It is no secret that online auto auctions give people a convenient way to buy their favorite cars at remarkably low prices. As a result, the number of people turning to online auto auctions is increasing by the day. That said, people still have a lot of doubts and misconceptions about online insurance auto auctions, because of which they hesitate to proceed further. One such concern people have is the “security deposit.” If you too have your share of doubts about security deposits asked by insurance auto auctions, this article is for you. Read on as we present all you need to know about a salvage auto auction security deposit.
What is a security deposit?
You need to understand that a lot of people are attracted to salvage vehicles and many of them end up placing their bids too. That said, not everyone sees the transaction through to completion. Many people do not make the purchase even after winning in an auction. To prevent such scenarios, all leading auction websites require the bidders to make a security deposit, which serves two purposes:
- It serves as a guarantee that the bidder will make the purchase if their bid wins
- It is used by auction websites to decide a buyer’s bidding power or limit
How is a security deposit made?
Different auction websites can have different ways to collect security deposits. Salvagebid, for instance, accepts two modes of payment – wire transfer and bank cards (credit and debit).
When a credit card is used for the security deposit, the funds are typically not immediately withdrawn from the account. Instead, they are temporarily held as a “pending authorization,” securing the specified amount.
If the bidder emerges as the auction winner but fails to finalize the purchase or has an outstanding balance, the security deposit may be forfeited. In such cases, the pending authorization is lifted, allowing the account to be charged for the entire security deposit.
Is the security deposit refundable?
Yes, all leading auto auction platforms, including Salvagebid, gives buyers the option to claim a full refund of their security deposit, in case they are unable to find a suitable vehicle or even change their mind about buying a vehicle. That said, a security deposit is not refunded if a buyer’s bid wins an auction and they later decide not to go ahead with the purchase.
The Last Word
All in all, a security deposit is just a form of guarantee to ensure the seriousness of wishful buyers, and can also be fully refunded. Whether you are looking to buy a clean title vehicle for personal use or a salvage title vehicle for your next restoration project, Salvagebid has got you covered. Placed among the leading platforms hosting insurance auto auctions, Salvagebid gives you access to the largest auto auction inventory in North America. If you have any questions about our online auto auctions, simply call: +1 (360) 347-1300 or email at: [email protected].