Here’s how it works. Used car dealers purchase much of their inventory from the major auto auctions such as Pennsylvania based Manheim Auctions. Dealers must then figure out how to move the cars they purchase from the auction to their dealership, and they either move the cars themselves or hire an auto hauler. Some dealers work directly auto haulers but many also use a network or brokers that match dealer cars with auto haulers.
In December of 2012 Manheim Auctions acquired Ready Auto Transport a large transportation broker serving dealers and in a press release said “Combining Ready Auto Transport…with Manheim’s extensive used car marketplace creates an unrivaled, end-to-end solution for customers to manage their vehicle inventory needs.”
In our opinion it also created an "end-to-end" conflict of interest and the all too easy opportunity for a major auction or its participating dealers to defraud auto haulers on damage claims. When the auction owns a broker like Ready Auto Transport, and a car shows up at a dealership after a transfer with “unexpected” cosmetic issues, 100% of the responsibility falls to the auto hauler…UNLESS all damages are hand written on the back of the cars gate release upon leaving the auction. This could include damages totally unrelated to the transport process.
It took about 18 months but dealers have begun to figure out they can blame transporters and file damage claims for ANYTHING not written on the back of the gate pass. This puts transporters and insurance companies in the position of arguing damage claims directly with the auction who business is based on advocating and facilitating the business of their member dealers. When Ready Auto Transport, owned by Manheim Auctions says the transporter is responsible for all damage not written on the back of a gate pass, they are essentially passing off to the transporter without recourse any misrepresentations in the condition of the car at the time of sale by the auction or the seller...another dealer.
So if Ready hires a transporter on a unit sold by Manheim and there are undisclosed damages on the unit, Ready Auto Transport, the Manheim owned broker, has become the strong armed enforcer that “shakes down” the auto hauler and its insurance company for repair dollars on behalf of their member dealers. The auto haulers only defense in this conflict of interest is to mark damages on the back of gate passes.
This turns truck drivers into professional auto inspectors. Truck drivers are not car inspectors, and the policy at Ready Auto Transport puts auto haulers not only in the position of being car inspectors, but they must be as good, or better than any professional inspector employed at the auction.
We have some new strategies to deal with what we perceive to be a rapidly growing trend to defraud auto haulers with bogus damage claims. But now you know the risks, and make sure you take a pen with a lot of ink to your next Ready Auto Transport pick up at Manheim.