Mailing of your payment checks.
By Christopher Morabito, J.D. | August 3, 2008
Mailing of Checks
If you rather not wait for the check, every auction I have ever been to automatically mails it out to you the next day via regular mail unless otherwise specified. Other specifications include, but are not limited to:
1. Putting a hold on your mail so that checks will not be mailed and, therefore, you or your employee can pick the check up the very next morning which, in most cases, cash flow wise accomplishes the same as if you stayed and waited for the checks the night before. The only time you may not want to do this is if the auction is very far away.
2. Pre-arranging with the auction to send you the checks via an overnight carrier, therefore, you will have the checks available to deposit two days after the auction.
Once you start your business, open an account with any overnight carrier. It is very easy to do. Just pick up the telephone and give your business name and address to an overnight carrier’s representative and the company will assign you an account number and then quickly send you a whole package of pre-printed forms with all your company’s information on them.
The company will simply bill you when you send a package and you can give the auction your account number so that they may forward any titles or checks to your and then the carrier will bill your company.
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Checks and Drafts.
By Christopher Morabito, J.D. | August 3, 2008
Checks and Drafts
Once you have handed in your papers, your next and final step is waiting for the checks or drafts. Generally, the auction has a “window,” where you pick up checks. There are auctions that give you your check at the same window where you handed in your papers while others have their own system. Once again, always find out these incidentals when attending a new auction.
Most people know what a check is, however, many people do not know what a draft is (in this case it is not a beer) and drafts are prevalent and a way of payment at car auctions.
Drafts are issued every time a dealer sells a car “title attached.” The drafts look exactly like a check, however, are usually different in color and say “draft.” The reason why a draft is used, is that a draft is a “negotiable” instrument that only becomes “payable” or “negotiable” or “cashable” when the seller hands the title into the auction. Therefore, if you sell a car at a Wednesday sale and you sell it
title attached, you will be issued a draft and that draft will not be worth the paper it is written on until the title to that particular vehicle is submitted to the auction.
An important word of caution about drafts. If you deposit a draft before you submit the title, it will bounce. Both the auction and the bank will become very upset if you deposit drafts and it will only further delay the time in which you can use that cash because you will have to wait for the bank to mail you back the draft (which could take a week to ten days) and only then can you redeposit it, and only if you have submitted the title by that time.
REMEMBER: Sell title attached = Draft = no good until submit title, so don’t deposit until then.
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Duplicate Titles.
By Christopher Morabito, J.D. | August 3, 2008
Duplicate Titles
If you didn’t buy the vehicle at an auction, then you should call the dealer that
you got the car from or, if you bought the car from a non-dealer, you must ask
that entity to obtain a duplicate for you.
A word here about the loss of titles and obtaining duplicate titles. If you lose or destroy a title as all car dealers occasionally do, don’t panic. Just follow these steps:
1. If the title was in your name simply apply at motor vehicle fro a duplicate title (called a “dup” by car dealers). The cost will probably range from $5 to $25.
2. If the car was titled in someone else’s name, you can either: (a) call the auction where you bought the car and they will arrange to get the duplicate title for your or (b) call the dealer yourself and request that the dealer get a duplicate for you.
In order to quicken the process you may ask any one of the above; auction/dealer/private owner to give you written permission to obtain a duplicate title on your own. Be sure to have the letter notarized and bring copies of your bill of sale with you to the motor vehicle department. I advise you to try to get the duplicate yourself because you are the one with something to gain, whereas any other party has absolutely nothing to gain. Use common sense - don’t rely on others if you don’t have to, especially where the other party has nothing to gain by getting their title for you.
AN Every single time you receive a title for a car, make
IMPORTANT a photocopy fo it. This is so easy to do and will save
NOTE: You major headaches if for some reason you lose the title.
So far in the transfer process we have the title (a.k.a. certificate of ownership) and assignments/re-assignment papers. These are enough to consummate a deal between you and another dealer. Usually dealers don’t require a bill of sale from another dealer. If, however, asked, simply write one out on a form which can be gotten from a stationery store.
When you sell a car to a non-dealer, you should always include a bill of sale with your back-up papers.
When selling at an auction, your title and back-up papers must also be accompanied by the auction invoice slip. Once you have all three, you are ready to hand in your paperwork. You do so by going to the appropriate “window” in the auction. Each auction varies as to whether you go to the same place where the buyer paid for it, or to another window altogether, but a simple inquiry should be enough. In general, the windows resemble those windows at a bank.
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Paper work to transfer property at a dealer auction.
By Christopher Morabito, J.D. | August 3, 2008
Paperwork
After your cars are sold for the day and after you have checked arbitration, now is the time to transfer ownership of the cars to each individual buyer.
There are three things you need to transfer ownership at auction. They are the Title, reassignments and auction invoice. Every vehicle after 1973 has a “Certificate of Ownership” called a title. They vary in shape, size, color and format but essentially, they are all the same in the following respects. They include the following information:
· name of car maker
· name of car’s model
· year of the vehicle
· color of the vehicle
· size of the engine
· type (example 4-door sedan)
· VIN # (vehicle identification number)
· title number
· number of owners
· mileage (actual or TMU which stands for true mileage unknown)
· state of origin (state originally sold it)
· name of owner
Every time you buy a vehicle you will receive a title. Consequently, every time
you sell a vehicle, you will give a title to the purchaser. You must, however, do more than just hand the title to the purchaser. You must “assign” it over to him. To “assign” ownership is a legal term of art which means you are handing over the rights of ownership of the vehicle to another party. To assign = to transfer ownership. The car business term of art in this instance is “re-assign.” The phrase re-assign is used in the car business because usually it was assigned to one dealer by another dealer so, therefore, you are reassigning the vehicle to your purchaser.
To re-assign the car to the purchaser, you take the title which has someone’s name on it as the owner, which has now been assigned to you, or another dealer, who re-assigned it to you. Now you take your state issued reassignments and assign the vehicle to the purchaser.
Reassignments are self-explanatory, asking you to fill in the blanks with information. The re-assignment process is simple; however, it is very important that you do it correctly because if you foul it up the first time you may have to get a duplicate title, in which case your payment of the vehicle will be delayed or the deal may be off all together! Therefore, you must do your paperwork correctly.
The following is an example of re-assigning a car. NOTE all the car’s papers, that is the title, assignments, re-assignments, are called “back-up” papers.
Title:
Front: Assume the title has as the owner’s name as ABC Company on the front.
Back: The back must show ABC Company as the seller and your company as the buyer.
Now take your reassignment and transfer the car to the purchaser by listing your company as the seller and your buyer’s company name as the purchaser.
The exception to the above is when the title is blank on the back when you get it. In this situation, you simply fill in your name on the back as purchaser and then use your re-assignments to assign it to your purchaser.
When not selling at auction, you may, in some cases, when the title is blank on the back, you may just fill in the purchaser’s name without using any re-assignments at all.
Most of the time, a car dealer gets a title for a vehicle and he puts it in a file and then does the same for each vehicle he has. However, there are a growing number of states that require that a dealer title a car in the dealer’s own name if he keeps it in inventory for more than fifteen days. The reason for this is that if a car remains titled in the prior owner’s name, that titled owner could always go to the motor vehicle office and say that he or she lost the title and apply and receive a duplicate title. Then that party has title to a car that the dealer thought he owned because a duplicate title supercedes any title before it. Therefore, some states make it mandatory that the dealer title the car in his company name, while some states make it optional. This is called “flipping” the title.
To flip a title, one needs only to take the old title, along with the back-up papers to the motor vehicle office and make an application for title. The cost to get a new title is very inexpensive and it is worth every penny for three reasons:
1. Peace of mind that the car is titled in your name.
2. By titling the car in your company name, you can now use the title as collateral to give to a bank to hold if you want to arrange a loan with a bank.
3. Makes getting duplicates much easier.
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Meeting the buyer after the auction block sale.
By Christopher Morabito, J.D. | August 3, 2008
Meeting the Buyer
When you have told the auctioneer the car is “sold,” you then go to the auction block window and meet the buyer as he “signs up” (gives his auction card to the clerk and signs the invoice) for the car.
Usually the buyer will ask you “How is the car?” or “How does it run?” And you should do your best to keep a straight face because what does the buyer think you are going to say: “It runs like garbage.” So simply assure the buyer that he got a great car at whatever price the buyer paid. Example: “For 5G’S you stole that car; it “runs out” great. Meanwhile, don’t forget to get your seller’s copy of the invoice; without it you can’t process the deal.
If you really feel uncomfortable speaking with the buyers, you can always pull the “old disappearing act.” This is when a seller runs off the auction block and runs to another lane. Sometimes the seller, in fact, has to run to another lane to represent another vehicle, but other times, the buyer is just running away to avoid those ridiculous questions of the buyer. So, if you rather not talk about the car with the buyer, you can always run off and buy yourself a hot dog and then later go back to the auction block to pick up your invoice.
After you have sold all of your vehicles for the day, always check to make sure that none of them are in arbitration. Many times a seller thinks all of the cars he sold for the day are history and meanwhile one of them was in arbitration - and he didn’t hear arbitration calling him because he was too busy. If you don’t respond to arbitration, your deal will be killed (null and void) and you will not be paid for the car and, therefore, you will have your cash tied up for another week.
So always remember to check arbitration when you are finished selling for the day. Actually, you, or one of your employees, should check arbitration one hour after each car is sold because after one hour, a vehicle cannot be arbitrated. Remember to also check at the END OF THE DAY!
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