Dealers ‘have an issue now, which is that we don’t have enough inventory’

NAPERVILLE, Ill. — At the height of the coronavirus pandemic in mid-April, used-car dealer Alex Tovstanovsky had vehicles jammed six rows deep on his lot in the western Chicago suburb of Naperville.

But the seeming oversupply was not a mistake.

Despite plummeting sales at his store, Prestige Motor Works, Tovstanovsky was betting on a recovery, buying dozens of cars in early April as auction prices for used vehicles dropped.

That bet is now paying off. Tovstanovsky can offer cars cheaper than local competitors, and his sales jumped 38% in May versus May 2019.

“This is an election year, and I felt the Trump administration and the Republicans in Congress would do whatever it took to keep the economy strong,” Tovstanovsky said.

Rising demand has now pushed used-vehicle prices about 20% higher than when Tovstanovsky made his bet.

“I just wish I’d bought more cars when prices were low,” Tovstanovsky said.

As America shut down in March to combat the spread of COVID-19 and its economy tanked, U.S. new-vehicle sales plummeted. Sales were down around 30% in May, an improvement from a 47% drop in April.

But used-vehicle sales have rebounded faster.

Dealers are now competing to buy vehicles, even as the U.S. economic outlook remains uncertain.

“We actually have an issue now, which is that we don’t have enough inventory,” said George Arison, co-CEO of online used-car seller Shift. Shift’s sales rebounded to pre-COVID-19 levels by late April.

Americans typically become more frugal and favor used cars in uncertain times. Cars remain a vital commodity in a country where getting to work without a vehicle is impossible in all but a few large cities.

Rising used-car sales increase competition for automakers who must sell new cars to offset cash burned during a two-month shutdown for the North American auto industry.

According to Cox Automotive, new-vehicle sales for the week ending May 28 were down 28%, but sales of used vehicles were up 6%.

According to Cox unit Manheim, wholesale used-vehicle prices rose 5.74% in the first half of May from the previous month.

Carmax Inc, the No. 1 used-car dealer, has already called back about two-thirds of the 15,5000 employees it furloughed in April.

“We expect to come out of this in a position to take advantage of the resiliency of the used-car industry,” said chief marketing officer Jim Lyski.

While dealers say access to financing is plentiful, Wells Fargo & Co said this week it will stop offering loans to most independent dealers due to economic uncertainty.

‘Melting ice cubes’
Used-car dealers say recent customers have ranged from deep subprime borrowers using their $1,200 federal pandemic relief checks for a downpayment, to prime borrowers with pristine credit who saved money working from home since March.

“I’ve seen a lot of downpayments this month of exactly $1,200,” said Scott Allen, owner of Auto Land in Fort Worth, Texas, which sells older used vehicles. After being closed for nearly a month from March 23, Allen’s sales in May were up 55% over his average for that month.

The U.S. used-vehicle market has distinct layers. At the top, in terms of price, are vehicles returned after short-term leases that look nearly new. Those are a concern for the industry.

More than 4 million off-lease vehicles are due to return to the market this year, at a rate of around 340,000 per month.

Automakers and their finance arms are trying to slow the pace at which those vehicles hit auctions to avoid flooding the market.

KAR Auction Services Inc has bought 200 acres (0.81 square kilometer) of land and is seeking another 100 acres to store cars for major customers.

Tom Kontos, chief economist at KAR, which alongside Manheim dominates the U.S. used-car auction market, calls these vehicles “melting ice cubes.” They lose value every day, and cannot be held back for long.

Franchise new-car dealers are driving demand for used cars to fill lots short of inventory because the coronavirus shut down assembly plants.

Ten of the top 15 models sold at U.S. franchise dealers were used rather than new between May 22 and May 28, according to automotive marketing platform PureCars.

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This year began with auto insurance buyers shopping around more than ever but by mid-March shopping began to slow down before returning to normal a few weeks later.

According to the data firm LexisNexis, shopping has closely mirrored other pandemic developments — from a marked decrease correlated to the stay-at-home orders to an increase that appears to coincide with the timing of the federal stimulus checks. Premium rebates offered by many auto insurers also had an effect.

U.S. auto insurance shopping showed an average year to year growth rate of +7% from January through early March, according to the LexisNexis Insurance Demand Meter, a quarterly analysis of shopping volume and frequency, new business volume and related data. This began to change on March 16, when shopping declined to -11% year-over-year growth, the lowest level in more than a decade. Activity rebounded a few weeks later, returning to an average growth rate of +8%.

Similarly, new business volume growth has decreased at unprecedented rates, shrinking -10% in March and -14% in April. For Q1 2020, this represents a decline of 52% compared to Q1 2019 and tracks to a historical five-year average decrease, according to the meter.

“The year started with the highest shopping rate ever, with 41% of all policies having been shopped in the past year. But it became clear that COVID-19 started to affect auto insurance shopping activity in mid-March,” said Chris Rice, senior director of data science, insurance, LexisNexis Risk Solutions. “Not only did shopping volumes decrease, but new business volumes dropped even more as most carriers offered short term rebates to existing customers, making it difficult for consumers to find lower premiums with a new carrier.”

The LexisNexis meter shows that among the states with the highest coronavirus cases, New York’s growth rates dropped the fastest and bottomed out at -26%. Countrywide, shopping volumes dropped as much as -31% to as little as -6% compared to Pre-COVID volumes.

The pandemic has had the biggest impact for shoppers ages 35 and younger with growth rates down by more than -20% among this demographic group. Shoppers ages 55 and older kept on pace and their shopping even surged by 32% around the time of stimulus checks. Since then shopping has leveled off to the pre-COVID growth rate, according to the LexisNexis data.

Across the three types of insurance shopping channels – direct, exclusive agent and independent agent – the direct and independent agent channels took the biggest hits during the worst of the pandemic at -26% and -24% respectively. By contrast, exclusive agent carriers saw a far more modest decline of -9%.

“The U.S. auto insurance market has shrunk as a result of the pandemic, but carriers giving money back and the pause in cancelling policies for non-payment have also likely helped stabilize these shifts and could help it rebound,” said Tanner Sheehan, associate vice president of auto insurance at LexisNexis Risk Solutions.

Sheehan said insurance shopping and new policy purchases can be seen as barometers for broader consumer behavior as well as reflections of specific insurance market conditions relating to rate levels, advertising spend, and changes in mobility.

Rice said the next few months will reveal if the market balances itself due to changing unemployment rates and advertising.

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This example was used by Pirelli to test tires

Collectors who find limited-edition hypercars with a multi-million-dollar price tag a little bit too stodgy will soon have a rare opportunity to add a real Formula One car to their fleet. Toyota donated the first example of the last car it built to compete in the series to a charity auction whose proceeds will go towards COVID-19 relief.

Wearing chassis number 01, this TF109 participated in a battery of tests leading up to the 2009 Formula One season. It was driven by several professional pilots, including Henkie Waldschmidt, Jarno Trulli and Timo Glock, but it never lined up on the starting grid of a race. Instead of stuffing it in a dimly-lit museum, Toyota passed the TF109 to Pirelli who used it as a high-speed test mule for tires. It was stripped of its red and white livery and put in the hands of well-known pilots (including Romain Grosjean) until it finally retired in 2011 after covering about 30,000 kilometers (approximately 19,000 miles), which is enormous for a Formula One car.

There’s little evidence chassis number 01 has moved much since 2011. It’s being sold as a complete car and it’s still fitted with its 2.4-liter V8 engine, but we don’t know whether or not it runs. That’s likely of little interest to its future owner; starting a Formula One car is a dauntingly complicated task, and maintaining it requires a full team of technicians. It’s more likely to become a rolling work of art than to start a second racing career.

It’s difficult to put a value on a Formula One car. It’s not like you can browse Bring a Trailer until you have an accurate idea of how the last 27 examples sold have performed. RM Sotheby’s hasn’t provided a pre-auction estimate, but we wouldn’t be surprised if bidding crosses the seven-digit mark, especially considering the proceeds from the sale will be donated to the International Federation of Red Cross and Red Crescent Societies.

RM’s Race Against Covid auction will take place online — where else? — between June 15 and 22. Eight lots have been detailed as of writing, including the aforementioned TF109 plus a racing suit worn by Sebastian Vettel in 2019, a bundle of equipment signed by top drivers like Lewis Hamilton, and a day in Ferrari’s racing simulator. RM previously announced the auction will include over 60 lots, so there may be other cars up for grabs.

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Detroit inquired about the vans after becoming aware of Honda-modified vehicles used in Japan.

American Honda delivered 10 Odyssey minivans to the city of Detroit today, each one modified to enable the safe transport of potential COVID-19 patients to medical locations for testing and/or treatment. Engineers in Raymond, Ohio, modified the ventilation systems in the Honda Odysseys to maintain an air-pressure differential between the front and rear seats, as well as installed plastic barriers behind the front seats with an aim to better protect drivers and health-care workers from becoming infected with the novel coronavirus.

Honda engineers in Japan in April designed the system for domestic-market minivans to be used to transport coronavirus patients in the Tokyo area. News of the JDM Honda minivans led city of Detroit officials to contact the automaker about the potential for such a system in the U.S. As of Monday, Michigan counted 43,950 confirmed coronavirus cases, the majority in the Metro Detroit area, making it a hot spot for the disease in the United States.

The engineers at Honda Research & Development in Ohio brought the Odyssey minivan modifications from initial concept to completion in less than two weeks, the automaker says. The North American market Honda Odyssey is a larger minivan than the JDM minivan used in Tokyo.

Honda joins other automakers in assisting during the pandemic, which has seen global vehicle production largely halted for several weeks. Ford, for example, is using some of its facilities to produce medical ventilators, masks, face shields, medical gowns, and other equipment, as has General Motors.

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Our roads are pretty empty right now without the daily errands, school runs, and commutes we’re all so used to. In some of the U.S. ‘s most traffic-clogged cities, the lack of snarls is practically unprecedented.

For example, according to the New York Times, average rush-hour speeds on the Brooklyn-Queens Expressway have increased a staggering 288 percent since stay-at-home orders were put into effect there. The Los Angeles Times reports drivers of the infamously awful 405 are averaging more than 70 mph when just a few weeks ago they would have been traveling at perhaps 40 mph.

Empty roads are great. They make commuting less onerous and allow you to enjoy your car. What’s not great the righteous few who use them as an excuse to quench their need for speed while everyone else is being responsible and staying home (or still driving the speed limit if they must be on the road). Case in point: Another report from the Los Angeles Times states traffic citations for speeds in excess of 100 mph are up 87 percent.

It’s not just in California. It’s happening all over the country. Ohio has reported the same phenomenon and so has Georgia. Then there are the goons who set a new cross-country “Cannonball” record racing from Los Angeles to New York.

This needs to stop.

Driving your (suddenly clear) favorite roads at life-endangering speeds isn’t just reckless, it’s stupid. Getting 15 minutes of fame from a sick YouTube video isn’t worth endangering countless other people. In fact, nothing is.

Less than a week ago, two men were killed in Oakland after driving at 100 mph and crashing into the back of a big rig. They also weren’t wearing seatbelts, which is not only seriously dangerous but illegal in California and 48 other states. Their friends and relatives are left behind to pick up the pieces all because two guys placed selfishness over smarts at 2 a.m.

Now let’s say these two guys were lucky enough to have survived that wreck. These men would no doubt be in serious condition and in need of immediate medical attention and trauma care, which puts additional—and unnecessary—strain on a hospital system already terribly overstressed and understaffed during a global health crisis. It’s all entirely avoidable.

If you want to drive fast, go to your local drag strip or take your car to a track; if they’re closed for now, wait until they’re open. Put your vehicle and your skills to the test in a closed, safe environment to see if you’re really as fast as you think you are. Odds are, you probably have some work to do. We can’t all be Randy Pobst.

If you’re reading MotorTrend, you probably love driving as much as we do. We’re fortunate enough to test some of the quickest cars to ever hit the road. But we test our cars on a track and we use closed roads to film. Those fancy burnouts and drifting shots you see in our magazine and on our website, as well as on the numerous shows on the MotorTrend App, weren’t done while putting anyone in danger who hadn’t specifically assumed the risk.

This isn’t to say we at MotorTrend are perfect drivers. We’ve been caught for exceeding the speed limit in the past, and have paid the fines for doing so. But we also realize that the street is not a racetrack. We know and respect that a love of speed is far less important than the safety of others on the road.

So do everyone a favor and cut out the ridiculous speeding. Pay attention to the road (including putting down your phone), obey all traffic laws, and wear your seatbelt. It might save your life—and someone else’s, too.

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Many websites offer auto insurance information. You can actually get lost in a sea of them if you are not careful. Sorting through it all to find information that is relevant to you may not be fun, or fast. Luckily, you will find everything you need to know right here. Read on for more.

To make sure you are getting the best deal on your car insurance, get quotes from at least three different insurers. You can choose to deal with individual insurance companies or you can go to an insurance broker, who can represent several companies and get you quotes from each one.

You may be able to save a bundle on car insurance by taking advantage of various discounts offered by your insurance company. Lower risk drivers often receive lower rates, so if you are older, married or have a clean driving record, check with your insurer to see if they will give you a better deal.

When buying car insurance, consider what coverage you actually need against what coverage is being recommended by the agent. If your car is worth less than about five thousand dollars, collision coverage is probably costing you more than what would pay out in an accident. However, property liability coverage is vital, as it protects you against having to pay out for damage to another party’s car or other property.

Having an expensive car or car that is considered a sports car will often increase the price one pays for auto insurance. If one does not like the sound of that then they should consider getting a different type of car. It will not only save them insurance money but often money off the car itself.

It’s possible you could remove a few of the coverage items from your insurance policy. The comprehensive and collision coverages are worth reconsidering for an older car. You may benefit from adjusting these downward, or even drop them entirely. By dropping this coverage, you can significantly reduce your monthly premium. Comprehensive and liability coverage are some other things you may want to consider cutting.

Your insurance premiums are based on your demographic information. This means that certain categories of people will pay more than others. If you find your insurance too high, perhaps someone else can insure it in their name for you. This is not illegal if this is a shared vehicle.

Be a safe driver. This one might seem simple, but it is very important. Safer drivers have lower premiums. The longer you remain a safe driver, the better the deals are that you will get on your car insurance. Driving safe is also, obviously, a lot better than the alternative.

Make sure that you closely analyze exactly how much coverage you need. If you have too little than you can be in a very bad situation after an accident. Likewise, if you have too much than you will be paying more than necessary month by month. An agent can help you to understand what you need, but he may be pushing you for too much.

Check to see if your auto insurance company has a discount for not filing claims. Sometimes if you haven’t had any claims for a period of time, you may be eligible for a discount. If they aren’t upfront about the discount, ask them. Having no claims can reduce your insurance.

Know the laws in your state concerning auto insurance. In almost every state, car insurance is compulsory. You can face stiff fines and penalties for not carrying adequate car insurance. Some states are even known to jail repeat no-insurance violators. Educating yourself is important so that you can comply with the laws.

Whenever possible, avoid filing and submitting minor claims to your vehicle insurance provider. Unfortunately, increased reliance upon insurance services directly translates to significant increases in monthly rates. Consider filing claims only if you are unable to cover the cost of repairs, and if failure to have repairs creates an unsafe driving condition.

Take advantage of every possible auto insurance discount. Some insurers list all of their discount possibilities on their websites, while other insurers are not so forthcoming. You may need to telephone your agent and ask them to list all the discount options for you. Research what other companies offer so you are prepared to ask questions. Can you get a discount for going to defensive driving school? How about accident forgiveness? Do you get a good driver discount? Ask about any discounts on deductibles for good driving history, and loyalty discounts for staying with the same insurer.

Get a new car to save money on car insurance. The car you drive makes a lot of difference to an auto insurer. If your car is one that gets stolen often, look out for higher rates. If you buy a sporty coupe that goes very fast and gets lots of tickets, expect to pay much higher insurance premiums. Check out sites such as Kiplinger.com for lists of the cheapest cars for auto insurance.

If possible, pay for your auto insurance in one lump sum. When you pay your insurance premiums monthly or quarterly, insurance providers can charge you an administration fee and interest on the money that you owe. The interest rate is also likely to be much higher than the interest rate you could get on a personal loan.

Add an anti-theft device to your car, either in the form of an alarm or simply a locking steering wheel bar. Most car insurance companies offer significant discounts for cars that have anti-theft devices. The cost of replacing your car after theft is a significant part of your auto insurance premium, so reducing that risk reduces your premiums.

Sifting through a sea of information is not easy, as discussed at the beginning of this article. Now that you have read the great advice here, you can go forward with confidence about what you have learned. Refer to this auto insurance information anytime you need to refresh the concepts discussed here.

After shutdowns in China, Europe, the U.S. finally halts its car factories.

The chips are falling. As communities and whole countries go into lockdown, and people are unable to go to work and have stopped buying cars, more auto plants are closing temporarily for both health and economic reasons and that includes key facilities in the U.S.

The initial impact was felt in China, which was the first country to experience the COVID-19 coronavirus, the first to impose quarantines, the first to close plants and the first to see dramatic sales falloffs of about 80 percent for most automakers. China is now restoring production. Next came Europe, and the auto industry there is feeling the pinch. FCA, Ford, Ferrari, Daimler, Lamborghini, and others have idled European operations.

Rolls-Royce Motor Cars said today it will suspend production at its Goodwood plant for two weeks starting March 23, which will be followed by the previously planned two-week Easter shutdown for maintenance. The moves are in keeping with the U.K. government measures to slow the spread of the coronavirus. “This action has not been taken lightly, but the health and well-being of our exceptional workforce is first and foremost in our minds,” said Torsten Müller-Ötvös, CEO of Rolls-Royce, in a statement. “We are a tight-knit community at the Home of Rolls‑Royce and I have no doubt that our resilience will shine through during this extraordinary time.” He also apologized for any inconvenience to customers.

But What’s The Impact Here In The U.S.?
Now it is the U.S. ‘s turn. The United Auto Workers (UAW) union wanted General Motors, Ford, and FCA to shut down their domestic plants for two weeks. The Detroit Three and UAW formed a joint task force to increase safety and health protections for factory employees and help slow the spread of the novel coronavirus. It has been a fast-moving series of decisions. After lengthy negotiations, the automakers initially agreed to rotating partial shutdown of facilities, extensive deep cleaning between shifts, longer periods between shifts, and extensive plans to avoid member contact. “They will be working on shift rotation to minimize risk,” the UAW confirmed Tuesday night.

But by Wednesday afternoon things had escalated further. GM and Ford put out news releases saying they would temporarily suspend manufacturing in North America until at least March 30.

“We have agreed to a systematic, orderly suspension of production to aid in fighting COVID-19/coronavirus,” said GM Chairman and CEO Mary Barra. “We have been taking extraordinary precautions around the world to keep our plant environments safe and recent developments in North America make it clear this is the right thing to do now.” She said she appreciated the teamwork of the UAW “as we take this unprecedented step.” GM will take down the plants in an orderly fashion. Each facility will be told how they fit into the cadence.

Ford will take down its plants in the U.S., Canada, and Mexico, after the end of shifts on Thursday and they will remain down through March 30. Ford closed its Michigan Assembly Plant Wednesday morning after an employee tested positive for the coronavirus.

FCA later chimed in to say it will cease production at North American plants with some closing as early as today. All will be down through the end of March at which point the automaker will re-evaluate. CEO Mike Manley visited a number of plants this week to better gauge the best course of action for employees.

Honda today said it will stop making vehicles in the U.S. for six days, a loss of about 40,000 vehicles that would have been assembled from March 23 to March 31. The action affects vehicle assembly plants as well as engine and transmission plants. Affected plants are in Ohio, Indiana, Alabama, Canada and Mexico, covering a wide swath of models.

Some North American plants have already experienced hiccups with worried workers walking off the job. While most did not impact production, the FCA plant in Windsor, Ontario, stopped making minivans for 24 hours due to a work refusal. Volkswagen closed its Chattanooga plant for a day this week to give it a deep clean and to help employees find child care with many schools closing.

Is Tesla Essential?
Tesla did not stop production at its Fremont, Calif. plant even though six counties in the San Francisco area are under a shelter-at-home order. That prompted the Alameda County sheriff to declare in a tweet that Tesla is not an essential business which means it can “retain minimum basic operations” but could be forced to close some of its operations, including the plant in Fremont that makes the Model S, Model X, Model 3 and Model Y.

Tesla CEO Elon Musk sent an email to employees on Monday saying he would be at work but they do not need to come to work if ill or uncomfortable.

Availability of parts will also determine how long plants can operate. Ford was forced to stop production of the Ford Explorer, Lincoln Aviator, and police vehicles, at its Chicago Assembly Plant for about 24 hours when it could not get enough seats from a Lear plant where two workers tested positive for the virus and the parts plant was closed temporarily.

Dealers are also shutting their doors although some are keeping the service bays open, deeming them an essential service.

The Economic Hit To The Car Industry
A single week of lost auto sales in the U.S. has a huge economic ripple effect, according to Kristin Dziczek, vice president of industry, labor and economics with the Center for Automotive Research in Ann Arbor, Michigan. Sales are expected to fall off dramatically and the Center’s data shows a week of missed sales comes at the cost of about 94,400 jobs and $7.3 billion in earnings.

Most analysts expected U.S. sales to fall slightly in 2020 but now forecasts suggest it could reach double-digits if consumers don’t act on their pent-up demand and buy new cars when the world returns to more normalcy. But the crisis is not expected to be as severe as the financial downturn in 2008-2009 which resulted in bankruptcy filings by both GM and Chrysler, and left Ford teetering on the brink. All automakers made systemic changes to their operations to make them leaner and more productive to better weather future storms.

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Three people were charged in King County Superior Court in connection to two separate auto insurance fraud cases after investigations by Washington Insurance Commissioner Mike Kreidler’s Criminal Investigations Unit.

In the first case, Sawsan Al-Tamimi and Yassir Al-Mtowag each were charged with one count of filing a fraudulent insurance claim.

According to the investigation, Yassir Al-Mtowag rear-ended another car in Issaquah at 7:50 a.m. on Sept. 18, 2018. His uninsured 2014 Ford Fiesta was registered to his Lynnwood, Wash., business, Sunshine Market.

At 8:15 a.m., Al-Mtowag’s mother, Sawsan Al-Tamimi, called Progressive Insurance and added the Ford Fiesta to her policy. At noon, Al-Mtowag filed a claim with Progressive. He stated the collision happened after 9 a.m., but the driver of the other car told Progressive it occurred at 7:50 a.m. while she was driving to work.

The damage to both cars was estimated at $4,423. Progressive denied the claim and referred the case to Kreidler’s CIU.

In the second case, Moshe Kipersztok was charged with one count of filing a fraudulent insurance claim.

According to the investigation, Kipersztok’s GEICO policy was canceled for nonpayment on March 19, 2018. He reinstated coverage on his 2014 Audi Q5 effective April 5. On April 8, he filed a claim with GEICO for an estimated $6,438 in damage that he said occurred in a hit-and-run while the car was parked at a Bellevue restaurant on April 7.

GEICO ran a claim history on the Audi and found one filed with Travelers Insurance on March 23 for the same damage. Travelers denied the claim, which resulted from a collision with another vehicle, because of a dispute over which driver was at fault.

GEICO also denied Kipersztok’s claim and referred the case to Kreidler’s CIU.

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The seven-figure transaction price for Ford’s new 760-hp Mustang is going to a very good cause

The premise of paying a seven-digit sum for a Mustang might seem ridiculous to some, but in the charity auction world, that’s not an unheard-of amount of money to score the very first (or final) example of a hot car. As promised, the first production 2020 Ford Mustang Shelby GT500 crossed the auction block and has become the latest “first” to gavel for huge money. How much? The GT500 with the VIN ending in 001 was snapped up by Barrett-Jackson’s own Craig Jackson for $1.1 million.

As a refresher, the 760-hp, supercharged 2020 GT500 is the most powerful Mustang ever made, and outside of a for-a-good-cause, heated auction environment, it’s set to retail for $70,300. Our just-released test data shows the mighty Mustang sprints from 0-60 mph in 3.6 seconds and scorching the quarter-mile in 11.3 seconds at 131.6 mph. Around the figure eight, the GT500 posted a 23.5-second lap. For a little context, a Ferrari 812 Superfast did the same lap in 23.3 seconds, meaning the Ford is within spitting distance of some very elite metal.

The first-off-the-line GT500 wears a special one-off paint job that pays homage to the “Green Hornet,” a 1968 Shelby GT500 prototype. Since Jackson posted the winning bid, Ford allowed him to pick whatever color he wanted for the car, and even be on site during its assembly in Flat Rock, Michigan. The car will make its public debut at the Barrett-Jackson Scottsdale auctions January 11-19 alongside a number of other notable Mustangs from Jackson’s collection, including “Little Red,” a rare early GT500 coupe prototype that was discovered in 2018.

The money from the GT500 oo1’s sale is going to support the Juvenile Diabetes Research Foundation. Some 200,000 Americans under the age of 20 suffer from Type 1 Diabetes, the condition that the JDRF strives to fight. If you want more information on the JDRF and what they do, check out their site here. Oh, and this isn’t the first Mustang Barrett-Jackson has auctioned off for a good cause. Since 2007, the auction house has sold 20 Ford vehicles and helped raise more than $6.5 million for JDRF. If you ask us, there are few better reasons to plunk down more than a million bucks for a muscle car.

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Investigators from the California Department of Insurance, San Diego County District Attorney’s Office, and the California Highway Patrol have arrested four suspects for alleged involvement in an organized auto fraud ring reportedly costing insurers $500,000.

The arrests of the suspects were made late last week.

The auto fraud ring reportedly involved schemes with dealers purchasing damaged vehicles and then filing inflated claims, and even staging thefts

In total 10 suspects have been charged in this joint task force investigation dubbed Operation Dealer’s Choice.

Operation Dealer’s Choice was initiated after the San Diego District Attorney’s Office received a consumer call claiming the ring was purchasing vehicles at local auto auctions, and after insuring and registering them, filing fraudulent total damage or theft claims to receive unearned payouts from insurance carriers. The case was investigated by the San Diego County Organized Automobile Insurance Fraud Task Force made up of the California Department of Insurance, San Diego District Attorney’s Office and California Highway Patrol.

The investigation determined the ring purchased vehicles at auction that were already damaged, had high mileage, or both, at a significantly low dollar amount. Once the vehicle was purchased, registered and insured by a carrier, the suspects filed a total damage or total theft claim and the ring shared the profits.

Investigators discovered 35 possible fraudulent auto insurance claims were filed over a four-year period. Roughly 56 vehicles were used by the ring.

Numerous vehicles purchased by the suspects in this case had the vehicles’ odometer mileages “rolled back” in order to increase the value of the vehicle before it was damaged or reported stolen. The remaining vehicles had significant damage prior to being insured unbeknownst to the carrier, or are believed to be damaged by the group after being insured.

The ring victimized 12 insurance carriers including Nationwide, Stonewood, USAA, California Casualty, Allstate, State Farm, Liberty Mutual, Esurance, GEICO, Kemper, Wawanesa and AAA. The dollar loss estimate for this case is in excess of $500,000 at this time.

Suspects in this case reportedly used various schemes including incepting policies on a vehicle that had pre-existing damage, filing claims shortly after the policy’s date of inception, then letting the policy lapse shortly after collecting a check for their loss due to non-payment.

They also reportedly filed suspected “staged collisions” in which they would purposely damage vehicles to the point of a “total loss” to collect an insurance claim check for the damage. Suspects also “staged thefts” in which they got paid for the theft of their vehicle after they, themselves, made the vehicle disappear.

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