Many, many cars at auction are cars that broke down before the loan was paid off, so people traded them in to dealers who then turned around and sent it to auction because the car is so broken that they'd never turn a profit by fixing it and selling it on their lot. They give the owner $500 to give them something for their dead car, roll the rest of the remaining loan into the new one, then turn around and probably make $500 when the car sells for $1,000 at auction. What you see is a car that is worth $5,000, but you don't know anything about the mechanical condition of the car, so you think you're getting a deal at $1,000 when in actuality you need to invest $3,000 in a motor rebuild before it's drivable again. And, since this is your only transportation, you're going to have to find a way around while you save up your pennies.
Another thing: If you go to buy a used car from a dealer, auction sales on the Car Fax are a huge red flag and you should walk away. The dealer will insist that this is normal. The fact that they bought an auction car is not your problem and you shouldn't accept that risk.
Take it from me, I've been burned before on this line of BS. Don't let dealers gaslight you into thinking you're being unreasonable. You're not and it's YOUR choice to spend YOUR money on a car.
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