Your Auto Fortune

Mailing of your payment checks.

Christopher Morabito, J.D. — Mon, 04 Aug 2008 00:45:20 +0000

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.

Checks and Drafts.

Christopher Morabito, J.D. — Mon, 04 Aug 2008 00:41:47 +0000

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.

Duplicate Titles.

Christopher Morabito, J.D. — Mon, 04 Aug 2008 00:39:08 +0000

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.

Paper work to transfer property at a dealer auction.

Christopher Morabito, J.D. — Mon, 04 Aug 2008 00:36:13 +0000

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.

Meeting the buyer after the auction block sale.

Christopher Morabito, J.D. — Mon, 04 Aug 2008 00:22:06 +0000

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!

A Tip about Tipping.

Christopher Morabito, J.D. — Mon, 04 Aug 2008 00:18:31 +0000

If you sell the car on the block as you will most of the time, after the auctioneer says sold, it is customary to tip him/her. The industry custom is between $3 and $5 per car. It is, however, up to your discretion. An experienced auctioneer is capable of getting you an extra $200 to $300 per car, so be wise: tip $5 per car.

Selling a vehicle off the auction block.

Christopher Morabito, J.D. — Mon, 04 Aug 2008 00:14:22 +0000

Off the Block Sale
Any time you sell a vehicle at an auction in any other manner than the traditional bidding on the block, this is called an “off the block sale.”
This is the procedure for an “off the block sale” and also the problems that can occur. First, let me explain that an “off the block sale” can occur in one of two ways: (1) when you strike a deal to sell a car after it has hit the auction block and you “no saled” the car and a buyer approaches you; and (2) when someone approaches you to buy a car prior to the time it will run on the block, which I strongly recommend you do not do because, if buyers are trying to buy your car even before it “runs” it will do a “moonshot” (an extremely high price on the block). In either event, this is the procedure:
1. Take the buyer to the block on the lane it will run or did run on, and ask the clerk for the invoice that corresponds to your car. It will be the registration number the vehicle was assigned by the auction and on your vehicle. For example: “8-57″ would mean car number 57 in lane number 8.
Then the clerk will get the invoice and ask you what the selling price is. You will respond $4,700, for example, and the clerk will write in the amount. Then you and the buyer will both sign the invoice as buyer and seller and initial the price.
Problems: Each auction varies as to its policies on “off the block sales” but, in general, an off the block sale is not binding until both parties completely fulfill their obligations. Example: the buyer must pay for the car and the seller must turn in the title and “back up” papers (“back up” papers to be explained later.) Then, an only then, is the deal consummated and binding on both parties.
Therefore, either party can back out of an off the block sale without prior permission from the auction, so if you are the seller, beware! When you sell a car off the block, don’t think it is actually sold until the buyer pays for it.
So common sense would dictate that it is much better to sell the car on the block because that sale is totally binding on the buyer, subject only to arbitration if you sold it with a green light.

The illegal practise of raising prices when bidding-”Shilling”.

Christopher Morabito, J.D. — Mon, 04 Aug 2008 00:11:15 +0000

SHILLING
A note here about shilling. “Shilling” is the are of using a person that either works for you, or knows you, or you pay to bid on your vehicle. You may ask why would you want to bid on your own vehicle? The answer is very simple, it drives the price of the vehicle up. Many buyers think that this is not right. That it is playing dirty pool. But it isn’t because you are only driving up the price of your unit to where you are willing to sell it. Art galleries, estate sales, everywhere there is an auction, there is shilling. The reason why shilling is not unfair or underhanded is that the sellers are just trying to get the buyers to bid up to their bottom price that they wanted for the vehicle.
Here is how shilling works. As stated above, you, as the seller, use someone that you know to bid on your vehicle. You tell that person to bid up to your bottom line figure (for example, $7,500) then that person will do so and if there is someone else who continues to bid against your comrade past the point of your low, you will sell your vehicle for the amount of money you needed. If, however, the bidding stops before $7,500, then your man will be top bidder and you will still own the car. You should always inform the auctioneer that the “shill” is with you.
TIP: Have the shill wear an orange or yellow jacket or an easily identifiable hat so that you can simply say to the auctioneer, the person in the white hat over there is with me.
Any experienced auctioneer will know what you’re talking about, and try to make sure that the last bid doesn’t land on your shill.
Also, try to use a person that has shilled before because like anything else, “to shill” takes a certain amount of skill and a person with experience usually always does better than a neophyte.
Your best bet is to only use a shill to bid up to one pre-arranged price which is your lowest possible take on the vehicle. Sometimes dealers use shills to continue to bid to raise the price of the car, because professional shills do know how far to bid because they can tell by the nature of the bidding if his competitors will continue to out-bid him. After the bidding has stopped on your vehicle, the auctioneer will say “sold” if the price that you informed him that you would sell the vehicle for has been reached. He will not ask you for your permission to say sold, so make sure you meant it when you told the auctioneer that $5,000 will be enough to sell the vehicle, because he will “drop the hammer” and sell it before you stop him.
You can, however, tell the auctioneer to leave the final decision of selling the car up to you, (as I said earlier, “reserving the right to you.”) by using this phrase: “I want as close to $5,000 as possible, but get “real money”. I’ll decide if I want to sell it.” This phrase will make the auctioneer get a real bidder on the vehicle for the first bid rather than making a fake bid himself to start the bidding. This way the top bid will be a real bid and, at the end of the bidding, you can decide whether or not to sell the vehicle. Once the bidding stops, you will either say “Sold” or “No sale.” If you say “No sale,” the auctioneer will usually say, “That won’t do it fellas, it takes more than that to buy a car like this.” Then usually one to three of the bidders asks the auctioneer what does it take to buy the vehicle and the auctioneer will turn to you and ask what you’ll sell the vehicle for. Then he will relay your answer to the crowd of buyers and either one or two of them will accept or make a counter offer or say “you’re nuts.” Don’t take it personally because statements like this are only meant to intimidate you into selling your vehicle cheaper.
The next thing that usually happens is that the auctioneer will tell those buyers hanging around, “Boys, talk to the man.” This means if any of the buyers are interested in the vehicle they should approach you.
In most cases, at least one buyer will approach you and ask, “What’s the best you can do on this car?” or “What do you need for the vehicle.” And you reply by giving him a figure. Try always when you’re in this situation to convince yourself either to sell the car and forget it, or don’t sell the car and just wait until next week’s sale. (DON’T GET MARRIED TO ANY CAR!) That’s car dealer’s talk for don’t keep a car for too long. If you have a car for a while and you can’t sell it for a profit, remind yourself that you won’t always make a profit on every car and sometimes it makes better business sense to sell a car short, perhaps even for a loss, and buy a new vehicle that will be profitable for you. Your success is not measured by every car but rather by your end-of-month profits.
A very important note here on how to handle this dealer approaching you. If he makes you an offer that is close to what you want for the car, immediately say “done deal” and bring him to the auction block to consummate what is called an “off the block sale”.
The reason why you want to accept his offer without too much haggling is because if you haggle too much, the buyer will probably say “Let me take a look at the car first and I’ll get back to you.” This is very hard to do (the dealer getting back to you) at an auction because there are usually between one and three thousand people at an auction, and the dealer will have to page you, and nine times out of ten, these type deals don’t go through.
Furthermore, the invoices from the auction block will be forwarded to the main office and those invoices are very hard to retrieve from the front office after your vehicle has run. You will be kicking yourself for not having just accepted the offer and signed the buyer up on the auction block when you had the chance. Always remember: don’t get “greedy,” when you have the buyer so close to the block, sell him the car, especially if you need the cash, sell the car even for a small loss. However, don’t ever wholesale a car for a big loss because you have the option to retail the car for a big profit.

Caution: Don’t be Greedy when selling at an auction.

Christopher Morabito, J.D. — Mon, 04 Aug 2008 00:06:48 +0000

Caution: Don’t Be Greedy!
Be sure that your “low figure” is the absolute lowest that you are willing to sell the car for, because most auctioneers take control and even if you decide to sell it to a bidder, that bid below your “low take” figure , the auctioneer will say “NO SALE,” and you may be very sorry because you need the money for other vehicles. Therefore, work with the auctioneer by telling hem that you reserve the right for yourself to say “No Sale!”
If in fact you thought a vehicle would definitely bring $5,000 but it brought only $4,500, which would represent a loss, but you need to sell the vehicle for cash flow purposes, then you should approach the highest bidder and ask if he would like to buy it for $5,000.
If he says no, then, say “meet me half way” that is, he will split the difference between $5,000 and $4,500 which is $250 and he will pay you $4,750. Be prepared for the buyer to offer you even less than $4,500. Maybe he’ll offer only $4,000 because when you approached him he knew you’re desperate to sell that vehicle. But hold your ground because if he bid up to $4,500, he probably would have gone further if there was a stronger bidder against him. Since the auctioneer said “No Sale,” he knows you had a higher price in mind. Approach the buyer with an attitude that he’d be stealing the car for “5G’s” (start to learn how to talk like a car dealer). However, be humble and don’t lose your cool.

Getting the Vehicle Through the Block.

Christopher Morabito, J.D. — Mon, 04 Aug 2008 00:00:05 +0000

Getting the Vehicle Through the Block
Once the vehicles are fully prepared to run through the auction block, you must make sure that they actually run. Although the auction is responsible for this, however, the auction does occasionally make mistakes, so it is your responsibility to make sure your vehicle runs. The auction helps you to accomplish this by putting television sets in each lane and rest area such as lobbies and cafeterias. The television sets tell you which number vehicle is running in each lane at the time you look at the TV. Therefore, all you need to know is the number of your vehicle and go to the correct lane when your vehicle is about to run. Usually, you should go to the lane at least five minutes before your vehicle is about to run to make sure your car is on line to come into the building.
This is easy to accomplish if your have one to three cars at a sale. However, once you start running fifteen to twenty cars at an auction, you need a system. Most, it not all, car dealers always make a list of their cars for each sale. You should use the same checklist as described earlier in this chapter when we discussed the registering process. Use the same format as the sample given and remember to bring it with you on sale day!
Even if you decide not to make a list when you register your vehicles, please remember to make one when you are selling them at the auctions. Even a person with the best memory can forget one car, if he is selling ten, and to miss selling one vehicle, could cause a ten thousand dollar shortage in your cash flow for the week, in addition to a $1,000 loss of profit.
Therefore, the following list format is suggested.
Vehicle
Lane
Number
Cost
Low Take
‘84 Toy Corolla (White)
8
98
1,200
2,000
‘89 Taurus (Red)
5
127
5,000
6,000
‘92 Explorer (Tan)
12
224
12,800
15,000
‘80 Citation (Blue)
1
17
100
500
‘85 maxima (Rose
8
171
3,000
4,850
‘88 S10 P/U
14
50
2,100
4,000
You can make such a list on any type of paper, index card or whatever you find comfortable. Simply cross off the vehicles as they are sold. This will make your day run smoothly and efficiently.
In the event your vehicle does not run, due to some error (yours or the auctions), don’t panic. The remedy is this: Go directly to where the car was parked. If it is still there, go to “operations” and ask the operations manager to call the lane leader to make the car run. Generally, your car will run only a few minutes later. If, however, too much time has elapsed between when the car was supposed to run and when you went to “operations,” you may have to wait until the end of the sale for your car to run. What is too much time? It depends on the auction and the circumstances of why it didn’t run in the first place. But, generally, fifteen or twenty minutes is too late to run immediately. You will catch any auction mistake immediately, and you car will run right away, as long as you stay on top of things.
When your vehicle does run, walk up to the auction block when the dealer whose car ran before you comes down off the auction block. Greet the auctioneer, then inform him of the following things:
1. Green light car
2. Title is here
3. Options
4. How much you want for the car
Lights: As outlined earlier in this chapter, all auctions use some kind of light system. As a seller, you must remember to tell the auctioneer if the car is to be sold “Green light” - that is, “arbitratable” or “Yellow light” - that is caution for a particular reason, “Red light” - that is the car is being sold “as is” and “Blue light” - the car is being sold “title attached.”
Title: When you are selling a car “title attached,” you must make sure you do three thing:
1. Tell the auctioneer the vehicle is title attached
2. Tell the auctioneer to announce that the title will be available very soon
3. Make sure that the “Blue light” (or title attached) box is on the invoice is checked in ink
Here is where major headaches can occur. The invoice is filled out by the clerk on the block and since no one is infallible, the clerk can make a mistake. Therefore, always make sure to check that all the boxes on the invoice that should be checked, are checked. For example, make sure that the Green, Yellow, and Red boxes are marked correctly and, most importantly, make sure that the Blue box is checked as stated above.
If the Blue box is not checked by the clerk, even though you announced that your vehicle is title attached, the seller can later get out of the deal. Many a car dealer has been waiting for his check at an auction only to later find out that the buyer did not pay for the vehicle, because of such an error. The buyer will allege that he did not pay for the vehicle because when he went to pay for the car, you didn’t hand in the title and he then found out it was title attached. Actually he really wants “out” of the deal for some other reason and knows full well that it was a title attached deal, since you had already had a whole conversation with the buyer as to when you would get the title to the auction. An experienced car dealer has many ways to get out of buying a car that he doesn’t want after he has won the bid. THIS IS ONE WAY - DON’T LET IT HAPPEN TO YOU!
Options: After you inform the auctioneer of all of the car’s conditions, you should also inform him of any special options or characteristics that the car has that you may want him to announce, such as extra low mileage or dual air bags. Auctioneers always use public address (PA) systems to address the buyers, so always whisper into the auctioneer’s ear, otherwise your voice will carry over the PA system.
Price: After you have told the auctioneer the conditions and options, you must tell him the minimum amount of money that it will take to sell your car. Of course, no one ever knows exactly how high the bidding will go, however, you must give the auctioneer a ballpark figure as to how much you expect to get for your vehicle. You must tell the auctioneer the lowest amount of money that you would be willing to sell the vehicle for, so that he may start the bidding accordingly. Most auctioneers will ask you, “How much you want for the vehicle?” and will not take an ambiguous or vague answer from you because he cannot do his job. So, be prepared with a “low take” figure for the auctioneer.