Auto Auctions

You asked for information on state law and regulations regarding auto auctions. You also asked for information on regulation of auto auctions in several other states. We will forward the information on the other states to you once we receive it.

Connecticut requires a permit to sell motor vehicles at auction. Only new or used car dealers are eligible to receive an auction permit The dealers must apply to the Department of Motor Vehicles for a permit for each auction they wish to hold. When applying they must certify that the auction will comply with all applicable local ordinances.

Connecticut regulates both dealer to dealer auctions and auctions to which the public is invited. The regulations include requirements for obtaining and displaying a permit and auctioning damaged vehicles. They also require adequate parking, vehicle identification numbers, and warrantees.

The DMV inspects each auto auction. Last year there were about 100 one-time auctions and about five regularly scheduled auctions. The inspectors check each vehicle's identification and the dealer's permit They also observe the auction for violations. The DMV requires a statement to be read before an auction detailing specific sales and warrantee criteria for bidders.

The law prohibits anyone from selling motor vehicles at auction unless he is licensed by the Department of Motor Vehicles (DMV) as a new or used car dealer and has an auction permit from the commissioner. The permit fee is $13. The permit is issued at the commissioner's discretion and in accordance with DMV regulations (CGS § 14-65). The law requires motor vehicle auctions to segregate totaled or salvaged vehicles with "salvage parts only" title certificates from the other vehicles being auctioned. A vehicle declared a total loss by an insurance company and which has 10 or more major component parts damaged beyond repair must have the words "salvage parts only" stamped on its title.

The law does not apply to (1) a sale by a sheriff or deputy sheriff or (2) a private auction sale of cars used for business or personal use by a seller who is not a used car dealer

Connecticut regulations set requirements for dealer-to-dealer auctions and auctions to which the public is invited (CT Agency Regs. § 14-65-1 to 4). A dealer must obtain an auction permit from the Dealer's and Repair's Division of the DMV before each auction. As part of the permit process the dealer must state that he is complying with all applicable local ordinances, such as noise, traffic control, or the time of day an auction can be held, according to Lt. Supina of the DMV. The commissioner may issue permits for regularly scheduled auctions up to six months in advance. An auction dealer must display his permit conspicuously at the auction site. According to DMV, a dealer must notify it 10 days before an auction so that an inspector can be assigned to the auction. The dealer must reimburse DMV for the inspector's services. The auction must be advertised and conducted in the name under which the dealer's license and auction permits are issued. The auction dealer must have sufficient parking to accommodate all cars to be sold and convenient parking for those attending the action.

Connecticut regulations require auction dealers to announce as such vehicles sold with "true mileage unknown" (TMU) or "title brands." A title brand is a label or designation imprinted on the face of a motor vehicle tile indicating that it has incurred substantial damage or has been returned for replacement or refund for failure to conform to a manufacturer's warranty. These vehicles must pass the same DMV inspection reassembled, altered, or rebuilt vehicles must pass before they can be registered. An auction dealer cannot sell any car having a title branded "salvage parts only" or equivalent except to someone licensed by the DMV as a motor vehicle recycler or similarly licensed by another state. A vehicle with a "salvage parts only" title must be sold separately from other vehicles.

All sale vehicles must have a verifiable vehicle identification number (VIN) which conforms with commercial standards or a state issued VIN in the case of abandoned or composite vehicles or those without a factory issued VIN. A vehicle with an altered VIN number cannot be sold unless it has been inspected by and its sale approved by a DMV inspector.

An auction dealer must complete and give to each auto purchaser any documentation required by law. This includes the name and address of the vehicle's last owner, the state where it was registered, its mileage, and if required by law, an endorsed certificate of title. The dealer must keep a copy of these documents for at least three years.

Connecticut regulations require an auction dealer conducting a public auction to warranty at the time of sale that he is the vehicle's owner, that it is sold free and clear of all encumbrances, and that he will give each purchaser all necessary documents to register the vehicle. Each motor vehicle must be available for examination at the dealer's place of business for at least eight consecutive hours on the full business day proceeding the auction. During this period the dealer must make available to any prospective purchase an accurate written statement as to the vehicle's condition. He must also make known whether the vehicle has a guarantee or warrantee and its terms. The statement must include the vehicle model year, make, last owner (not the dealer), mileage, state where last registered, general condition, duration of warranty, whether it is fit for highway operation, and any other terms and conditions required by DMV. Any vehicle with a branded certificate of title must pass the DMV inspection for altered or rebuilt vehicles before it is sold.

The auctioneer must read the statement of condition at the time the vehicle is offered at auction and immediately before accepting bids on it The reading must be done with sufficient clarity and volume to be heard.

Following bidding, the auction dealer must give the successful bidder an opportunity to examine the vehicle to determine whether it conforms to the written statement of condition. If it does not conform the bidder may withdraw the bid. It the purchaser accepts the vehicle the law pertaining to car sales by dealers applies.

An auctioneer who sells five or more vehicles at any one auction or more than 25 during a calendar year is considered to be an auction dealer even if he is (1) not licensed as a motor vehicle dealer or (2) not selling vehicles owned by a licensed dealer. Regardless of this provision, sale at auction of motor vehicles, which are part of an estate or business and sold in the normal course of business is not considered a sale by an auction dealer.

1. Vehicles sold for between $3,000 and $5,000 will have a warrantee for 30 days or 1,500
miles, whichever comes first. Vehicles sold for over $5,000 will have a warrantee for 60
days or 3,000 miles, whichever comes first in the absence of accident damage or
consumer misuse.

2. A vehicle sold as is must be announced as such and the purchaser must pay for the
repairs.

3. Taxes and conveyance fees are not included in the bid, if any.

3. All vehicles must be properly registered or towed from the property.

3. The successful bidder will have a reasonable amount of time to examine the vehicle to
determine if it conforms to the written statement. If it does not he may withdraw his bid.

In 1997 the DMV had inspectors at 325 auto auctions. According to Lt. Supina these included inspections at about 100 one-time auctions and about five regular weekly, biweekly, or monthly auctions.

For both dealer to dealer and public auctions, an inspector must check the parking area to see if mere is sufficient parking for the vehicles to be sold and for the vehicles of those attending the auction. He must check that the auction permit is conspicuously displayed on the premises and has the correct address. On the day of the auction he must pick up a check for that day's inspection services. The inspector must also examine all vehicles to make sure the VIN numbers are intact, show no evidence of tampering or obliteration, and are affixed properly by the manufacturer. He must authenticate the true number if a vehicle has no serial number or has one that may have been tampered with. The vehicle cannot be put up for auction that day and if the number is missing, the dealer must apply for a replacement serial number before it can be sold.

In the case of dealer to public auction, the inspector must also examine the dealer's records for proof of ownership for all vehicles intended for sale that day. If the dealer does not have proof of ownership for a specific vehicle, it will not be allowed in the auction. The inspector also must check that all emission stickers are up to date, that all vehicle are fit for inspection, and that they are ready for inspection by the public 24 hours before the sale.

The inspector also observes the auction to ensure no violation is committed by the auctioneer. The auctioneer must read a statement of condition of the vehicle being auctioned so it can be heard. The inspector must notify the dealer immediately of any violation and see that it stops at once.