Both Smotherman and McGregor told Dealernews that the businesses always offer dealers the option of reserve contracts. Smotherman said that, at his attorney’s advice, MPA contracts over the last several months included a signature line showing dealers declined a reserve contract.
"People are sending hundreds of thousands in product. Why would a guy sign a contract if he didn't understand it?"
-- Donnie "Mike" Smotherman
In many cases dealers simply sign contracts they don’t understand, and then are unhappy after their machines bring less than they expect at auction, Smotherman and McGregor said.
“On the signature line it says that they have all four pages of the contract, that they have read it and that they understand it,” Smotherman said. “People are sending hundreds of thousands in product. Why would a guy sign a contract if he didn’t understand it?”
McGregor added that many dealers whose vehicles don’t bring as much as expected become bidders when they see what they can get for low prices from the auctions.
“A lot of the time they tell the story that something sold for half: ‘I’ve got a $10,000 bike and it went for five grand,’” McGregor said. “Whatever that percentage is, it is equally true that you could make money. Whether it is on your end or the auction, [a sale] is a one-time loss.
"You are welcome to buy. Anybody can. That is America at its best.”