Car dealers hate us... You'll Love us! Search CarBuyingTips.com Buying New Cars How To Buy New Cars Buy Cars Online First Time Car Buying Tips Extended Auto Warranty Tips Hybrid Car Buying Tips Canadian Car Buying Tips Top 10 Car Dealer Scams Military Personel Car Buying Our Reader's New Car Deals Auto Finance Auto Loans, Tips & Scams Auto Refinance Tips & Scams Bad Credit Auto Loan Tips Used Car Loan Tips Get Your Credit Report Online Used Cars Used Car History Reports How To Buy Used Cars Help Fight Odometer Fraud Selling Your Used Car Used Car Classifieds Auto Auction Buying Tips Car Insurance Car Insurance Buying Tips Auto Leasing New Car Leasing Tips ALG Residual Values Car Leasing Software Reviews Government Sites Attorney General Sites DMV Sites - All 50 States Drivers License Sites Take A Break New Car Dealers - Ratings Rate Your Dealer Experience Free Spreadsheet Downloads Humor: Alternate Car Names RV Buying Tips & Scams How To Jump Start A Car LoserCars.com Crash Of The Month Gallery Furniture Buying Tips	Click Here for info on live online auto auctions	Jeff's $avOmeterTM $11,607,483 Add your savings HERE!
	Guide To Used Car Auto Auctions Consumer tips for buying used cars at car auctions, and avoiding scams. In This Chapter: We'll review the basic types of car auctions, give the pros and cons of each auto auction, the scams you may encounter, how to tell if a car has been damaged and repaired, or flooded. We'll help you answer the question "should I try to buy a car from an auto auction?". You'll also find the most comprehensive resource on the web with information on car title checks, spotting stolen cars, flooded cars, and rebuilt wrecks, airbag and other scams to avoid. We'll show you how to run an AutoCheck Vehicle History Report (car title search) to find out a used car's dirty past and avoid huge losses. We'll cover buying cars from online auto auctions like eBay Motors, and Yahoo Auctions, Manheim Auctions, Police Seized Car Auctions, and Salvage Auctions. Warning for All Used Car Buyers 8/29/2005: Hurricane Katrina Floods 571,000 Cars In Gulf Coast. Not too many people are worried about flooded cars, but it's one of the top issues you should be worried about. In the Gulf Coast 571,000 cars were flooded. Thousands of cars and trucks were abandoned as rising waters flooded New Orleans and surrounding areas. By law, the titles of these cars will be "totaled" or branded as "flooded" by insurance companies, and many will be laundered back to used car status in these states or others. Don't think that because you live in another state that you are immune to the scams that arise out of mass vehicle floods. Always run an AutoCheck title check before buying a used car. Don't buy someone's flooded car. These types of cars almost always end up at auctions. Flooded cars may have lower asking prices so be suspicious and always run a Vehicle History Report. The Definition Of An Auction According to the dictionary, here is the definition of an auction: auc·tion (ôk-shen), noun. "A public sale in which property or items of merchandise are sold to the highest bidder." Sounds simple enough, but this one word causes more excitement, confusion, hardship, happiness, disappointment, misconceptions, lying, and cheating than the word "love". When you take out an ad in the paper to sell your car, that's sort of an auction too, because you eventually sell it to the highest bidder. What 2 things must you do when you buy a car at an auction? 1) Run an AutoCheck Vehicle History Report on the vehicle's VIN# BEFORE you buy it. 2) Buy a Used Car Extended Warranty. Read Extended Warranty Scams & Tips. We'll review extended car warranty companies like Warranty Direct.

At auctions, it's every man for himself
Although laws in this country may have been intended to protect the consumer, they really do not protect consumers like you and me, they protect the guy who rips off the consumer. Powerful 2 word phrases like "As Is", make an excellent defense lawyer for some sellers. At some auctions, you can pay a fee to guarantee the engine, frame, and body for 30 days. But the phrase "Buyer Beware" is most important at auctions, because you don't have time to take the car to a mechanic, the cars are usually sold "As Is" with no warranty, and the deal is final unless the title turns out to be fraudulent. Sellers are free to make all sorts of verbal promises, without putting it in writing. Without a written contract, it's your word against theirs, and they always win. So especially at auctions, assume the worst case. If you get bad vibes about something, go with your instinct. Don't be stupid and think that the pillars of justice will undo any scams that are unleashed upon you, that's a pipe dream. You need to be proactive, not reactive, and take all necessary steps to up front to protect yourself, so that you won't end up in the position where you'll need legal help. Lawyers won't talk to you, a used car is not worth their trouble. The state attorney could care less about you. Please don't let this happen to you:

Many auto auctions use a bare bones car title check, while many do no car title check at all. The car auction thus provides you with nothing to guarantee you that the title is clean. Auto auctions try to cut cost and run the cheaper bare bones title checks, some of which are not very thorough at all. In my opinion no one has a more thorough car title check than AutoCheck, I don't care what any auction says. In the game of buyer beware, the AutoCheck Report is the most powerful weapon that you and I have to protect ourselves against fraud. Remember what I said, buyer beware. Keep in mind that the auction has a vested interest in selling the car. Don't take anyone's word for it, not even mine, always run your our own car title check.

The price you pay for the car is always higher than what you bid!
Don't forget that on top of your winning bid at the auto auction, there is usually a buyer's premium. Sometimes the premium is only a few hundred dollars, sometimes it's 5% of the winning bid, sometimes it's 10% of the winning bid. This means if there is a 5% buyer's premium and you just won the $20,000 bidding war on a used Lexus, you now have to pay $1,000 on top of that to the auction house running this car auction. When you're caught up in a bidding war, it's easy to forget that you have a buyers premium to pay also, and when you're done, the addition of the buyers premium takes the car over fair market value. Oops! The whole idea of an auto auction is to buy a used car at a significant savings below fair market value, otherwise you could just go buy that same car from a private seller, take your time, and do it right.

What About Buying Used Cars From Car Rental Agencies Instead?
Keep in mind, a rental car is a used car, just like any other car. But we feel rental cars are probably maintained better than many privately owned cars, as they are kept in constant care and maintenance during use. When you rent a car from the top companies, they are clean, and I have never had a rental car break down. The companies tend to take them out of service by one to two years of age, so you are getting a decent car which the rental company has already absorbed the largest portion of the depreciation.. But all our rules for buying used cars still apply, because they are used cars. The used cars from car rental agencies usually still have their factory warranties in affect. Some car rental agencies may offer you a free limited warranty on used cars. If you want full coverage, read our article on Extended Warranty Scams & Tips. One last point, they may not be willing to haggle over the price, so make sure you know the value of that car before you visit them.

Auctions can be dangerous because that's where the junked, flooded, and rebuilt cars are most likely to be found.

Basic Types Of Auto Auctions
There are many different types of car auctions out there. But there are 5 main categories of auctions that we'll cover here, as these apply to the most amount of people. These are:

• Online auto auctions like eBay Motors auto auctions and Yahoo Auctions.
• Wholesale Auto Auctions (Usually dealer to dealer type auctions)
• Public Auto Auctions (Open to any sucker. Oops, I meant consumer).
• Police Auctions & Government Auctions (Usually open to anyone)
• Insurance Auto Auctions & Salvage Auto Auctions (Usually open to only to dealers)

Online Auto Auctions

eBay Auctions and Yahoo Auctions
All the car auction tips in this chapter apply to the eBay auto auctions as well. The correct name for eBay car auctions is eBay Motors. Try to get the VIN of the car you are bidding on from the seller on eBay so that you can run the AutoCheck Vehicle History Report before you even decide whether or not to bid on the car. Just like e Bay Auctions, the same goes for any cars that you plan to bid on at Yahoo auctions as well. You must keep in mind that if you are the wining bidder at eBay Motors, you are contractually obligated to buy that vehicle. So don't bid on it unless you are 100% prepared to buy it. You might want to use eBay's escrow service, where a trust account is setup and the seller is not paid until you receive the car. The buyer and seller can also agree on an inspection period so that you can have a certified mechanic inspect the car and determine if there is any unsatisfactory damages, or needed repairs that were not disclosed by the seller. These are all the hassles you go through when you cannot see the car in person before you bid.

Keep in mind that bidding on a car at eBay Motors is no different than buying a used car from someone through the Auto Trader. You must still know the blue book value of that used car, and don't bid too high. Bid with your brain, not your heart. If you see the price of the car shooting up, just walk away. Your goal is to get that car for less than blue book fair market value, or it's not worth it. You might as well buy a car locally out of the used car classifieds. In order to make all the risk and effort worthwhile, the eBay Motors auction price must be less than you could get it locally from the classifieds.

Caveats to watch out for on eBay auctions and Yahoo Auctions:

• You cannot see the car in person. You are contractually obligated to buy a car you have not seen.
• Some sellers don't list a VIN# of the car, or they list a fake VIN#. You must run a used car title check on the VIN# to verify.
• Some sellers don't list the correct engine configuration, or even the correct model or year. An AutoCheck Vehicle History Report will straighten that out.
• Sellers can get 20 people to lie and hype up their rating, or shill bid, which means falsely bidding the price of the car up.
• You may have to go cross country to pick up the car, or pay shipping fees, which can approach $1000.

Wholesale Auto Auctions & Manheim Car Auctions
These car auctions are for car dealers only, usually run by Manheim car auctions, and the general public is not allowed to attend. The cars at the Manheim auto auctions fall into these categories:

• Cars that are returned after their lease expires.
• Rental Cars from car rental agencies.
• Brands of used cars that a dealer received as a trade in, but does not normally sell.
• A new hot seller that a dealer may be able to sell over MSRP in the car auctions.
• Exotic cars, either new or used, that some collector dealers are trying to sell.
• Used cars over 4 years old that most major dealers don't want on their lots.

Florida Car Auctions: Can't I just get into a wholesale auto auction and buy my car there?
All these tips apply whether you're at Florida car auctions, California car auctions, New York car auctions, Ohio car auctions. No you can't waltz in there like you're going to Disney World. You have to be a licensed dealer to get into wholesale car auctions, even if you only sell a few cars a month out of your house, you still need to be licensed. In fact, you cannot even view any information on the Manheim Auto Auctions web sites unless you are signed up with them as a registered dealer. To become a registered car dealer is pretty tough. For example, in Florida, you must complete a 2 day school, take a car dealer test, get yourself bonded, get a Tax ID, get approved by your city, buy insurance, you must have a clean record, then you need an occupational license, costing $150. You need warehouse space, this adds hundreds to thousands of dollars per month, and all this is on the cheap side of guessing the total cost. Then there are audits from the sales tax people. Some dealers used to sneak their clients in but many auctions have already taken steps to prevent that from happening. So the average Joe can forget about getting into this type of auction to get their car. But if you can get in, this is the preferred type of auction to get your next car. You'll have to be able to work out with your dealer friend how the car will be paid, since auctions usually require payment in full on the spot. But if you can get in, the Manheim car auctions are considered top notch. Their Highline auctions are very well regarded, but you still have to beware that rebuilt cars are still passed through these auctions, and the red light occasionally comes on at their auctions just like any other.

One way you can get a car from wholesale auto auctions.
Hopefully you know a licensed private dealer who can get into these auctions, and they can get the advance list of all the cars they plan to auction off that day. Then you can tell your dealer friend which car you want and how much to pay for it. The dealer will most likely want something for their trouble.

How dealers know how much to bid: The Little Black Book
Some guys use a little black book for phone numbers of their girlfriends. At the wholesale auto auctions however, this has a completely different meaning. You'll see dealers walking around with their "Black Books", which is a pocket sized, subscription based mini car pricing book updated at least monthly with regional selling prices from wholesale auto auctions. It's like a Kelley Blue Book for auto auctions. It lists most vehicle makes, and models, and what they should sell for if the vehicle is in bad, fair or good condition. Ideally, the dealers would like to bid on a car and pay less than the black book price for the car, to be sure they are getting a good deal. Many other dealers will use the NADA guide for their pricing. At one wholesale auction I attended, I noted many dealers getting cars for $500 - $1500 below Black Book value, which is really good for them. When they resell the car for fair market value, they will maximize their investment.

You can't just walk the down the row of cars at an auction and determine what it's worth, because the car is only worth as much as the winning bid. The buyers determine that. The pricing books might say that Mercedes is worth $50,000 and you would be foolish to bid that much if the bidding only reaches $47,000 and maybe the seller accepts. Then you were $3,000 to high, and you would have left money on the table. That's why bidding typically starts way less than the published value. By using the Black Book, many bidders have a goal of what price range to shoot for, and usually end up getting slightly less than the book value on a car. Other factors affect the price too, like regional areas, that's why many used car pricing sites ask for the zip code before they. In Florida, black cars will not bid as high as silver, because black cars get too hot. Up north, SUVs and trucks tend to sell higher as winter approaches, and less as summer approaches.

Selling cars at an auto auction
If you're a dealer selling cars at an auto auction it's like a game of poker. The vehicles that you transport to the car auctions are your deck of cards. Everyone is calling everyone else's bluff, and you must convince the bidders that your car is worth the minimum opening bid. You sure don't want to have to drive a transport full of unsold cars all the way back home, it could be a long, lonely ride. If you do sell a vehicle the auto auction house might charge you a $250 sellers fee, depending on the auction house. Sometimes it could be a percent of the sale. If your car does not sell, they still charge you a fee anyway, so life really sucks for a seller who transports several cars to an auction and does not sell any. I feel your pain!

Never try to auction your car at a wholesale auto auction
Unless you have a rare car that is worth something, always retail it on the open market, because auction prices are wholesale, near trade in value, and much less than fair market value. Only auction your car if you need to dump it fast. Don't let your finances get you into the position where you need to unload your car fast, you'll lose the maximum amount of money that way.

Beauty is only skin deep!
Some bidders at car auctions are smart and don't take any chances. They use a clever $549 device called the Elcometer digital coating thickness gauge to measure the thickness of the paint. This tool is simple, you just touch it to the car's painted surfaces, and the LCD readout tells you how thick the paint is. This is useful in flagging cars that have had body work done. You see, the factory paint jobs are usually 4.5 mils thick. When a body shop paints a panel, their process is not refined like the factory, and they often paint over existing paint, doubling the thickness. Once your LCD readout hits the 8-12 mil range, you know that body work was done on this car. As each car in the auction drives up the auction lane to be bid on, you'll see a group of dealers rush up to it and start placing their Elcometer on all the major panels, doors, hood, and trunk, looking for "evidence" of body work.

Some of the better auctions have the mileage written on the windshields so you can rapidly walk up a row of cars in the lot and determine if it meets your mileage requirements without having to open each car up and check the odometer. If the car had previously been in a wreck, sometimes the windshield will have the word "Unibody" written on it, indicating prior accident damage that had been repaired. Mercedes and BMW leasing companies usually do this, GM usually does not. Beware of cars with more than 12,000 miles per year on the odometer. They should bid for much less than similar models with lower mileage.

Get Yourself An Extended Warranty For That used Car
Get an extended warranty whenever you buy a used car. We'll review extended car warranty companies like Warranty Direct. Be sure to read our chapter on Extended Warranty Scams & Tips. If you buy a used car and an extended warranty, and if the car is found to have a salvaged title, it will void your extended warranty. You'll be out several hundred dollars. We also link to DMV Web Sites For All 50 States.

Run A Vehicle History Report Before You Buy That Used Car
A popular site for car title checks is AutoCheck. You MUST run this report if you buy a used car so you don't get scammed. You have been warned. I just love receiving email from our visitors when they find out the used car they almost bought was a rebuilt wreck. One visitor told me he saved himself $7500. You can find the VIN# on the a plate on the dashboard by looking through the windshield. Some cars also have the 17 digit VIN# printed on stickers on the drivers side door, trunk, other doors.

If you plan to buy a car made before 1981...
No one can get you a car title report for a car before 1981, as the 17 digit VIN did not become standard until 1981. Every car manufacturer had their own format, and each state tracked them differently with unique formats, so you're out of luck Why the heck are you buying a car that old anyway?

Where can you get a VIN decoder?
Many people ask this. The software to decode a VIN is prohibitively expensive. Some car fan pages decode a VIN only on one particular car. But one good benefit of the AutoCheck Vehicle History Report is that part of their report includes a VIN decode on your car including the model, options, year, engine size and type, drive train info, country of manufacture, EPA gas mileage, etc.

For car history reports, don't just run an AutoCheck Free VIN check and think your job is done. That's just a teaser showing you how many records exist for that car, so run the full AutoCheck Vehicle History Report. AutoCheck also has an excellent buyback guarantee. If for some reason a problem title is later found on a vehicle that shows a "Clean Title" in their system, AutoCheck will buy back the vehicle from you. The average person looks at 7-10 used cars before they buy, so I chose the premium account. This allows you to check the history of every used car you are shopping for. I highly recommend that one. You want to be certain the used car you are about to buy did not come from an auto salvage auction, or had the odometer rolled back, fire damage, flood damage, or was reported stolen. I know people who paid cash for their used car and went to the DMV, then discovered it had been stolen. These problems can be avoided by running the history report.

The auto auction process
Usually at the bidding area there are several lanes going at once, each with its own auction running. Typical of auctions, the auctioneer is talking very fast, in fact, too fast for most people to understand what they are saying. It takes you about 20 minutes to get used to it. They sometimes have helpers in the lanes watching for your bid. As the car drives up the lane to be bid on, flocks of potential buyers will come up to it, you'll see several buyers rub their Elcometers on the paint to determine thickness, and they'll sometimes open the hood and trunk to check for signs of body damage. This is not the time to evaluate the car you are about to buy. That is why you should arrive early before the auction starts to view the car.

Red Light, Green Light
Behind the auctioneer is usually a traffic light with Red, Yellow, and Green lights. These lights are used to indicate the status of the car's title. Make sure when they write up your purchase that they indicate the color of the light on your contract. If they say it's green, that title better not have any issues. The classier Highline auctions would probably take back the car if something went wrong there, but for other auctions, who knows.

• Red Light - Usually means there are issues with the title, rebuilt, not actual mileage, or some other problem. This is important, because you would not expect to pay as much for that car as one which had not been in a wreck. At wholesale auctions as the cars come up to the block, the ones with bad titles trigger the red title warning light to come on over the auction box. At this point, usually 50% of the bidders take off. The remaining 50% don't know what the heck to do, and the price ends up dropping usually 30%. The reason is a rebuilt car is just bad news. It's one thing to have a quarter panel replaced or door dent removed, but a rebuilt title means something very bad happened to this car. It means the car was totaled in an accident, then rebuilt, and the title was "branded" back to used car status again.
  
  
• Yellow Light - Usually means the title is in transit, or there is some frame damage, but not enough to brand the title, and Usually the seller is right there next to the podium and they have the owners manual and title ready to hand over to you, and you settle in the closing room. Ideally, when you buy at a car auction, you'd like to have the title right there, since you are required to pay in full on the spot. Unfortunately, many titles at auctions are "in transit". That stinks because you would like to have the title there on the spot so you can drive home in your new purchase. They expect you to pay in full for that car now, yet they won't give you the title now. Sounds very lopsided. Each car is usually on the auction block for about a minute or 2, and the bidding moves fast. There's a couple of hundred cars there, and they have to get them all through. If the car does not sell, they just roll it right on out the door and the next one comes in. Sometimes they will pass cars through the auction lines a few times hoping they will sell.
  
  
• Green Light - means everything is OK with the title.

Flood Warning
If the car had been flooded after a hurricane and there was salt water, everything is corroding right now, and electrical components that work now, will soon fail. Repaired struts could break on you after they were fixed. If the roof was welded back on after a rollover, and the car flips, you may not have the roof strength you once had.

Everybody Lies
You need to remember this at auctions, everybody lies. They lie about how much money they have invested in the car, they lie about prior accidents, claiming "not to my knowledge", or "the previous owner assured me the damage from the wreck was minor". They all skirt the law by hiding behind open ended statements like that, and "AS IS" documents that they make you sign, so remember, everybody lies, trust no one, the only person looking out for you is you. In fact, even I'm lying right now!

Prices seen at a wholesale Florida car auction
This table below shows some auction bidding prices seen at a wholesale auction in April, 2001. You'll note a couple of issues here. During bad economic times like the dot com shake out of 2000 and 2001, no one wanted the high priced cars over $50,000, because everyone lost their butts on the stock market, then got laid off. We saw numerous Mercedes CLK cars go through the auction without even a bid, as did high end Porsches, Jaguars, and Ferraris, indicating a softening market for luxury cars at the time. But look below at the cars that did sell: The Lexus cars, far cheaper, coming off lease, typically sold for $27,000 or less. These cars at the time were $30k to $32k in the dealers. So those were good bargains, as were Infiniti and BMW 3 series. But off color BMW Z3 cars were like a cancer that no one wanted.

Salvage Auctions (also known as insurance auto auctions)
Salvage auto auctions are a whole different ball game from public car auctions, wholesale auto auctions, or government auctions. In fact, these auctions are not open to the public. This is because of the serious nature of the damage to these cars, and only experienced professionals who know what they are doing should be buying from these auto salvage auctions. So where do they get salvage cars from? When your car is involved in an accident there may be severe damage to it. Each state has their own laws, but if your car's damage estimate is more than 75% of the car's value, then usually the law requires the insurance company to brand the title of your car as "totaled in a wreck". Now the car cannot be sold as a regular used car. So if you ever run a Vehicle History Report on a salvaged car, the report will show that the car was salvaged and rebuilt, and it may show it as passing through a salvage auction in addition to the DMV branding. This is how you catch people illegally selling a salvaged car as a regular used car. When you buy a car at a salvage auction, you are totally exposed and on your own. You know the car is damaged, you just don't know what it will take to get it working again. Some bidders don't care, they just want the car for spare parts.

Off to the salvage auto yards
Once your wrecked car has been determined by the insurance company to be totaled, the title is branded and the car is sent off to the auto salvage yards and the insurance company pays you whatever they determine to be the going rate for your car being totaled. Once in a while the auto salvage yards have a salvage auction, where dealers can go in to inspect rows of totaled cars and bid on them. This is truly a site to make you wince. I saw an Acura NSX totaled, I saw Mercedes M class SUVs and exotic cars crumpled up like tin cans. Typically the cars will sell for 20-50% of their market value. I know a dealer who bought a 1995 Mercedes-Benz E320 Convertible from a salvage auto auction in 2001. It had over 12,300 miles on it and was titled in New York, got flooded, and ended up in an auto salvage yard in Florida, where it sat for over 9 months until it was bought for $22,000 in June, 2001. If it had been a certified used car from Mercedes, it would sell for $46,473 at the dealers that time.

The only damage was some of the computer modules had to be replaced and the carpets were all cleaned up. Even when you lift them you cannot tell at all that the car had been flooded, it's quite amazing. This happens all the time throughout the county. If you know the car was salvaged and rebuilt and you are paying significantly less than market value for the car, then it's OK, because you know what you are getting. But most of the time, people sell used cars that are salvaged or rebuilt, and don't tell you, and charge you full market value, which is wrong.

How much should you pay for a rebuilt wreck?
There are many people willing to buy rebuilt cars, because for the most part they are probably OK. But many people would never stomach the risk that there is still something possibly wrong with the car. What if the airbags were not replaced? Honest dealers will find a buyer for a totaled car first, then tell them how much it will cost to rebuild the car. Then the dealer buys it from the salvage auction, fixes up the car, rebuilds the title, and sells it to the buyer for a price that is hopefully 25-30% below market value. One of our visitors was looking at a totaled 2000 Honda Odyssey EX with only 200 miles in July, 2001. The main damage was done to the back of the van and nothing at all to the front. The dealer wanted $22,000 for the Honda once it was restored. The dealer probably bought it for about $11,000 at the salvage auction, and was asking way too much to rebuild it, even for a vehicle that is in demand. A used Odyssey in good condition at the time was only $24,000. In our opinion, the rebuilt car should sell for 25-30% less than an equivalent used car in good condition would sell for in the open market. If the seller asks any more than that, it's not worth your time, or the safety risks, or the risk of being stuck with a huge repair bill down the road to fix improperly repaired subsystems. That 30% provides your margin of comfort when taking a chance buying a rebuilt car from a dealer who picked it up at a salvage auction. We know another dealer who also bought a 2000 Honda Odyssey at a salvage auction for $11,000, and fixed it up, with a buyer lined up to buy it for $18,000.

Always have an inspection company look at the salvaged car after you buy it. This is very important, because if you're not a car repair expert, you need to have a true inspector check it out and find out everything that is still wrong with this car so that you can have it fixed.

There are many dishonest people out there who will not tell you where that used car came from or that that it was salvaged. Now you think you are covered because there is "still time left" on the manufacturer's warranty. But in reality, the warranty is voided. Here are the disadvantages of buying salvaged and rebuilt cars:

• Extended Warranty companies will not cover a salvaged car with a rebuilt title.
• Even the manufacturer's warranty is voided on a rebuilt or salvaged title.
• Banks will not finance a salvaged car with a rebuilt title.
• It's hard to find insurance companies to insure a rebuilt car.

Police Auctions, Seized Cars & Government Auctions
In police & government auctions, they are usually auctioning off government seized vehicles, or decommissioned vehicles that the agency no longer uses. The one thing to keep in mind with police auctions is the impounded vehicles could have been sitting for a year or longer with no maintenance whatsoever. Sometimes you get a good deal, sometimes not. I was at a Broward sheriff's auction once and saw 2 impounded Lamborghini Countachs that were in awful shape sell for $150,000. One had no engine, the other was trashed and missing a rear axle. I'm not sure I would have ever bought those cars. Also, on top of the high prices paid for those 2 cars, the winning bidder had to pay a 10% buyer's premium to the auction house. The other issue is that there could be severe title problems with these confiscated cars. They could have been stolen, or god knows what, so you should run a vehicle history report on them to make sure that you'll be able to take title with a minimum amount of effort. At police and government auctions, remember to use all the other auction tips I mentioned above to protect yourself. Arrive early, get the Vehicle Identification Numbers, and run that AutoCheck Vehicle History Report before you even think about bidding on a vehicle. Remember that these vehicles are sold "As Is" with no warranty, so police auctions are not for the faint of heart. You must be prepared to perform a lot of work on the car that you purchase at a police auction.

Myth Of Police Auctions: "I'm going to get a car dirt cheap!"
This could not be more wrong. Remember, a police auction is just like any other public auction, and prices can spiral out of control, thanks to uneducated buyers. Don't forget the typical 5-10% buyers premium at police car auctions as well. Since the auction house sets the minimum bid, you know it's really going to be dirt cheap. The police are smart and they know they are sitting on a gold mine and they intend to get market value for these cars if they can. The decommissioned police cruisers you'll get a good deal on, but the impounded cars are just everyday normal cars off the road and will probably sell for nearly market value. Also keep in mind that most of the bidders at the police auctions are regular guys like you and me looking to get a nice car for less than we could find it in the Auto Trader from another regular guy selling the same car. The other problem you face at police auctions is bidding fever can often drive the price of a vehicle over the current market value of that car. Now it's no bargain at all. How does that happen? Idiots! That's the only explanation I have. You have several idiots bidding on a car that have no idea what it's worth because they did not research in the blue book first. My friend wanted a red pickup at the Broward Sheriff's car auction and blue book priced it at $16,000. The truck sold for $18,000 plus the buyer had to pay a 10% buyer's premium. Oops! Forgot to account for that extra $1800 while he was letting the bid spiral out of control. The buyer paid $2800 more for the truck than it was worth.

How much should you pay for a vehicle at a police auction?
That's tough one to answer. You'd like to get it at a big discount to market value because you'll have to do work on it. Remember, it was not driven, maintained, or anything for months. So I would never pay more than blue book "Trade In" value, which is usually $2000-$4000 below market value, keeping in mind the 10% buyers premium on top of that. At the very most, you should not pay more than market value less 10%, to allow for the buyers premium. In my opinion, the trade in price is the only price that makes it worth my time, otherwise, why bother going to the auction? You could buy the same car from a private seller for a bit more, who at least has done some maintenance and driven the car, and kept in driving condition. At the police auction, if the prices begin to bid higher than trade in value, just walk away no matter how bad you want the vehicle. Don't think of it as losing, think of it as the winning bidder just inherited a money pit. There is a reason for everything in life and your deal will come up soon.

Get a 30 60 day Unlimited Vehicle History Report. Run A Vehicle History Report Before You Buy That Used Car
Think of a Vehicle History Report as a credit report for a car. You MUST run this report if you buy a used car so you don't get scammed. It happens to the best of cars too, I've seen them on Lexus, and on Mercedes. You have been warned:

• Extended Warranty companies will not cover a salvaged car with a rebuilt title.
• Banks will not finance a salvaged car with a rebuilt title. If they find out, you are in deep trouble.

I just love receiving email from our visitors when they find out the used car they almost bought was a rebuilt wreck. One visitor told me he saved himself $7500. You can find the VIN# on the a plate on the dashboard by looking through the windshield. Some cars also have the 17 digit VIN# printed on stickers on the drivers side door, trunk, other doors. Then you can run a Vehicle History Report to see if it has a rebuilt title.

There is no such thing as a used car lemon law!
Lemon laws apply only to new cars sold to private individuals. Many fools think there is a used car lemon law, but there is none, you are totally on your own there. Did you get a lemon Honda used car? No laws will help you if it's a used car. So you have to help yourself proactively by determining if that car was ever wrecked, or flooded, salvaged or totaled.

You need to do more than run Free VIN Checks!
You MUST run an AutoCheck Vehicle History Report if you buy a used car so you don't get scammed. You have been warned. Don't just run the free VIN checks and think your job is done. The free VIN check is just a teaser telling you how many records exist for that car, so run the full AutoCheck Report on the car. AutoCheck also has an excellent buyback guarantee. If for some reason a problem title is later found on a vehicle that shows a "Clean Title" in their system, AutoCheck will buy back the vehicle from you. Also, with AutoCheck you should choose their premium unlimited package that allows you to run unlimited car checks on vehicle VIN numbers for 30 60 days. This gives you the chance to check the history of every used car you are seriously considering. I highly recommend that one. You want to be sure the used car you are about to buy did not come from an auto salvage auction. The DMV record search involves millions of records collected all the time from different states. The DMV title search performed by AutoCheck compares the VIN# you enter to the database and prints out all the information it has on that vehicle.

Gross Polluter Check
The AutoCheck Vehicle History Report is a great tool for your arsenal because it can tell you if a car has emissions problems. This is a great check for you if you live on the west coast and are looking at buying a pre-owned car. It informs you if the a car has failed emissions in California. As I am sure you're aware, CA has probably the toughest emissions laws in the US. If a car has failed emissions, it could cost you, the poor unsuspecting consumer, hundreds of dollars or more to get the car to pass the pollution test. That's a money trap you can do without.

Stolen car scam alert
A police officer friend of CarBuyingTips alerted us to a clever scam with stolen premium cars. The thief buys at a junked salvage auction for example, a wrecked Mercedes E Class for $5,000. He launders the title back to a legit "Rebuilt" status, then steals the exact same model Mercedes E Class car. He files down the VIN on the stolen car, transfers the VIN plate from the rebuilt junked car, and sells you the stolen Mercedes E Class as a used car. The only way to uncover this scam is to check the VINs on all panels of the car to make sure they match. Some thieves do a good job and change all of them!

Watch out for used car airbag fraud! They can be over $800 to replace them yourself
Each year an 2.5 million cars are wrecked, and 1 million of them end up back on the road. The question is, how many of them have missing airbags? Airbag fraud is a huge and profitable scam in recent years. When cars are wrecked, the insurance companies pay for damages which also include airbag replacement. But many unscrupulous repair people keep the money without replacing the $800 airbag, often stuffing the space with everything from crushed beer cans to peanut bags. There's many companies out there that sell fake airbag covers so that you think you have an airbag but you really don't. Many people right now, maybe even you, are driving around in a used car with no airbag, even though you think there is one there. How can you really tell if it's there? You can't see through the airbag cover. That's why you need to know if the car was wrecked. If the car had previous accidents, or other title flaws such as "Junked", "Salvaged", "Rebuilt", on the AutoCheck Vehicle History Report then you need to be real suspicious of this car and have a mechanic verify that airbags are properly installed in your car. In some states, AutoCheck can tell you if the airbag was deployed in an accident, if police investigators check it off in the accident report.

Scam Alert: Many cars are bought as junk for $75, then a few quarter panels are swapped out from junkyards, and the car is repainted cheap, for a total cost of less than $500, then these title branded "junk" cars have their titles laundered back to "used car" status, and resold for up to $10,000 or more. Flooded or junked cars could end up in any state with a laundered title, so it's all the more reason for you to run the car title search using AutoCheck Vehicle History Reports. Supposing you're looking at a stolen Honda Accord (and who hasn't had their Accord stolen?), the "seller" could have replaced the VIN# tag with that from another car, or maybe they did not change it at all. But how would you know if the car was stolen? The only way is to run the history report, and verify the car description on the report matches the car you are looking at.

Don't ever say "It can't happen to me". The people who say that are the ideal target market for the schemers, who sneak right past the buyer's arrogance and right into their wallet.

Every VIN# Tells A Story
The 17 digit VIN# (Vehicle Identification Number) appears on all cars, and is found in the dashboard on a metal strip. In the 70's and 80's car thieves would alter the numbers, file them down, remove the tag, or replace it with a VIN tag from another stolen car. You should also be able to find the VIN# inside the driver side door on a factory sticker, the passenger door, the trunk, the hood, and sometimes the engine and other major parts have one, or it's engraved. My Lexus SC300 has stickers on most of the major panels. The car makers place VIN stickers on the major accident parts like doors, engines, and quarter panels, which are broken down from a car when it's stolen. If they show up on another car, something is wrong. Either the car was stolen, or junked and rebuilt. Walk around the car, checking all the doors and panels for the VIN#, and making sure ALL of them match.

The DMV processes and approves 350 "rebuilt" or "laundered" titles every month. Chances are good that you'll buy a car that was wrecked or stolen, and had the title "branded" as totaled, but it was laundered back to "used car" status by making a few minor repairs in a highly unsupervised and non regulated industry. You cannot guarantee your safety in a wreck. How do you know if the airbag still works, or the ABS? There is no safety data on rebuilt cars, and you should not risk the lives of your kids on a rebuilt car. Always run the car title search using AutoCheck Vehicle History Reports.

The information on this site is Copyright © 1996-2010 ConsumerNet, Inc. This site is solely for your personal use. You may link to these pages or print them out for your own personal use, but no parts of these pages can be reproduced, sold, or transmitted in any form without explicit written permission. By copying or paraphrasing the intellectual property on this site, you're automatically signing a binding contract and agreeing to pay a fee of $10,000 per instance per week payable immediately.