Know what to look for - and what to steer clear of - before shopping for a used car.
It’s tough enough having to pay the premium that good used cars command these days, but all too many motorists looking for a deal on a previously owned automobile are finding themselves victims of some surprisingly creative scams.
If anything, the situation may be getting worse, experts are warning, as buyers desperately seek better deals – while the crooks get more creative. Some of the most common rip-offs now involve the use of online tools like eBay and Craigslist. No, those sites haven’t gone over to the dark side. They simply make it easy for smart scam artists to prey on used car shoppers, especially those less savvy about the ways of a wired world.
But there are plenty of traditional rip-offs that can trip up even the wise shopper. The heavy rains that have struck the American heartland this year will almost certainly lead to a tsunami of flood-damaged cars that rip-off artists hope to sell by washing their titles.
“Scam artists prey on consumers in search of a bargain, and these scams are no exception,” John Breyault, Director of the National Consumers League’s Fraud Center, said in a statement. “Unfortunately, the only person(s) getting a steal are the con artists themselves.”
Want to avoid getting burned by your next used car? Here’s a guide to some of the most common scams and some tips on how to make sure you get what you’re paying for.
The Odometer Rollback is the oldest used car scam on the books, dating back to the days when the first odometers were installed. Sadly, the National Highway Traffic Safety Administration contends this problem is increasing despite beefed up enforcement and technological efforts to prevent the problem. In all, estimates NHTSA, used car buyers are paying perhaps $1 billion more annually than they should.
- How do you avoid buying a car with more miles than you see? Start by doing a title search on one of the dedicated services like Carfax.com or AutoCheck.com. They record vehicle mileage for every vehicle sale recorded in most states. If the numbers don’t match up, don’t buy.
This year’s floods mean plenty of cars have spent time underwater. And it only takes a few moments for the damage to be done. That can lead to excess rust, electric failures and other longer-term problems.
- There are several ways to address the issue. Start with a good visual inspection. Look for the sort of signs you’d expect for a car that’s been under water, some of those things not easily disguised by a scam artist, like rust in the trunk, moisture in the headlights or tail lamps, or mud, rocks and dirt in places you wouldn’t normally expect to find it. You might find power windows that don’t work or other electrical problems. Even if everything looks normal, also check out our next suggestion.
Title Washing is another unpleasantly common scam. This can cover flood damage, but it’s also commonly used for vehicles seriously damaged or totaled in accidents. Crooked owners or dealers will sometimes move cars from state to state to state, as record-keeping and registration policies vary across the country and a notation that indicates the vehicle was wrecked in one state may “wash” off when it’s moved to another state.
- The good news is that the federal government began to require totaled vehicles be listed on a national database as of 2009. But there are still ways to get around that, experts warn. Again, checking with a service like Carfax or AutoCheck can reveal problems that might have been washed away as a damaged vehicle moved around the country.
A similar scam with a similar resolution is the Hidden Lemon. By law, when a manufacturer buys back a vehicle that qualifies as a lemon – and here, state laws vary as to what constitutes a lemon – the title is supposed to be branded. Despite what you might expect, manufacturers often make repairs and put the car back on the market, and if there’s that “Lemon” on the title, they expect to sell the vehicle on the cheap. But makers sometimes try to sidestep the law by coming up with an informal settlement before lemon laws kick in. That means the title won’t be branded and the next buyer won’t necessarily know about all those nagging, seemingly unsolvable problems.
- Not unless they check those titling services, as we’ve already recommended. Many of them will provide access to a vehicle’s repair history. So, even if the word, “Lemon,” isn’t stamped on the title, it could become obvious a car or truck is going to be a service nightmare.
But what about those high-tech scams we mentioned? The NCL’s Fraud Center reports an alarming increase in rip-offs that revolve around sales through sites like Craigslist, eBay Autos and Yahoo! Autos. And to lure in likely marks, con artists often start by listing luxury brands and other desirable models at unexpectedly low prices – often by having ready stories to explain the logical discrepancy. They might be a “businessman transferred overseas,” or a “soldier set for deployment to Afghanistan,” a story that will tug on both your heart and your wallet.
Be particularly careful when you see a deal in vehicles like the Toyota Prius and other Japanese models that are, at least for now, in short supply due to the Japanese auto production shortages caused by the March 11 earthquake and tsunami.
The most common trick is tell a shopper that the car is located in some other part of the country and ask that payment be made by wire transfer or through some escrow service. Often, these thieves make a career out of their scam, creating a new, professional-looking but entirely fake escrow site for each new victim. By the time you realize you’ve wired your money into the void they’ve grabbed the cash and fled. They can pull off the scam again from somewhere else.
But it helps to recognize some readily apparent red flags, says the NCL and other consumer groups, such as:
- A too-good-to-be true price backed by a convenient story;
- A demand for payment by wire or escrow, especially if its not an accepted service like Escrow.com;
- Communications outside the normal processes that sites like eBay use precisely to limit fraud. If the buyer wants to communicate only by e-mail, start looking elsewhere;
- A seller that won’t meet in person and won’t make the vehicle available for inspection;
- And plenty of grammatical and spelling errors might also be worse wondering about, even in this age of text-mssg abbreviations.
Before we wrap up, here are a couple more. VIN Tampering usually involves changing the Vehicle Identification Number that’s absolutely unique to every vehicle. But sometimes a crook wants to get rid of an ID that might show a vehicle to have been wrecked, flooded to otherwise undesirable. Recall our comments, above, about totaled vehicles. Sometimes, to put one reasonably good car back on the road a scam artist will pull together the undamaged parts from several different vehicles out of a junkyard.
“I’ve seen two or three different VINs on a vehicle,” said Jason Soriano, of AiM Mobile Inspections. “Where a car that’s been in a collision has been pieced together, even though it’s illegal, and you find out there’s parts from more than one vehicle attached to this body. That’s not a car you want to buy.
- Solution? Again, check with a service like Carfax, though you can also do a quick inspection of your own, or turn to a mechanic familiar with performing checks on used cars. “There are a number of VIN locations,” notes Soriano, who adds, “You have to look at more than the dashboard – and make sure they match.”
A final word of warning: absolutely and unequivocally refuse to accept a deal that requires you to sign an “As Is” agreement. Many, but not all, states actually bar such sales. But if this option is presented to you, consider it a signal the car you’re looking at may have some problems you’ll only discover once it’s too late.