EBay's "Auction Insurance Agency" to the Rescue

Like tens of millions of American consumers, I shop for my cars online. I do due diligence; working hard to filter-out fraud and minimize the unavoidable unpredictability inherent to such transactions. My methodology is far from perfect—as my recent experience will attest. In fact, my tale of woe provides a real life example of how the biggest online seller—eBay—responds to fraudulent transactions.

I was looking for a sedan with relatively low mileage. Something a bit interesting, but not insane. Somewhere between, say, a Honda Accord and an Alfa 164. I trolled eBay’s No Reserve auctions looking for a deal. And there she was: a 2002 Mazda Millenia L 65k miles, good condition.

Before bidding, I ran a Carfax (clean) and checked the seller’s reputation (500 transactions, 98% good). It appeared that the seller wasn’t a dealer; the vehicle was listed as “my” (i.e. his) car. I checked the Mazda’s book value in comparison to the auction price. I researched the model and noted the Millenia’s predilection for failing automatic tranny’s and clogged egr valves. I asked the seller about these potential pitfalls. His response (recorded in eBay): the tranny had never needed servicing, shifted smoothly, and there were no dashboard lights on.

I placed a $4,050 bid and “won.” I paid my $500 Paypal deposit. Three days later, my brother and I embarked on a 500-mile round-trip road trip to pick up my new ride.

The test drive went well. Clean, nice interior. No funny sounds, bad shifts, etc. Being somewhat mechanically adept—but unable to put it up on a rack—I gave the Millenia L a careful inspection. I handed over the cash and hit the road. The journey home proceeded without event. And then . . .

The check engine light came on. I ran the codes at Advance: egr. The seller had the codes erased prior to selling the car. Then, a small transmission fluid leak. A slightly rough 1-2 shift. The leak grew larger every day. As I went into the glovebox for the manual to check on the recommended fluid level, I found a balled-up receipt for 24 ounces of “Lucas Transmission Fix.” The receipt was dated the same day I’d picked-up the car.

I’ve been had.

I drove the car into the shop. The mechanic identified a front seal leak, which required dropping the transmission—and my pants, to the tune of $850.

I contacted eBay. The website’s calm, helpful rep said working with the seller was my first, best option for recompense. Customers who’ve proved that they’ve done this, and still can’t resolve the issue, can then file a claim with the eBay’s “Auction Insurance Agency.”

When I contacted the eBay seller, he told that he didn’t actually sell me the car; he let his “boy” post it on his eBay account. When I called the “real” seller, he offered to swap-in a replacement transmission from a wrecked Millenia. Uh, no. I secured five different quotes for the work. I choose the shop with the best quote.

Once Cottman Transmisson dropped the tranny, they discovered that the Millenia needed a full rebuild plus torque converter. After multiple calls and emails between myself and the actual seller, it was clear he was unwilling to pay to have a reputable shop fix the car properly. So I sent an email to eBay’s Auction Insurance Agency (AIA).

I received a phone call the next day. I described my situation, including the receipt for the Transmission Fix. AIA’s requirement: get two quotes on fixing the exact problem from two ASE certified shops. But no one will quote transmission work unless they can personally get inside the tranny. Even so, I eventually convinced a shop to write-up an estimate on the same amount of work. I faxed my quotes along with the receipt for the transmission liquid, proof of transaction, and my story in writing.

AIA tried to get payment from the seller. That didn’t go well. In fact, the agent told me that they “may” shut down the eBay seller’s account. Which would still leave the “real” seller unpunished, but it’s the right thing to do. At least it’s not my problem anymore.

eBay’s insurance policy only covers major components: transmissions and engines and . . . basically, that’s it. I had to spring for the Millenia’s torque converter ($360), which somehow isn’t considered part of a transmission. But eBay paid for the transmission rebuild: $1600.

I consider myself lucky. But this was an expensive lesson. Aside from the out-of-pocket expenses, I spent a ridiculous amount of time trying to recover from my initial mistake. My big concern: how well would my claim have turned-out if the fraud not been so easy to prove? What if I hadn’t bought from eBay? I’ll always be a bit more weary of their No Reserve auctions, but I guess my experience proves the sometimes you get what you pay for—even when you don’t.