The Expert Podcast

in this video we're gonna talk about cars that come from auctions and whether or not they have clean titles and if there's any problems with paperwork on vehicles that come from auctions. let us know in the comments below what your thoughts are do you have experience buying cars from auctions or having title problems from auctions. so an auto auction is a facility which sells cars on behalf of the consignor the consignors who is selling the vehicle. most of the time the consignor is actually a dealership most of the larger auctions are dealer auction. so the major companies are Mannheim auto auction Odessa auto auction those are the two large standard auctions there's also Copart and IAAI which sells insurance claim cars like salvage cars. and there's many private smaller regional auction southern auto auction majesty auto auction that are not part of the chain there's a local auction. they're also options like police auctions to sell impounded vehicles. there's government auctions that sell you know for government surplus. and then there towing auctions and repo auction to sell vehicles that have been in the private sector either towed or repossessed from a bank. each one of these is gonna give you different kind of paperwork. now one thing to keep in mind is if you purchase a vehicle from any source much less an auction and you're not handed a legal title like this when you give the money you're going to be at risk of not being able to title that car. most auctions will give you decent paperwork that you need to title that vehicle. however for example if you buy a car from a towing auction. what that towing company supposed to do is go through the entire towing lean process to have the title cleared so can be transferred to you. many times either intentionally or accidentally they will not finish that process and they'll just hand you some paperwork that looks like it's good a bill of sale an auction sheet maybe a filing with the DMV. but when you go to the department of registry or the motor vehicle department your state they're gonna tell you this paper is not good enough you need more. how do we know that we get seventy eighty calls a day somebody bought a car from a towing yard or repo yard and they don't have the right paperwork. we'll tell you what to do if that happens momentarily. if you buy a car from a dealer auction and the dealer selling it to you they're either going to hand you a title when you pay for the car or it's try to come in the mail a little later. the good thing is if you purchase a vehicle from a dealer auction and the dealer is actually a seller by law they're required to give you a title. and if they don't you have some recourse you can either sue them you can file a complaint you can file with the licensing bureau to have forced them to you title by law they have to give you a title. now you have to be careful you're not signing off on any waivers when you buy the car that you're waving your title because that might give them a loophole the slide out the deal. so make sure to clean deal and you're not signing any waivers when you go to the auction. Manheim Odessa if they let you in as a consumer as a civilian you're getting you're gonna get a title when you buy that car unless they tell you otherwise. now what about salvage auctions Copart IAAI now they're selling cars that came from an insurance company. they'll probably have a title to give you but that title is going to have a history record on it prior insurance claim. like in in the collision a theft a flood. and those affected the titling process of the vehicle at the very least you are going to have to have the vehicle repaired and inspected before you can get new title in your name. the title you get is going to have the name of the insurance company printed on the front let's say geico they're gonna sign the back handed to you and then they're done. the problem is it's not a slam dunk automatic thing for you to go to the DMV and say Hey give me a title with my name. depending upon how that title was issued you're going to have to show copies of receipts for repairs you're going to have to show that it's up to factory specs for alignments and safety and air bags and all the computers have to work. and you have to have receipts for those even if it's fixed if you don't have the receipts you could be rejected. in addition you have to be very careful some states do not allow you to have that inspection done in the state other than where the title is from. where this is a problem on salvage cars let's say that you live in Chicago and you go to copart in Chicago and buy a crashed vehicle. needs a little work to put a new bumper you put on new tires whatever needs and you go to bring it to inspection but the title that Copart gave you was from New York. because let's say maybe that car came from New York it got crashed and they brought to the CoPart part in Chicago. well New York in many cases has a requirement that if it comes from New York on a salvage title it has to be inspected in New York. the last thing you want to do is to be shipping a car from Chicago to New York to get inspection done. you may have some problems there. the other thing that can happen is many of these titles to come for an auction or not salvage titles that can be repaired there what's called parts only or certificate of destruction or non repairable. and even though the vehicle itself made look like it's in decent condition that's not the point. if the insurance company decided that they have some liability by letting that car go back on the road they're gonna just stamp it void so can never go back on the road. why would they do that if it's a good car well if they don't know what happened to the car maybe was stolen for two months and they don't know if somebody stole their bags if they dented the frame if they you know tampered with the anti lock brakes who knows. more insurance companies are putting parts only on vehicles even if they're in good shape. and you don't get caught behind that because it's irreversible once it's done it's done. even if the car is in perfect shape you can't protest that you can't appeal that. once it's stamped into the title record not only is it on that title it's in a federal database that cancels that vin number forever. irrevovable no way around it. how do we know that same thing we get about a hundred calls a day from people who bought a car that's parts only and they can't do anything with it. what would make an insurance claim be high on a car also where it it looks like in the good shape. well nowadays the cost of parts is so high that even a minor damage to a car can be many thousands of dollars to repair for the parts many thousands for the labor because labor rates have gone up because there's nobody work on cars anymore. some body shops are charging a hundred hundred fifty dollars an hour for labor rates. the twenty hours labor there's three grand. you got maybe three grand with the parts now you're six grand you know that car is a fifteen thousand dollar car now it's totaled. plus with the availability of parts being as difficult as it is you call your local dealer and and run three or four part numbers by them a fender and a fender well subframe connector four five parts and ask them what availability is I guarantee you that one of those parts is gonna be on back order for a month or two. we ran into a problem with the client the other day that was looking for a key fob and our remote on a vehicle in that remote was not available for sixty days. so if you have a vehicle that needs physical repair and the parts will be available for two months the insurance company now has to pay rental car for that person for two months twenty Bucks a day sixty days there's another thousand Bucks. or more it's tough to find a rent a car now for twenty Bucks might be forty Bucks today now you're talking to grant for rental. so instead of doing that the insurance company just totals it. because they can't afford to wait while that customers tooling around and rent a car for two months waiting for parts total the car sell it at copart. so these are reasons going on behind the scenes that are why many of these cars coming out of copart are difficult the title or impossible to title. also you're probably not buying the car directly from Copart. your buying you're probably buying it for a broker like auto bid buy a one of these other brokers and make sure you're getting good paperwork from them because many of the Copart vehicles are not eligible to sell directly to consumers. the seller the insurance company prohibit sales directly to consumers so you may have to buy through a broker so make sure your you understand what the broker said to give you. so auction titles are tricky it's not an automatic guarantee unless you're getting handed a legal title at the time you give money your at risk. and ask if the seller what they're going to give you before you raise your hand in bid make sure you know what's gonna be handed to you when you pay the money so you're not caught with a car you can never put on the road.