a significant registration fee. If a bidder is successful, he often is required to put down the full sum of money before he leaves. According to the Car Buying Tips website, some auction houses may require the bidder to prepare a bank draft instead of a check, so plan ahead.
  
  

Inspect The Vehicle First

• Most auctions give prospective bidders time to inspect the cars before the bidding starts. It may be financially worthwhile to hire a mechanic to come along with you and give the cars a once over. For every car you're considering bidding on, look at every part of the vehicle possible---under the hood, under the body, under the seats. If you can't inspect the cars, be suspicious and consider pulling out of the auction.
  
  

Check The VIN

• Check the vehicle identification number sticker on the doors, hood and trunk. The VIN on each of these parts should match. If not, the car may be stolen. After writing down the VIN, call a friend sitting by a computer and ask him to run a vehicle history report on the car to see if it was involved in any major accidents.
  
  

Watch For Bid Ups

• After you've done your research and you begin to bid, leave emotion at the door. In the event that the bidding for a car gets heavy, keep your cool. It's tempting to believe that the people furiously bidding a price up know what they're doing, but they may or may not be legitimate bidders. Sometimes, fake bidders are hired by the car owners to drive the price up. Know the maximum price you're willing to pay for each car you're bidding on and stick to it.