How to buy second-hand goods at an auction

What protection do I have?

If you buy second-hand goods at an auction you do not have the benefit of the standard protections under the CONSUMER GUARANTEES ACT 1993 (see How to exercise your rights under the Consumer Guarantees Act).

However, you may be protected by the FAIR TRADING ACT 1986, which prohibits auctioneers from misleading bidders as to the goods for sale (see How to: Protection under the Fair Trading Act).

You will also be covered by the SALE OF GOODS ACT 1908, which requires the goods sold to be of merchantable quality. However, unlike the Consumer Guarantees Act, this obligation can be overridden by the particular terms of the sale; so auctioneers frequently avoid this obligation by stating that the goods are sold "as is, where is".

Will I be able to examine the goods beforehand?

If you are planning to attend an auction you will have the opportunity to examine the goods before the auction. Goods are normally displayed for this purpose for several days beforehand.

Terms of sale

The auctioneer must make the terms of sale clear to bidders before the bidding starts. If this is not done then a buyer may not be held to these terms. The terms may be in a catalogue or be up on signs at the auction house.

The terms of sale are likely to include matters such as:

  • the buyer's premium, which is an amount (usually 10 percent) that is added to the purchase price
  • the terms of delivery
  • whether payment is to be by cash or bank cheque
  • collection of the goods

Bidding

Goods are sold by lot number; you bid on the lot that you wish to buy. The highest bid is normally accepted. If your bid is below the seller's reserve price but close to it, the auctioneer may ask you if you would like to make another offer to the seller.

If you make the final bid and the auctioneer accepts it, you have entered into a legal agreement to buy the goods.

Cautionary notes
  • Auction sales are different from other sales such as from a second-hand dealer - when you buy from a dealer you are protected by the Consumer Guarantees Act. Because your limited protection under the Sale of Goods Act is often waived in an auction sale, the goods will generally be sold "as is, where is" and you will have little redress if the goods are faulty, provided the goods matched the description under which the auctioneer sold them.


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