Auctions can be great places to purchase a car at a great price. However, cars bought at auction may not come without any warranties or guarantees, so you should always be aware of what you're getting into before you buy.

If you've never been to a car or auto auction before, you should attend one before you plan to bid and buy. Watch and observe, learning all you can about the auction process, what terms mean and how much money you should expect to pay for a vehicle there.

The basic types of auto auctions are:

1. Online auto auctions like eBay Motors and Yahoo Auctions

2. Wholesale Auto Auctions, dealer-to-dealer

3. Public Auto Auctions

4. Police and Government Auctions

5. Insurance and Salvage Auto Auctions for dealers

Purchase a quality used car price guide, like Kelley Blue Book or NADA, and familiarize yourself with it. Research the makes and models you are interested in purchasing.

Bring a friend or family member with you to the auction. If they know about cars, all the better!

Since auctions move quickly once they begin, having a companion with you will also help you keep track of everything that's going on.

Make sure whomever you bring knows what the maximum amount is you are willing to spend so they can keep you within your limit if you get carried away.

Most auctions open their doors an hour or two before bidding begins. Get there early so you have a chance to review the cars for sale before you decide to bid on one.

1. When you find a car you want, inspect it thoroughly for damage or flaws. Open all of the doors, the hood, the trunk and make sure all of the vehicle identification numbers (VIN) match.

2. Make note of the lot number.

3. Consult your price guide and be aware that you may have to pay a "buyer's premium" of anywhere from five to 10 percent on top of the price you bid on the car.

There are some common items that affect a car's value that you should look for when examining the auction's vehicles:

• Bald or uneven tire wear
  
• Damaged wheel rims on one side of the car only
  
• Rebuilt or nonexistent titles
  
• VIN numbers do not match
  
• Rusty disk brakes and drums
  
• Excessive scratches, dings and dents
  
• Variations in paint thickness
  
• Evidence of leaks
  
• Loose or crooked windows
  
• Power windows that don't work
  
• Malfunctioning convertible top
  
• Excessive exhaust
  
• Malfunctioning A/C
  
• Odometer tampering
  
• Excessive mileage for the car's age
  

During the auction, position yourself so you can see all the action. 

1. Be aware what lots are up for bidding and be prepared to bid when the car of your choice comes up.

2. Listen carefully to the auctioneer to determine the increments the bidding is increasing by.

3. When you bid, raise your hand high and confidently to make sure you are seen by the auctioneer.

4. Stick to your maximum bid and avoid the temptation to get into a bidding war with another attendee. If the bid exceeds your maximum, lower your hand to indicate you will not bid any higher.

If possible, get an report on the vehicle you are interested in before bidding at sites like AutoCheck Report. All you will need is the VIN of the car of interest.

The bidding area will usually have several lanes going at once, each with its own auction running. The auctioneer will be talking fast. Helpers will be in the lanes watching for your bid.

There will usually be a traffic light with red, yellow and green lights behind the auctioneer, indicating the status of the car's title. A red light means there are issues with the title, such as the mileage is wrong or the car has been rebuilt. A yellow light usually means the title is in transit or there is some frame damage, though not enough to brand the title. A green light means everything is perfectly okay with the title.

Make sure when your purchase is written up, the color of the light is indicated on your contract. If it's labeled green and you find issues after purchase, you will be able to sell it back.

Make sure the contract states how many days before you get the title. If it takes longer than stated, you can get your money back.