Auction Stages and Types on Copart and IAAI — In Detail

When buying cars at Copart and IAAI auctions, it's important to understand the two main stages of bidding – Pre-Bid and Live Auction. In Pre-Bid, you can place an offer in advance, and the system will automatically increase it up to the set limit – this is a good option for those who cannot participate in the Live Auction. The Live Auction is a dynamic real-time bidding process. There are also three types of sales: Pure Sale – where the highest bid automatically wins, and the vehicle must be sold, Minimum Bid – where there is a minimum price, and below it, the seller may make a counteroffer, and On Approval – where the seller decides after the auction whether to accept the offer or propose a different price. Understanding these rules allows for better auction strategy planning and helps avoid disappointments.

When buying cars at Copart and IAAI auctions, it's crucial to understand how the auction process works and the types of sales available. This knowledge helps make informed decisions, avoid misunderstandings, and better assess whether a vehicle will actually be sold at the end of the auction. In this section, we explain both the stages of the auction and the types of auctions used by sellers.

Auction Stages – How the Bidding Process Works

The auction process consists of two main stages: Pre-Bid and Live Auction.

Pre-Bid is the preliminary stage of every auction, which begins several days before the Live Auction. During this time, participants can place their bids in advance, allowing them to set a maximum price they are willing to pay for the vehicle. The system automatically increases their bid if someone places a higher bid, up to the set limit. Once the Live Auction starts, the highest Pre-Bid becomes the opening bid. Pre-Bid is useful for people who cannot attend the live auction or who want to set a bidding limit for a specific vehicle in advance. For example, if you plan to buy a car but know you won’t be available during the auction hours, you can place a bid in Pre-Bid. If your bid is the highest, it will become the basis for the live auction.

Live Auction is the actual live auction that takes place on a set day and time. Participants bid on vehicles in real-time, and the auction usually lasts from several seconds to a few minutes. It starts with an opening bid, and the auction continues until the highest bid wins. This is the most dynamic type of auction, where timing and quick reactions are crucial. For example, a car auction may begin at 2:00 PM on a given day. Participants have a set number of seconds to place their bids and raise the price.

Stage	Characteristics
Pre-Bid	The stage where bids are placed before the live auction begins. Participants can place bids on vehicles that will be auctioned later.
Live Auction	A real-time auction where participants place bids in real-time. It usually takes place at the auction site or online.

Types of Auctions – How Sellers Can Accept or Reject Offers

Pure Sale is an auction type where vehicles are listed with no minimum reserve price. This means the auction proceeds without any conditions – if no one bids higher during the auction, the vehicle may be sold for the current highest bid. The seller has no right to reject the offer, even if it seems too low. For example, if a car listed in a Pure Sale auction reaches a bid of 2,000 USD during the auction and no higher bids are placed, the car will be sold for that amount, regardless of its market value.

Minimum Bid is an auction where the seller sets a minimum price below which the vehicle cannot be sold. The auction starts with an opening bid, which is usually lower than the minimum price, but the vehicle cannot be sold for less than the seller's minimum price. This means that if the bid during the auction doesn't reach the minimum price, the auction will end without the vehicle being sold. For example, if the minimum price for a car is 4,000 USD, and the highest bid during the auction is 3,500 USD, the auction will end without the vehicle being sold, even though there is a buyer. It's important to remember that the seller can use the Counter Bid option, which allows them to make an offer in response to the highest bid if it is below the minimum price. A Counter Bid is a proposal that may approach or be below the minimum price, enabling further negotiations and possibly selling the vehicle at a mutually beneficial price.

On Approval is an auction type where the vehicle is listed for sale, but the seller reserves the right to approve or reject the sale after the auction ends. This means that even if the vehicle has the highest bid, the seller may decide not to sell it for that price. This special type of auction is often used for rare or valuable vehicles that sellers want to sell only for an appropriate amount. For example, if the auction reaches 20,000 USD, but the seller feels the vehicle should be sold for 25,000 USD, they can reject the offer. It's important to remember that the seller can use the Counter Bid option, allowing them to make a counteroffer if the bid is below the seller's expected price. A Counter Bid facilitates further negotiations and may lead to the sale of the vehicle at a price favorable to both parties.

Auction Type	Characteristics
Pure Sale	An auction with no minimum reserve price. The vehicle is sold for the highest bid, regardless of the amount.
On Minimum Bid	An auction with a minimum reserve price. The vehicle will not be sold if the price isn't reached. The seller can offer their price after the auction ends if the vehicle is unsold.
On Approval	An auction where the seller can approve or reject the sale. The seller may make a counteroffer after the auction ends.

By understanding these different stages and types of auctions, you'll be better prepared to plan your purchases at car auctions such as Copart and IAAI. Choosing the right type of auction influences your entire bidding strategy and can help avoid unnecessary disappointments.