[horsawlarway]

Most auctions just don't allow real inspection at all. At best they pop the hood and let you look at the undercarriage or drive the car by for a minute (and quite a few auctions will ask you to pay for even that tiny amount of inspection).

That said - odometer fraud is a big fucking deal here. A vehicle with unknown mileage is worth far less at auction (just the fact that it's unknown is a huge flag) and if the auctioneer was aware of the fraud (as they're implying Holman Fleet Leasing was) then I'm curious to see how this is resolved... a smaller auction house would likely see jail time for several employees.

[dredmorbius]

One would think that the auctioneer would benefit from maximal disclosure, as the present situation as you describe it is precisely that portrayed in Akerlof's "The Market for Lemons":

<https://en.wikipedia.org/wiki/The_Market_for_Lemons>

Moreover, many states require regular smog checks, at least on passenger vehicles (though I'm not sure what the situation is for commercial vehicles). These entail a comprehensive electronic data record, much of which is automatically captured from the vehicle, and which is available for sale. Auto insurance companies have used these data for years, if not decades, to set policy rates as miles driven is a principle driver (ahem) of risk.

If VINs are avaiable for the vehicles being auctioned, it's possible that a service such as CARFAX might carry such data. I suspect bulk / corporate buyers would tend to have access to such information, whilst small-time operators / individuals likely would not, which throws an additional bias into such auctions.

[HWR_14]

The auctioneer knowingly keeping a secret that could cause a downturn in the market once discovered and publicized in years and in the meantime keeping a giant client sounds very rational.

[JamisonM]

Auctioneers would simply have a standard practice with respect to disclosure to protect their reputation, not keeping secrets. I know of none that advertise that they use a computer to verify the mileage/hours on equipment - if one did I am sure they would advertise it and be religious about its execution.

[dredmorbius]

It's a short-term optimisation which severely discounts future reputational and legal costs and consequences.

Though, yes, reality tends to be messier than economist's idealised models.

[registeredcorn]

> Most auctions just don't allow real inspection at all. At best they pop the hood and let you look at the undercarriage or drive the car by for a minute

Why is this? Just a time restraint thing, or what? I don't understand why an auction wouldn't allow bidders an opportunity to check out the product before they purchase. The pessimist in me would say it's in the auctioneers best interest to give as little information as possible, in order to get the highest bids, but it seems odd that this sounds to be a standard practice.

Shouldn't bidders insist on at least a single 3rd party to say the mileage for the crowd?

[justinator]

Well it's being sold at auction, not by the first party and it's very likely that any questions a bidder has can't be answered anyways. You take your chances and the payoff is a good deal for you. The auction makes money from volume.

I agree though that changing the odometer is criminal to do. But one shouldn't be buying cars at auction unless they know what they're doing. Buying a used FedEx van at auction comes with a few known... stipulations.

[registeredcorn]

Ah, that's a good point I hadn't considered. Thanks for the response. :)