Used-car auction -- where the dealers deal in wheels

"What'll y'give me, fellas. What'd y'want to pay," auctioneer Roy Cox bellows as a hundred or more Ford dealers cluster around a car. Someone in the crowd shouts: "$4,000."

A rat-a-tat gurgle of auctioneer talk finally ends with: "Sold -- for $5,925 ." The original dealer invoice price on the 1980- model 2-door Ford Mustang with 9,778 miles on the odometer was $6,339 -- but no dealer had ever owned the car.

A round sticker on the glass of every vehicle proclaims: "The only previous owner of this car was Ford Motor Company."

The site is the Concord Auto Auction, owned by Roy Cox, a marketplace for automobile dealers not only from Massachusetts but far from the Bay State as well.

Cox is selling 298 vehicles today, all Fords with the exception of an Audi, an Oldsmobile Omega, and a few other cars which Ford had bought some time ago to test. All of the vehicles with the Ford name -- many of them from Ford's hometown of Dearborn, Mich. -- were in the Ford fleet of tens of thousands of vehicles which are leased to Ford employees or provided as part of the job to high-level executives of the firm.

A Ford representative on the spot asserts that today's auction is open to Ford dealers alone.

"No retail buyers allowed!" a sign on the wall proclaims.

Over the next few weeks, however, most of the cars, vans and light-duty trucks will find a spot in a retail buyer's garage.

The Concord Auto Auction, one of scores in the US, was started by Mr. Cox's father in the late 1940s and has been at its present site since 1955.

While today's sale deals with Ford cars alone -- and only one auction lane is being used -- the five-lane Friday auction includes dealers of all makes of cars , with the age and condition of the vehicles running the gamut from late-model cream puffs to older vehicles with minor or even structural damage -- or out-and-out lemons.

Things really move fast on Fridays, Mr. Cox asserts.

And he's right. A few days later a '79- model Cadillac brought $3,650. A 1976 Oldsmobile Cutlass Supreme with 73,000 miles on the wheel sells "as is" for 625. A 1972 Lotus brings $4,250.

The point is, the dealers know what they're buying beforem they write a check. The National Auto Auction Association (NAAA), a trade group of some 140 auctions across the US, enforces a strict code of ethics, according to Mr. Cox. Also, if a dealer has a bone to pick with the auction, an arbitration procedure is available onsite. If a car is sold "as it," the dealer knows it at the start.

Bob Gentle of Metro Auto Auction of Kansas City, Lee Summit, Mo., heads up the NAAA. Besides the NAAA, there are perhaps another 50 nonaffiliated auto auctions -- smaller in size and selling far fewer cars at a time.

"Many f them are mom-and-pop-type operations," says Gentle, who adds: "I think that most of them adhere to pretty much the same ethics that our members do."

Most of the dealers know the policies of the sale, declares Mr. Gentle, "and they adhere to them. When we find a dealer who does not, we bar him from the auction and refuse to do business with him.

"If a dealer slips a car into the auction that has been damaged extensively and repaired, but did not announce it, and the car is sold, the buyer can reject it on the day of sale, a month later, or two months later," asserts Gentle. "If there has been frame or extensive damage, we like for him to notify us within 30 days and we make the selling dealer buy back the car."

New-car dealers and independent dealers as well probably have more protection today by buying a car through an auto auction that they would by buying from an individual on the street.

Many car dealers bring their own mechanics to an auction.

Except for some of the older, high-mileagevehicles that are sold "as is," a dealer buys a car on the auction block, then goes out and drives it. If he finds he'll have to spend more than $100 to repair the car, he can reject the pruchase on the day of the sale.

"If a dealer buys a faulty car at an auction, and knew that he was buying a faulty car, any reputable dealer would put that car into right condition before he would offer it for sale on his used-car lot," asserts Gentle. "But I am sure there are some who do not," he adds. "Again, that would not be the fault of the auction. That would be the dealer," he insists.

Of all the cars now on the road, more than half of them at one time or another were sold through an auction, according to Bob Gentle.

At the Concord Auto Auction here, one dealer pays $5,725 -- $21 more than the original dealer invoice of $5,704 -- for a showroom-perfect Ford F-100 pickup truck with 1,329 miles on the odometer. A lowmileage 2-door Mercury Cougar goes for $6,850, down from an original dealer price of $7,925. A 1980-model 2-door Capri, dealer-price at $7,673 when new, goes for $6,250 with less than 11,000 miles on the wheels. A Ford Fiesta, with 17,088 miles, sells for $4,300. Original dealer price: $5,583.

Vehicle No. 32 is a Ford Club Wagon, dealer-listed at $9,386, but sells for $ 7,000. An LTD Country Square wagon, which would have cost a dealer $9,441 some 13,454 miles ago, goes for $7,350.

A sign on a wall says: "The accuracy of the mileage that appears on any and all parts of the vehicle is the responsbility of the seller." Another sign: "All vehicles with 100,000 miles or more must be announced." No high-mileage cars here at the Ford sale, however.

And still another sign: "All cars and trucks 1974 or older are sold as is. No drive. Settle at once." And another: "All yard sales as is. No arbitration."

A Lincoln Continental, priced to the dealer when new at $11,898, goes for $9, 500. It has 29,208 miles on the tires.

The car-auction industry has been working to upgrade its public image for the past 20 years, according to Bob Gentle. Then the only guarantee a dealer had when he bought a car at an auction was that the block wasn't cracked. "Other than that he had no guarantee but we've changed that year by year," he reports.

"WE will not allow a dealer to sell a flood car at the auction, for example," he adds. If a dealer continues to flout the rules of the game, he can be -- and ism -- barred from the auction block.

Where does that put the car buyer? To protect himself a car buyer should, first of all, knowm the reputation of the dealer from whom he plans to buy a car. Also, the buyer can have a car inspected visually by a mechanic before he buys it. And if there is any way to get a warranty, he should get one. Today there are several companies that write warranties on used cars for a period of 12 months or 12,000 miles, or even longer.

"It's worth the cost," says Gentle.

Auto auctions today are considered the best source available anywhere for a retail dealer to buy cars. For Motor Company, for instance, last year sold some 70,000 vehicles through car auctions from coast to coast. Chrysler Corporation is starting to phase out its leasing program but in the past it has been selling about 60,000 cars a year this way. American Motors sells about 25,000 cars a year through the auctions.

General Motors usually does not dispose of vehicles through the auto auctions but is reported to be considering such an outlet in the future.

Not every car that is driven or towed past the auction block sells. An E-type 1968 Jaguar (magnificant with shearling upholstery and impeccable paint) brought a top bid of $7,600. The selling dealer wanted $8,000 so it didn't sell.

Indeed, the auto auction today is big business -- and growing.

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