Car Auction Stories and How to Buy Auction Cars

A Painful Car Auction Tale

This particular car auction story is both painful to recount and remember. It involves one of my own mechanics who was secretly rigging auction cars for a used car dealer, receiving payments on the side.

The Mechanic's Deception

We are uncertain about the exact duration of this scheme, but it likely spanned several months. Initially, the mechanic claimed he asked a dealer to purchase auction cars for his friends and family, which is a clear violation of car auction rules. The dealer then approached him with an offer of money to steer him towards the best cars at the auction. This arrangement evolved into the mechanic creating "gems" for the dealer.

How the Scam Worked

The mechanic would intentionally create problems in vehicles well before auction day. He would disable the vehicles in various clever ways to avoid detection, making them appear to have major drivetrain issues. Here are some examples:

1. Hydraulic Fluid Trick: The mechanic would let out the hydraulic fluid from the clutch system of a manual transmission vehicle. This would prevent the vehicle from going into gear, making it seem like it had a clutch or transmission problem. The vehicle would then be pushed through the sale and bought by his dealer associate. Later, the mechanic would visit the dealer's lot to refill and bleed the clutch system, restoring the vehicle's full retail value.

2. 2-Cycle Oil Mix: Another tactic involved adding 2-cycle oil mix to the fuel system. This would cause the vehicle to emit blue smoke, leading potential buyers to believe the engine was worn and burning oil. This was discovered after a Jaguar owner reported that his engine did not smoke until it was dropped off at the car auction. A fuel sample confirmed that just the right amount of oil was added to cause smoking while still allowing the engine to run well.

Timing and Execution

The mechanic knew when to strike. He would target times when the car auction received heavy loads of vehicles, causing the auction mechanics to be rushed in checking and preparing the vehicles. This allowed the shady mechanic to red-light a few vehicles without raising suspicion. He would then provide the dealer with the run numbers of these vehicles, so the dealer knew which ones to bid on.

The Aftermath

In the end, the mechanic was not prosecuted in exchange for revealing how the scam worked. The car auction deemed it more valuable to understand how the dealer could buy auction cars and influence mechanics to break the rules. While car auctions can be lucrative, they also lose significant amounts of money due to such fraudulent activities. Many dealers are willing to take big risks to buy auction cars cheaply.

How to Buy Auction Cars Safely

Buying cars at auctions can be a great way to get a good deal, but it's essential to be cautious. Here are some tips to help you navigate the process:

Do Your Research

1. Know the Market: Understand the market value of the cars you're interested in. Websites like Kelley Blue Book and Edmunds can provide valuable insights.

2. Check the Auction House: Research the auction house's reputation. Look for reviews and ask for references if necessary.

Inspect the Vehicle

1. Bring a Mechanic: If possible, bring a trusted mechanic to inspect the vehicle before bidding.

2. Vehicle History Report: Obtain a vehicle history report from services like Carfax to check for any past issues.

Understand the Auction Process

1. Attend a Few Auctions: Attend a few auctions as an observer before participating. This will help you understand how the process works.

2. Set a Budget: Determine your maximum bid beforehand and stick to it. It's easy to get caught up in the excitement and overspend.

Be Aware of Common Scams

1. Shill Bidding: Be cautious of shill bidding, where sellers or their associates bid on their own items to drive up the price.

2. Title Washing: Ensure the vehicle's title is clean and not "washed" to hide past damage.

Interesting Stats About Car Auctions

• Growth of Online Car Auctions: Online car auctions have seen significant growth, especially during the COVID-19 pandemic. According to a report by IBISWorld, the online car auction industry in the U.S. grew by 12.3% in 2020.

• Average Savings: Buyers can save an average of 20-30% on the market value of a vehicle by purchasing at an auction, according to Manheim, one of the largest car auction companies in the world.

• Fraud Incidents: A study by the National Insurance Crime Bureau (NICB) found that vehicle fraud incidents, including title washing and odometer fraud, increased by 25% from 2018 to 2020.

By understanding the potential pitfalls and taking the necessary precautions, you can successfully navigate the car auction process and secure a great deal on your next vehicle.