I went to an auction sale today and it was a bit of an eye-opening experience for me. I have been to auction sales before, but other than the few items I would find that I would be interested in purchasing, I never really paid attention to how much things were selling for and the auction was more of a social event.

The reason that I started paying attention to it today is because I had overheard several people commenting on the phenomenon that was taking place. It seemed that almost everything at that auction went for prices that were almost as much as one would pay to buy a similar item brand new.

An example of this is an extension ladder that sold for $120. A person could go to a store and buy a brand new one for around $150 and have a warranty and know that it is going to work properly. Another example is an enclosed trailer that was seven or eight years old (it was in VERY good condition though) that sold for $4,700. An individual that I was talking to at the auction was interested in that trailer and had done some research before because he knew it was going to be on the auction. He informed me that a brand new one sells for $5,000.

While there is still some savings here, you really need to ask yourself if the savings is worth the risk and drawbacks. In the case of both of these items, buying new will give you a warranty should something not work as expected. The other benefit of spending the few extra dollars to buy new is that, in the case of the trailer for example, technology has changed and the newer trailers may weigh less and pull nicer than the older models.

The lesson that can be learned from this experience is to do your research and know what you are buying. More importantly, know the value of an item that you are considering purchasing. If you know that a given item is worth a given amount of money, you will not be suckered in to paying more than new price for a used item. There were some items on the auction that did sell for more than you can go out and buy a similar item new for.