The Consequences of Bidding at an Auction and Not Paying

Consequences of Bidding at an Auction and Not Paying

If you’re thinking of bidding at an auction, it’s important to know what happens if you don’t pay. There are real consequences for not paying, and they can be serious. In some cases, you could even go to jail. So before you bid, make sure you understand the terms of the auction and are prepared to pay if you win.

What Happens if You Bid at an Auction and Don’t Pay?

There are a few different scenarios that could play out if you bid at an auction and don’t pay. The consequences will depend on the type of auction, the item you bid on, and the laws in your state or country.

For example, let’s say you bid on a car at a charity auction. The auction house requires a 10% deposit upfront, which you pay. But then, for whatever reason, you decide not to go through with the purchase. In this case, you would simply lose your deposit. The auction house would then offer the car to the next highest bidder.

Now let’s say you bid on a house at a foreclosure auction. The winning bid is typically required to be paid in cash within 24 hours. If you don’t have the cash or don’t want to go through with the purchase, tough luck—you’re still on the hook for the full amount of your bid. The bank that owns the property will sue you for payment, and if they win, they could put a lien on your own property or even garnish your wages.

In some cases, not paying for your auction purchase can even land you in jail. For example, if you fail to pay for livestock that you’ve bought at an auction, the seller can report you to law enforcement for theft. You could be facing serious charges—and possibly jail time—if convicted.


As you can see, there are real consequences for bidding at an auction and not paying. Whether you lose your deposit or end up in jail, it’s not worth it to bid unless you’re prepared to follow through with the purchase.

Make sure you understand the terms of the auction before bidding and know exactly what will happen if you don’t pay. With this knowledge in hand, you can make sure that any bids you make are ones that you’re comfortable following through on—no matter what happens after your hand goes up.