The hammer price is the number people fixate on. It is not what you pay. Between VAT, buyer's commission, admin fees, roadworthy, and registration, the true cost of an auction purchase is consistently 20–30% higher than the bid. Here is every line item, explained.
At a dealer or in a private sale, the advertised price is close to what you pay. At auction it isn't. The hammer price is the starting point, not the total. Every auction house adds costs on top — and most of those costs are a percentage of your bid, which means they scale with the vehicle price.
A buyer who wins a R150,000 bid and budgets R150,000 is going to be short. The same buyer who works backwards from a R150,000 total budget will know their maximum bid before the auction starts.
Setting a maximum bid based on what you want to spend, rather than working backwards from your total budget minus all costs. Do the maths before you register, not after you win.
Using a 10% buyer's commission (common at most major SA auction houses) and conservative estimates for post-auction costs:
Buyer's commission rates vary between auction houses. Some charge a flat percentage; others use a tiered structure where the rate drops at higher hammer prices. Always confirm the exact commission rate in the auctioneer's terms and conditions before you register — it is announced before the auction starts and published in the catalogue.
The correct approach is to start with what you can actually spend — your total budget — and subtract every cost to find your maximum bid.
Example: your total budget is R200,000. Dividing by 1.28 gives a maximum bid of R156,250. Round down to R155,000 and that is your hard ceiling. Do not exceed it regardless of what happens in the room.
If the auction house charges 15% commission instead of 10%, adjust the divisor to 1.33. If they charge 5%, use 1.23. The formula is the same — the divisor changes.
VAT at 15% is the single largest add-on at auction and the one that surprises first-time buyers most. At a private sale between two individuals, no VAT applies. At an auction — which is a VAT-registered business transaction — VAT is mandatory and is added to your bid.
On a R200,000 hammer price, VAT alone is R30,000. This is not negotiable and is not included in the bid price you place.
Commission is how auction houses make their money. It is charged on top of the hammer price and is typically 5–15% depending on the house and the vehicle category. Some auction houses charge VAT on the commission as well — meaning the commission itself attracts a further 15% on top.
Read the full terms before you register. The commission percentage must be disclosed before the auction begins, and is usually listed in the auction catalogue. If it isn't clearly stated, ask before bidding.
All auction vehicles are sold voetstoots — as is, with no warranty. Any fault you discover after the hammer falls is your problem and your cost. Even a DEKRA report or auctioneer's condition notes carry limited liability.
Budget a minimum repair contingency on every auction purchase. On an older or higher-mileage vehicle, R5,000–R10,000 is not excessive. On a late-model fleet vehicle in good condition, R2,000 may be sufficient. The point is to have a number in your budget before you bid, not to discover the cost after.
Auction houses do not sell subject to finance approval. If you win a bid and your finance application is subsequently declined, you lose your registration deposit and may be liable for the full purchase price. Pre-approval before the auction is not optional — it is a requirement of the process.
The true cost comparison is not hammer price vs dealer price. It is total auction cost vs total dealer or private sale cost.
The total add-on costs at auction are consistent and predictable. There is no excuse for not knowing your true budget ceiling before the auction starts. Work backwards from your total available funds, confirm the commission rate in the catalogue, subtract every line item, and bid to that number — not a rand above it.
The 10 checks where SA buyers lose the most money. Print it. Take it to the auction viewing day.