Buying a used car instead of a new one can save you some money. But if you're not careful, you could fall victim to a shady dealer or private seller.
Common used car scams include curbstoning, title washing, odometer rollbacks, VIN cloning and lowballing. While some scammers' efforts may be obvious, others take some serious sleuthing to uncover. Here's how to spot these five scams and walk away before you get burned.
5 Used Car Scams to Look Out For
While these aren't the only ways unscrupulous dealers and private sellers may try to dupe you, they're some of the most common used car scams out there. Here's what they are and how to see through the fraud.
If you want to buy and sell cars as a business, you're typically required to obtain a dealer license, which requires you to abide by certain regulations, including lemon laws that protect consumers from dealers who sell defective vehicles.
Curbstoning is a scam that some dealers may use to sell you a defective car by posing as a private seller to get around those laws. They'll typically meet you at the curb in front of a private residence or an empty parking lot, giving the scam its name.
In other instances, a private party may buy defective vehicles and sell them to turn a profit without getting the required dealer license. To avoid falling victim and buying a defective car for more than it's worth, verify the title to make sure that it's in the seller's name. If it's not, it may be because they're trying to avoid a paper trail that leads back to them.
If a vehicle has been totaled, sustained water damage, has liens or has any other number of negative issues, it should be included in the title. However, some scammers illegally remove negative information by altering the title or moving the vehicle across state lines where a certain brand isn't recognized.
If you're not careful, you could end up buying a damaged or defective car for more than it's actually worth. Obtain the vehicle history report, which should list brands and other negative title information. Also, consider contacting your insurance company and providing the vehicle identification number (VIN) to see if it has any records on the vehicle.
This scam might seem like a relic from the past when odometers were analog, but according to the National Highway Traffic Safety Administration (NHTSA), 450,000 vehicles with false odometer readings are sold every year.
To spot a rollback, hire a mechanic to look for tampering and inspect the vehicle for wear and tear that doesn't match the advertised mileage.
You can also request to see the original title—not a copy—which will list the car's mileage when the document was created, or the vehicle history report, which may include the vehicle's mileage when certain events are recorded, such as service appointments and previous sales.
Each car has a unique VIN, which you can use to learn about the vehicle's history, track potential recalls, register the car and more. VIN cloning occurs when a scammer tries to sell a stolen car or a vehicle with a salvaged title by removing the VIN plate or etching on the vehicle and replacing it with one from a legally registered car with the same features.
If you buy a car with this problem and it's discovered, the car could be repossessed and returned to the original owner, or you could end up with a defective car. You'll find the VIN on the dashboard on the driver's side, as well as on the inside of the driver's door. Check to see if the two match and whether there's evidence of tampering. Also, request the original title to see if the VINs match.
It's not uncommon for car buyers to try to lowball sellers right out of the gate, but if a seller is trying to get rid of a car for a price far below its actual value, it may be a sign of one of the above scams or a different one.
Sellers may say they're willing to accept less because they just want to get rid of it or that they don't need the money. They may even say that it was in a minor accident but not provide any more details. In many of these scenarios, they may be hoping that the low price will keep you from asking further questions.
If you feel like a deal is too good to be true, take the car for a test drive to see if you notice any major mechanical problems. You can also request a pre-purchase inspection to look for any issues you didn't spot and the seller didn't disclose.
How to Safely Buy a Used Car
With so many scams out there, it's important to be vigilant about protecting yourself and your money. Fortunately, there are a few steps you can take to weed out most scams:
- Ask for a vehicle history report. Many private sellers will order one to make things easier for potential buyers. If they refuse, get the VIN and get one from Carfax or AutoCheck. You may be able to save some money by ordering multiple reports from one company if you're considering multiple cars.
- Hire a mechanic. A pre-purchase inspection typically costs between $100 and $200, but can save you thousands of dollars if the mechanic spots a major problem that the seller tried to conceal.
- Verify the seller's story. Using the original title and vehicle history report, you can usually get enough information to verify that the story the seller is telling you is true.
- Pay with a cashier's check. A cashier's check requires the legal name of the recipient, so if you do fall victim to a scam, you'll have that information. Avoid cash sales because they don't provide a paper trail.
The Bottom Line
Criminals can be incredibly creative and convincing with their scams, and if you get duped, they may have covered their tracks well enough to make it impossible to find them again. As a result, it's crucial that you be on your guard when buying a used car, particularly from a private seller.
If you find that you've been victimized by a used car scammer, file a police report and also contact your local department of motor vehicles, which may be able to help.