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The Truth About Car Buying on eBay
and Other Online Auctions

Published 3/23/2004

Originally published 11/12/2001 - It seems hardly a day goes by in our offices lately, without at least one call from a distraught enthusiast who's just found what they believe is the exact car they've searched for their entire life. They are distraught because the car they have found is for sale on eBay, and they desperately need someone to inspect it before the auction ends!

This phenomenon has been happening with increasing frequency in recent months, and with Yahoo looking to launch their own 'car auction site' any day now, we thought it high time we set the record straight before things get much worse.

You see as protectors of the 'buyers' of this world (albeit self appointed), we feel duty-bound to enlighten these poor bewildered souls as to the truth about buying a car on eBay or any other similar auction site for that matter.

Let us begin by saying that the success of these auction sites (in their present form anyway) is completely, 100% reliant on the 'honor system'. That is to say they rely on decent folks keeping their word and being honest in their representations. Now whilst we are led to believe that this largely happens on small ticket items like beanie babies, and used CD's, it's apparent that the 'honor system' concept unfortunately falls apart when it comes to used cars - and if you throw used car dealers in the mix, you have a recipe for getting stung - big time!

Now before every dealer in the country e-mails me having taken offense at my previous comment, let's be clear that not ALL dealers are unscrupulous, but sadly there are PLENTY that are. Unfortunately, as you and I have a difficult time differentiating between the two, we resolve to tar all with the same brush. You understand that these aren't necessarily bad people, one has to remember that selling cars is how these folks make their living, it's how they put a roof over the heads and food on the table - make no mistake most will do or say anything (providing it can't be proved in a court of law) to sell you a car!

If you see a car for sale in an online auction, the first rule is "don't panic"! You must treat it as you would any other car listed for sale anywhere on the planet. USE DUE DILIGENCE perhaps even more so under these circumstances, (as I believe truly good cars can be sold easily through standard means like classifieds or dealers forecourts) interview the seller, ask questions about the cars history and if the vehicle interests you sufficiently, ask to have validating documentation faxed to you - forget the bidding process, concentrate on finding out if this is indeed the car you want first! Arrange to have the vehicle inspected by a national group like Automobile Inspections, LLC (they can get a comprehensive condition report on the car in your hands within 72 hours!) and then once you know what exactly your about to buy, bid up to what it's worth to you. Under NO CIRCUMSTANCE send a deposit, until after you've had the opportunity to thoroughly inspect the vehicle, have agreed a price and are ready to purchase it.

Did you know that no matter what you bid there is no guarantee that the seller will sell you the car? If your highest bid is below the value of the vehicle in the sellers mind, (even if he posted it with no reserve), he may not let the car go - he'll just tell you one of any number of excuses to renege on the deal - and you know what recourse you have for wasting 2 weeks of your life 'playing auction' with this clown? - Virtually none. Oh, you can complain about him to eBay, but the most they can do is write him a "formal warning" or for a repeat offender "suspend his user account"  - perhaps eBay and others aren't aware just how easy it is to get a new email address these days? 

The other thing that comes into play from the buyer's perspective is what is known as a 'shill bid'. This is when a seller uses his friend, brother-in-law or sometimes even another e-mail address that he owns, to apparently increase the bids against you. Despite eBay and others best efforts I don't believe they can really stop this from happening, and like I mentioned earlier even if they did catch someone 'cheating', their solution is to suspend that users account - which in the short term does nothing to help you.

It seems that the best thing to do from a buyer's 'perspective,' is to bid away on the car as high as is necessary to win the auction, ensuring of course that the purchase is subject to a final inspection. You are almost certainly going to be able to find something that the seller neglected to mention, so you then have an excuse to back out of the deal, unless of course the seller is willing to re-negotiate.which in most cases they will be more than willing to do, as you are now (and may have always been) the only 'real' buyer in the picture. In the event that the seller chooses not to lower their price, you have two choices, to accept the car at the price you bid, or walk away. The irony is, that they as the seller has no more recourse than you do in this dealing.

Please don't misunderstand me here, I am not advocating dishonesty, but rather demonstrating how absurd (in their present form at least) these online auctions presently are. I'm sure they sounded like a great idea in the theory stage, but when it comes to used cars, some peoples lack of scruples and others lack of trust, has meant the original concept doesn't work in practice.

There is no doubt that the problems highlighted here have happened hundreds of thousands of times on a smaller scale in the world of beanie babies and other small collectibles and were probably brushed off as a lesson in real life. However in the world of collector cars the stakes are much bigger and the players often far more seasoned. In this world the same rules apply that always have, its "buyer beware", "look before you leap" or "a fool and his money are soon parted".

Jeff Webster

Jeff Webster is President and CEO of Buyer Services International LLC.

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