Fancy a new Mini for under a tenner? How about an iPod shuffle for sixpence? If so, try a few 'reverse auction' websites. They may take a little getting used to, but you can pick up some astonishing bargains, says Merryn Somerset Webb.
Most of those of us who fancy a new car this year are just not getting one. A survey out this week showed that 77% of buyers expect the current financial climate to "drastically change their car-buying plans". And that's when car sales have already plummeted and several car manufacturers have moved to cut production dramatically.
But what if you could get a new car a brand new car for £6.83? That would change your car buying plans pretty dramatically too, wouldn't it? Just in rather a different direction from the way the credit crunch has changed them. Take then the case of Sandeep Anantharaman, a 26-year-old profiled in The Sunday Times this week. In September he bought a new Mini One (list price £12,135) for just under £7. At the same time he picked up a Tom Tom navigation system for 10p (list price around £120) and an iPod Shuffle for 6p.
Look to 'reverse auction' sites for the best bargains
How did he get his hands on these amazing bargains? By visiting madbid.com, one of the many auction sites popping up all over the internet to cater to the need for cash-strapped consumers to save money and the need for very-cash-strapped retailers to shift stock in a hurry. The best bargains are available, says the Sunday Times, from so-called 'reverse auction' sites. All auction sites work in slightly different ways (and most outline them pretty clearly on their sites) but the basic principle of a reverse auction is this: instead of aiming to put in the highest bid, as in a conventional auction, bidders need to make the lowest unique bid. So if you bid 3p for something, you won't necessarily win it, even if it is the lowest bid. You'll only win if no one else has bid 3p. If someone else bid 5p but was the only person who bid 5p they would win instead.
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For new cars, try Autoebid.com says Whatcar. On average, using this reverse auction site on which dealers bid each other down to win your business after you have specified the model you want and the price you are prepared to pay saves buyers around 24% or £3,000 on the list price of a new car. Given how over-priced the UK car market still is relative to those in Europe, you'd be mad not to give this a go if you are serious about buying a new car at the moment.
For technology, there is the site of Mr Anantharama's triumph, madbid.com. This isn't a reverse auction site, but one on which prices start at nothing and users bid against each other in 1p increments until the time allotted to each auction (which can be under a minute) runs out. That might sound a bit stressful for some of us, but brave it and you could find yourself the owner of a very cheap bit of kit: there probably won't be very many Minis available for £7, but plenty of bidders apparently find themselves holding Nintendo Wiis and various laptops for a fraction of their list prices.
When I popped on the site earlier today, someone had just paid £1.74 for £50 in cash and there were 12 seconds left on an auction for a Sony Vaio laptop. If I understood the system correctly, it went for £10.94, which, given that I have just spilt a large glass of water over my own laptop, (for which I paid well over £2,000) makes me think I'll be visiting the site again later today.
Otherwise, there is bidandclick.com which sells mostly computer consoles and TVs - a Samsung flat-screen TV just went for £16.31, says the Sunday Times - and Humraz.com which, while it was originally set up to shift houses, also sells shopping and gift vouchers.
A little thing to watch out for
A much-mentioned recent sale? A £300 Harrods voucher for a mere 92p. Note, however, that the buyer will have paid a bit more than that. At Humraz you have to buy the right in the form of a 'seat' to bid. So while bidding for the Harrod's voucher probably only cost a few quid, seats for such things as travel vouchers worth thousands can cost £40 plus, while a seat at the auction for a rather lovely looking two-bedroom flat ("with secluded garden") in Highgate will set you back £120; and one for a 100-gramme bar of bullion, £32. So if you don't get your bidding right, you could find looking for cheap stuff on auction sites is an expensive business.
On the plus side, Humraz has responded to the very high level of interest in its business by temporarily replacing its homepage with very comprehensive instructions on how the site works and a 'practice auction' facility. So if you fancy your very own Harrods voucher, now is the time to get practising: there's a £1,000 one coming up for auction soon.
This article is taken from Merryn Somerset Webb's weekly Money Sense email.Sign up to Money Sense here.
P.S. Merryn's book, Love is Not Enough: The Smart Woman's Guide to Money, is now out in paperback.
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Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).
After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times
Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast - but still writes for Moneyweek monthly.
Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.
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