How to Avoid Auto Auction Scams
Auctions have been the subject of scams ever since the practice came into being. The same goes with auto auctions. Auto auctions are also subject to abuse by unscrupulous sellers who want to make a quick buck out of clueless buyers.
- The inexistent vehicle – this scam happens in online car auctions. In this type of auction, the only information that you usually have are the seller’s description as well as some pictures of the vehicle. Unlike local auctions, you wouldn’t be able to personally inspect if each part of the vehicle is working properly. To protect yourself during online auto auctions, it would be good if you ask for more pictures if you aren’t satisfied with the ones that the seller posted. Aside from that, you should also check the seller’s feedback rate. The higher the seller’s feedback rate is, the more reliable he is supposed to be. But remember that it isn’t always the case.
- The escrow scam – in this situation, the seller would ask you to pay him through an escrow company. After paying, you find out that the company is fake and is working for the supposed seller. You then lose all your money in the process. Typically the car never existed or belongs to someone else.
- Hidden flaws – it is normal to find vehicles at auctions to be in a less-than-perfect condition. Usually, their condition is declared by the seller. However, there are times when sellers do not completely say what the car’s condition is. To prevent yourself from falling into this trap, you should always take the time to inspect the car’s condition. Your inspection shouldn’t be restricted only to the cosmetics, but to the car parts especially the engine. Check if there are oil leaks and see the condition of the oil. The oil usually gives a hint of the engine’s condition. Doing a quick check of the exhaust can give away clues to the engines condition as well.
To avoid auto auction scams like the ones listed above, it always pays to be well informed before joining an auction.
What to look for when attending a legitimate auto auction.
- Pre-sale inspections - Any legitimate auto auction will let you look at the cars and listen to them run before you are asked to bid on them. You will most likely not be able to drive the car but looking at the dash for lights and listening to the engine run for a few minutes can help you avoid buying a car with probelms.
- Post-sale inspection - Many larger auto auctions will offer this service for consignment cars (cars sold at their facility by other sellers). This will give you the opportunity for a small cost to have their staff certify the car before you take it away. If this services is available you need to use it every time.
- Green Light (drive train warranty) - If you are new to auto auctions then take the time to read their policy on light conditions. Most auctions will use the Green/Yellow/Red/Blue Light system. If you want to buy a car with some sense of protection only bid on cars being sold green light which means they will typically have a 72 hour 'warranty' on the engine and transmission.