Buying Vehicles at Auction for Your Business: Things Worth Thinking About

Vans, trucks, company cars, minibuses, coaches and hire-fleet motorhomes pass through UK auctions in huge numbers. Leasing returns, fleet replacements and insolvencies mean businesses can often buy at trade prices, sometimes below.

Vehicles also sell fast. A lot can go in under two minutes, payment is often due within a day or a few days, and storage charges start soon after. These are the questions worth asking before you bid for your business.

1. Before the sale

• —Can you buy at this auction? Some of the biggest vehicle auctions are trade-only and need a business account set up in advance.
• —What should it cost? Compare recent auction results and trade guides for the same model, age and mileage.
• —How does this auction grade condition? Each auction house uses its own grading scale. Learn what its grades mean before relying on them.
• —What fees apply? Vehicle auctions often charge a fixed buyer's fee per vehicle, plus extra fees for online bidding. Read the conditions of sale.

2. The vehicle itself

• —Can you see it start and drive? Many sales drive vehicles through the hall. Go to viewing if you can, and look underneath.
• —What does its MOT history say? The free GOV.UK MOT history check shows past results, mileage readings and repeated advisories.
• —Is there a service history? Ex-fleet vehicles often have good records. Gaps are worth pricing in.
• —For specialist vehicles: check bodywork, tail lifts, refrigeration units, conversions and living areas, which can be costly to repair.

3. The paperwork and the law

• —Is it clear of finance, theft and write-off records? A vehicle history check costs little and can save thousands.
• —Does the mileage add up? Compare the odometer with MOT records and the vehicle's wear.
• —Is the V5C logbook available? Confirm it comes with the vehicle, along with all keys.
• —Is VAT added to the price? Many cars are sold under the margin scheme with VAT included, but ex-fleet commercial vehicles often have 20% VAT added on top. Check every lot.
• —Do you have the right licences? Goods vehicles over 3.5 tonnes usually need an operator's licence, and passenger vehicles have their own rules. Check before you buy.

4. The real cost

An illustrative example for three ex-fleet vans bought by a VAT-registered company:

A VAT-registered business can usually reclaim the VAT on commercial vehicles, though the rules for cars are stricter. It still has to be paid up front. Check the real figures for your sale, and ask your accountant about VAT.

5. The money

• —Can you pay in time? Payment windows are often between one and a few days, with late-payment fees after that.
• —Is your finance agreed before you bid? Pre-approval sets your budget and means you can pay before the deadline.
• —Are you building a fleet? Several vehicles can often be financed together, which is simpler than one agreement per vehicle.
• —Did you buy with cash? You may be able to release that cash later by refinancing vehicles you own outright, subject to lender approval.

6. After the hammer

• —Is it insured to leave the site? Many policies don't cover driving away from an auction, so arrange cover in advance.
• —When must it be collected? Storage charges can start within a day or two. Book delivery or drivers before the sale.
• —Is it ready for work? Allow for a service, any repairs, livery and tracking before it goes on the road.

Finance arranged before auction day

Our sister brand, Hammer Ready, arranges finance for commercial vehicles bought at auction, including vans, trucks, company cars, buses and specialist vehicles, and motorhomes for hire fleets. It can help you get pre-approved before you bid, fund vehicles you have just won, or release cash from vehicles you bought outright in the last six months.

Hammer Ready works with limited companies, partnerships, LLPs, sole traders and PLCs, on amounts from £26,000. There is no broker fee, and all finance is subject to status and lender approval. Vehicle finance is arranged for business use only.