It was the first Tuesday of the month and 635 people gathered yesterday on a muddy gravel lot in Far Southeast Washington to try to find a bargain car, or merely one that would start. The occasion was the D.C. police department's monthly auction of abandoned cars, an old-car lover's treasure of dented fenders, flat tires and smashed windshields.

The car buyers came from throughout the Washington area, plunked down their $50 entrance fee at the gates of the Blue Plains Impoundment Lot and then searched for the car of their dreams, or perhaps only what their pocketbook could afford.

Yesterday, after a five-hour auction, about 400 of them left with one or more cars. Or at least the promise of one, considering the fact that there were no keys for the cars and some of the cars couldn't be coaxed into starting with under-the-hood mechanical wizardry.

"I need a car and I can't afford one now," said Ruby Rusten, a Takoma Park resident who pinned her hopes on "something small," like a Camaro or Vega.

"I know I'm not going to go up to $1,000 with no guarantee. You hate to get something and then have it not work," she said. As other interested buyers approached the maroon Camaro that Rusten wanted, she said she felt no comfort from knowing the previous Camaro sold for $625. But she was outbid for the maroon Camaro.

The cars were towed to the impoundment lot by city workers and are left there for at least 60 days and sometimes as long as six months before they are put up for sale. Their owners receive at least three notices of the impending sale of their vehicles, including a registered letter from the impoundment officials.

The surprise at yesterday's auction was that two full-size Fords went for $2,500 and $2,700 each. Usually only smaller cars bring such prices. "They must have been in relatively good shape.Some of these surprise you," said Sgt. Edward Reddick, the impoundment lot's assistant property manager.

Many would-be buyers were more than a little shocked at the prices gas-guzzling Thunderbirds and beat-up cars brought. A 1974 Thunderbird, unbent, peach-brown and dirty, sold for $575, while a few cars later, a gray Thunderbird only a few years newer, with a hood smashed up to the windshield, a broken fender and a flat tire, sold for $675 in a 2-minute bidding war that looked as though it would never end.

Neither bidder involved in the price-haggling over the gray Thunderbird would comment on the bidding but onlookers did with several shakes of their heads and wondrous looks.

Some of the buyers were car collectors or owners of used car lots who said they would make necessary repairs to the vehicles and sell them at 1,000 percent profits. For them, buying a car at an auction meant bidding $35 or $50, rarely more. Joseph Green, 37, a beginning antique sportscar collector, set his eyes on a dusty, dark green 1963 Triump that would match his 1965 model.

"I guess it will go for $50," the Forestville resident said about his possible buy. A short while later in a 90-second bid, Green paid $180 for the Triumph. "Well, it's more than I expected to pay, but it's worth it," he said laughing.

At the end of the auction, the unsuccessful lookers collect their $50 deposit at the exist and the buyers pay the cash cost of their car minus the deposit.

"You can't change your mind after you're bought a car and say you don't have any money because we know you have at least $50," said Reddick.