Hammer Time: Behind The Gavel

Steven Lang
by Steven Lang

Six hours to showtime. We have 58 vehicles and 1 motorcycle for today’s sale. It will be a very interesting day between the first dealer conversation and the last car that rolls (or gets pushed) through the lane. We’re going to be managing an on site sale for a large financial institution that is most definitely not in the car business. Their business is the money business. They will demand 59 checks in hand within 24 hours, and these vehicles must help keep their books healthy for the end of year bonuses.


As for us… we have the bank’s managers, a long line of new and returning dealers, dozens of flat tires, dead batteries, cars with varying sorts of mysterious starting problems, and a thunderstorm set to hit in an hour. The cars? Everything from a ragged out 2008 Chrysler 300 to a pristine Mommy-van van whose only owner had the misfortune of dying back in September. The cars are here… now we just need to build the market and have a great sale.

One of the fortunes I have is my dual role as a dealer and an auctioneer. As a dealer, I get on a lot of mailing lists from other sales and when I do, I get to constantly build my market… in an entirely legal way of course. This weekend yielded some very good results.

By Monday morning we have already sent off a list of vehicles to our dealers that now include several dozen new names. Within hours we have new dealers who are ringing our line to become registered with our sale. It looks to be a great day which isn’t surprising. Given that we’re on the cusp of tax season where folks put their returns towards down payments on their new rides, today’s sale will more than likely be especially strong.

Most auctions have one lot manager who is in charge of a given number of vehicles. They will battery jump the vehicles, add fuel, pump tires, change batteries, and will even shoot some starter fluid to awaken a long slumbering jalopy or ten. We have two lot managers for our sale. Why? It’s cheap insurance and all of these cars have been sitting for a while.

When you’re dealing with a lot of older repossessed inventory that has been laying about, you simply need extra hands to prepare for the uninspected. Even if one vehicle doesn’t go through, that ‘no-sale’ will translate into two lost fees. A buyer’s fee and a seller’s fee. Needless to say, we’re always amply staffed.

I love cars, but like the bank, I want the metal to go away. The long and the short of it is that our job as auctioneers is to take care of the ‘patient’ after the patient’s dead. Most of these cars have lived rough lives and when you open the door to these cars, you get a very complete picture of most of their owners.

Some were single moms whose debts and economic misfortunes simply caught up with them. Others were big spenders who were willing to pay big money for rims, audio systems, and TV’s. Some were perverts. Others were gangsta wannabes, druggies, or simply had more money than sense. A surprising number are laid off teachers and government employees. In 2007 very few repos on average came from responsible owners. In 2009, the title histories and well kept metal tell a very different story.

Looking at the titles for these vehicles, virtually all the rough ones are bought and repo’d within a year’s time. Low savings and a quick dose of unemployment will do that to those living it up. The ones that had long periods of ownership really break my heart. Folks that kept their cars well kept for ten, even fifteen years, can find themselves behind the eight ball of a terrible economy.

Medical expenses bring down a lot of these people. You can often see the unpaid hospital bills, pills, and test results that put them in the American poorhouse. Many of the dealers are dealing with the effects of these situations. Situations like these, and my own distaste for financing, are what kept me a strictly ‘cash’ dealer for the well to do until October of last year.

Anyhow, we’ve prepared well for the sale and the dealer interest has turned into a swarm. Cars are being started up. Wholesalers are calling their used car sales managers. Retail owners are checking to see what cars are worthy of their clientele. The first vehicle sells strong. A 2008 Chrysler 300 goes for $2700 above the reserve and the rest becomes the automotive version of a bull market.

Other than a tampered 1998 BMW 5-Series… that still sells at a healthy premium, fifty eight cars come and go through the auction block within a matter of thirty-five minutes. By the time the 7th Ford Taurus roles through, we’ve managed to sell all but two vehicles. Only a Mazda that the bank was buried in and a Honda crotch rocket that was customized by it’s owner pre-repo, keeps the sale from being a clean sweep.

We shake hands. Enjoy a few conversations. Take care of a lot of checks and titles, and close shop. The sale is over before 4:30 and by 5:30 we’re on the road. We’ll be coming back to do it all over again in two weeks

Steven Lang
Steven Lang

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  • Newcarscostalot Newcarscostalot on Dec 15, 2009

    bikegoesbaa: When folks who purchase a car and are no longer able to pay, the banks take the property and sell it for a lesser amount than the debtor owes, and far less than the original loan amount. Often, the outstanding balance is more than the bank has sold the property for. If the original debtor is unable or unwilling to pay, than the bank is out that money for good. The only winner is the new purchaser. You stated: For example, perhaps you didn’t take care of the property or arranged your financing such that you would be upside-down throughout much of the life of the loan. How is the bank supposed to deal with this situation? This is the fault of banks for underwriting the loan in the first place and the debtor for falling for it. You also stated: Obviously the best possible outcome from their perspective is that the vehicle sells for the amount owed and they no longer have to worry about recovering their money. If they don’t do this it is because they couldn’t; not because they didn’t want to. Banks rarely sell the vehicle for what the debtor owes, they sell it for less. Again, if they were stupid enough to give out a loan that they knew they would not be able to regain the orginial amount owed from said loan in the first place, then it is their fault if they are unable to at least break even. This kind of stupidity has led to alot of the financial problems that we as Americans are dealing with today. If this is Capitalism at its best, then God help us. Again, this only my opinion! Thank You for the opposing viewpoint. Makes me think! :-)

    • Bikegoesbaa Bikegoesbaa on Dec 15, 2009

      You stated: When folks who purchase a car and are no longer able to pay, the banks take the property and sell it for a lesser amount than the debtor owes, and far less than the original loan amount. Often, the outstanding balance is more than the bank has sold the property for. If the original debtor is unable or unwilling to pay, than the bank is out that money for good. The only winner is the new purchaser. I understand this. I also agree that it is a suboptimal outcome. I would like to better understand why it is evil/wrong/etc rather than merely unfortunate. I contend that there are many reasonable cases where the value of the vehicle is less than the loan amount outstanding through no fault of the bank. As far as I know, banks have no real good way to determine whether an individual vehicle will suffer a reduced resale value due to high miles, poor maintenance, cosmetic damage, tasteless modification, or even just changing trends or high gas prices. Let's say you're a bank. You loan somebody $20k to buy a new car. They proceed to neglect and abuse the vehicle to the point that two years later when you repossess it it's only worth $8k despite the fact that there is still $14k outstanding on the loan. Because of the car's condition, you cannot sell it for $14k. Or, let's say you finance a $30k SUV to a responsible owner when gas costs $2/gal. A year later, gas costs $4/gal and the residual value of the vehicle drops tremendously. You repossess it due to default, but it will only sell at thousands less than the outstanding loan amount. What would you do in either of these situations, since nobody is willing to pay you what is currently owed on the car? You stated: Again, if they were stupid enough to give out a loan that they knew they would not be able to regain the orginial amount owed from said loan in the first place, then it is their fault if they are unable to at least break even. I think you are misstating the case here. Nobody is stupid enough to give a loan that they know they will not be able to recover. I doubt any bank had a deliberate policy of "make lots of loans that will never be paid back". If stupidity was a factor, it was thinking they could recover on a loan when in fact they could not. Bad investments happen all the time, but that doesn't mean that the people making them are evil. I'm not trying to be difficult, I'd really like to understand the alternative that you favor.

  • Newcarscostalot Newcarscostalot on Dec 15, 2009
    If stupidity was a factor, it was thinking they could recover on a loan when in fact they could not. Bad investments happen all the time, but that doesn’t mean that the people making them are evil. That's it! that was what I was trying (longwinded) to say. I don't know if there is an alternative, except to change society as a whole. People want new stuff and are willing to take large loans out to get this stuff, so things will continue this way until things change! Thank You for responding to my comment!
  • Hermaphroditolog Good hybrid cars use ICE implosion mode.Mercedes-EQXX uses implosion turbines (turboexpanders) for regeneration from heat losses.
  • Kosmo I, for one, and maybe only one, would buy a 5.0 L, stickshift variant of the sedan/hatchback that is Ford's "Not A Mustang EV" tomorrow.I'd buy the sportwagon version yesterday.
  • Akear I am counting the days when Barra retires. She has been one long nightmare for GM. People don't realize the Malibu outsells all GM EVs combined.
  • Redapple2 you say; most car reviewers would place it behind the segment stalwarts from Honda and Toyota,........................... ME: Always so. Every single day since the Accord / Camry introduction.
  • Akear GM sells only 3000 Hummer EVs annually. It is probably the worst selling vehicle in GM history.
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