This scam is very easy to catch – If there were a government agency watching. The problem is the DMV is sound asleep.
There are dealer auctions where the public is not allowed. The frame damaged cars are advertised to dealers along with undamaged cars mixed in. The dealer is able to run a CarFax to determine if CarFax has caught the structural damage information. If not, the dealer puts it on the “buy” list.
On the day of the auction, the auction announces Frame Damage and usually sells the car under a Red Light (Red Yellow and Green lights are turned on according to condition). The dealers bid accordingly.
The successful bidder takes the car back to the dealership and prints out a CarFax. He then advertises the car as coming with a “clean” CarFax. Later, when caught, he pulls out the CarFax and professes he relied on CarFax and had no idea the car had frame damage.
The more professional thief has you sign a “disclosure” he has slipped into the pile of documents you sign at purchase. It can be a Buyers Guide – you sign on the back side – and he gives you a copy of the back side only – and when you complain, he produces the Buyers Guide with a fresh disclosure on the front – the part he did not give you.
The other is to have you sign a DMV document entitled “Statement of Facts”. It is a 4 page document that you sign on page 4. Of course it is blank, and he tells you it is a DMV required document if you even ask. He then fills in the “disclosure” – sitting waiting to be used against you.
Your only hope is the car was sold through Manheim Auction as Manheim gives the auction announcements to AutoCheck. So, if the car was sold to the dealer at Manheim, you may be able to show dealer knowledge by getting the AutoCheck. However, no other auction has this relationship with AutoCheck.
Adesa is the second largest auto auction in the country. Adesa and the other independent auctions do not report condition announcements to AutoCheck so there is no way to fully protect yourself against a dealer buying frame damaged cars from these auctions.