A different breed of curbstoner, and

A different breed of curbstoner, and
yet another way cities leak revenues.
www.stopcurbstoning.com
If there’s such a thing as a profile of a typical curbstoner, it’s someone
who buys cars cheap, cleans them up, and flips them for a profit
to unsuspecting consumers under the pretense of being a private
party. But recently, we’ve become aware of an entirely different type
of curbstoner – and curbstoning.
These are rogue tow truck operators who buy junked or non-running
vehicles and resell them, either whole or in parts.
“CASH PAID FOR ANY
VEHICLE RUNNING OR NOT”
You may have seen listings like that one on free classified ad websites,
or posted on telephone poles or community bulletin boards.
Sometimes, it’s from a salvage yard that needs to boost its inventory
or a scrap yard looking to make a legitimate profit through recycling.
But often, it’s from one of these rogue tow truck operators.
Here’s how they work. They buy basically junk cars for $200-$300
apiece. If the car runs, they fix it up enough to sell it to an unsuspecting
buyer, typically doubling or tripling their money as a curbstoner with
little effort. They don’t take title to the vehicle, so there’s no paper
trail associating them with the junker. Instead, the title jumps directly
from the previous owner to the buyer, hence the term “title jumping.”
Title jumping is illegal. But, because there’s no direct paper trail,
enforcement is difficult when buyers don’t insist on conducting
business with the registered owner of the vehicle.
But what if the vehicle doesn’t run? That’s when things get interesting,
and every bit as profitable.
First, easily removed parts are listed for sale online. Such resalable
parts may include wheels, headlights, taillights, emblems and trim,
and even the glass and seats. With the rise of online classified ads,
those parts easily find willing cash buyers on the used parts market.
After the saleable parts are salvaged and sold, what’s left is recycled
as scrap metal. For instance, if it doesn’t find a buyer as an intact
used part, a used catalytic converter can bring $40-$80 or more
as scrap, depending on the converter, the market, and the price of
unrecovered platinum. Aluminum wheels are worth $10-$15 per
wheel as scrap, even if damaged and unusable as wheels. The radiator
and wiring harness may contain scrap copper worth $10-$30.
What’s left is simply sold
for scrap at about $300
per ton. With an average
of a ton and a half of scrap
per vehicle, that’s $450.
But what if the vehicle
doesn’t run? That’s when
things get interesting,
and every bit as profitable.
Once again, the perpetrator doubles or triples his or her money, most
of it in cash, with no trace of any transaction taking place.
And, a busy rogue tow truck operator could easily flip hundreds of
vehicles per year. If an operator averaged only one car a day at $250
per car in profit, that adds up to $91,250 in under-the-table income
every year. Many flip – and make – much more.
In most cities, auto parts salvage and resale are regulated businesses,
requiring licensing and, in some areas, additional inspections and
permits. So these parts curbstoners, like regular curbstoners, generate
unlicensed, largely untaxed business profits while taking sales from
legitimate local businesses.
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www.stopcurbstoning.com
Changes for the Good
This era of unmonitored vehicle salvage transactions is slowly coming
to an end, but it is far from over. Most states require used auto parts
sellers to have vehicle salvage and reseller licenses. Licensed auto
salvage yards are required to report all vehicle purchases – and the
identities of the sellers – to a division of the U.S. Department of Justice
though a system called NMVTIS – the National Motor Vehicle Title
Information System.
Theoretically, this system should provide an end-to-end record of every
salvaged motor vehicle, including identities of owners and dates of
purchase and sale. The system is designed to protect consumers from
fraud and unsafe vehicles, and prevent stolen vehicles from being
resold. When utilized, the system works – the state of Arizona has
enjoyed a 99% recovery rate on stolen vehicles since NMVTIS began.
However, as yet, not every state is fully participating in NMVTIS, and it
is unclear how vigilant the U.S. Department of Justice and National
Highway Transportation Safety Administration (NHTSA) has been in
monitoring and prosecuting these infractions. Despite the threat of a
$1,000 fine for each failure to report vehicle information, some salvage
operations are still failing to report transactions.
Recovering Revenue by Crunching Data
and Catching Crooks
When they buy non-running cars, licensed salvage yards must report
the identities of the sellers to NMVTIS. These names and addresses
could be cross-referenced against business license information and
taxes paid to identify individuals running illegal parts and salvage
businesses, and subsequently recover funds owed to the public.
In addition, parts curbstoners even more than regular curbstoners must
advertise their wares. That turns free classified ad listings into powerful
investigative tools. In an informal spot-check using Craigslist listings in
three U.S, cities, we turned up several possible “hits.” First, we used
the site’s search feature to look for the phrases “cash for cars” or “buy
cars.” We opened the most-promising listing and cut-and-pasted the
phone number from that listing into the site search engine. Very often,
we found the same phone number used in listings offering vehicles and
vehicle parts for sale, usually listed “by owner.”
Cross-referencing NMVTIS data and monitoring free online classified
sites can pay big dividends for municipalities in revenue generation,
community enhancement, and public safety. By taking action, cities:
■
■
■
■
Eliminate curbstoning by rogue tow truck operators and illegal
auto salvage businesses
Protect consumers from unsafe vehicles and substandard parts
Protect the environment from unregulated vehicle
salvage operations
Protect local businesses from unlicensed, unregulated,
untaxed competition
■
Preserve neighborhoods from “pop-up” auto salvage businesses
■
Recapture revenues lost to vehicle and vehicle salvage fraud
Licensed vehicle salvage operators can do their part to protect their
businesses by complying with NMVTIS reporting requirements –
free reporting tools are available. For more information, visit
http://www.nmvtis.gov/nmvtis_auto.html.
Finally, consumers can be vigilant when they see vehicles for sale at
prices well below market value. As Craigslist warns auto shoppers:
“If a deal sounds too good to be true, it probably is!”
Stop
Curbstoning!
Please help us
About Stop Curbstoning
Stop Curbstoning is a cause supported by a group of concerned corporations and organizations within the automotive industry. Its
mission is to educate used car buyers, unite car dealers, and motivate municipalities to take action against this growing problem.
Stop Curbstoning was founded by AutoTec, LLC, a privately held company based in Birmingham, AL. AutoTec’s flagship product,
AuctionACCESS, is the automotive remarketing industry standard for managing dealer access to wholesale auto auctions.
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