Farm Equipment Auctions: How They Work

Auctions can bring a good price for both sides, but they move fast and the terms are strict. Preparation separates a good buy from an expensive lesson.

Key points

Set a maximum price including fees and transport before the sale.
Inspect at the preview, because auction equipment is usually as is.
Read the auction terms for payment, fees and pickup deadlines.
Arrange insurance and transport before you bid.

How does a farm equipment auction work?

Equipment is sold to the highest bidder on a set day, either in person, online or both. There is usually a preview period before the sale when buyers can look at the machines. On sale day, an auctioneer calls the bids and the final bid wins, subject to any reserve the seller has set.

Auction companies set their own rules and fees, so read the terms for each sale. They are usually posted on the auction company's materials or website.

Online bidding has made auctions more common for small buyers, but the same rules of inspection and preparation apply, and you may not be able to see the machine in person.

What should you do before the auction?

Do your homework before you go. Decide what you need, set a maximum price for each item and stick to it. Research what comparable machines sell for in your area, so you can tell a bargain from a trap.

Visit the preview and inspect equipment closely. Ask the auction staff what is known about each machine's history.

Register early and ask what ID or deposit is required
Learn the buyer's fees and any taxes added to the bid
Read the terms about payment, pickup deadlines and removal
Check whether the sale is absolute or has reserves
Bring a knowledgeable friend or mechanic if you can
Arrange a trailer and transport in advance

How do you inspect equipment at an auction preview?

Most auction equipment is sold as is, with no warranty. That means every problem you miss becomes your problem. Take time with each machine and a checklist.

Look at the machine from the ground up, check fluids and leaks, test controls where allowed and look for signs of hard use or neglect.

If you cannot attend the preview, ask the auction company for photos and any known history, and consider sending a trusted mechanic in your place.

Fluid levels, color and signs of leaks
Condition of tires, hoses, belts and guards
Hour meter reading compared with overall wear
Presence of ROPS, seat belt and shields
Cold start behavior if you are allowed to try it
Serial numbers, to check title and records

What does as-is mean at an auction?

As is means the seller and auction company make no promise about condition. Once the auctioneer says sold, the machine is yours, along with any hidden faults. There is usually no return.

Budget for repairs, and plan to have a qualified mechanic examine the machine soon after purchase, before you put it to heavy use.

Some auctions announce known problems from the block, and some do not. Listen carefully to every announcement, since they can change the value of a machine in seconds.

How should you bid without overspending?

Auctions are built to create excitement. Decide your top price in advance, including fees and transport, and stop when the bidding reaches it. Another bidder may want it more, and that is acceptable.

Watch how the first few lots sell, since this gives you a feel for the crowd and the market that day.

Do not bid on items you have not inspected, and do not chase a lot after your limit has passed. There will be another sale.

What happens after you win a bid?

You will pay according to the auction's terms and receive paperwork to prove ownership. Check that serial numbers match and that any title or registration papers are included. Arrange pickup within the deadline, and use a trailer and tie-downs rated for the machine. Check your state DOT rules for hauling.

Call your insurance agent before moving the machine to your place, so coverage is in force from the moment you take it.

Keep receipts for the machine, the fees and the transport. Your accountant will want them, and you will want them if you sell the machine later.

How do you sell equipment at an auction?

Sellers should clean the machine, gather service records and give the auction company accurate information. Ask about commission, fees, reserves and how soon you are paid. An honest description protects you from later disputes.

Ask the auctioneer how similar equipment has done recently, so you can set realistic expectations. An accountant can help with how the sale affects your records and taxes.

When to get help: Bring a qualified mechanic to a preview if you can, and have the machine checked soon after purchase. Ask your insurance agent about coverage in transit, your state DOT about hauling rules, and your accountant about records and taxes on a sale.

Sources and further reading

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