In every purchase transaction, there is always the risk of being shortchanged. Due diligence should be exercised in buying used cars. Instead of getting value for your money, you may end up paying more than the posted price. Do a background check by reviewing car history reports before buying.
In this article, we have listed the most common frauds you may encounter in buying used cars. Make it a point to check the VIN to uncover any fraudulent schemes that may gyp you of your hard-earned money.
The most common fraudulent schemes of nefarious car dealers and sellers are the following:
Title washing occurs when the vehicle records are cleared of adverse facts by exploiting the incompatibilities in title transfers among different states. For example, certain states may not have the equivalent ‘flood damaged’ title as other states or may have different standard or threshold of the damage mentioned. And as thus, they get away with the red flags on the history of the car by transferring the venue of transaction to other states.
1 out of every 44 titles in the US is said to have been washed. Some estimates put the total number of cars with a washed title as high as seven figures.
VIN Cloning refers to vehicle identity theft by interchanging one with the other. To make this scam work, the vehicles involved must be identical. One vehicle will have its original VIN replaced by the VIN of the better car. This way, the buyers will see a different vehicle history when the VIN is scanned.
In 2009, a $25 million car cloning ring, which included a thousand stolen units, was busted by the FBI in Tampa. It was the biggest VIN cloning scam ever discovered.
An odometer rollback happens when the odometer display is tinkered and returned to its previous record. The lower the mileage, the higher the price the seller may impose, as dictated by most pricing guides.
On average, there are about 450,000 reported cases of odometer rollback every year. This translates to a staggering $1 billion annual loss on the part of the consumers.
Both mechanical and digital odometers are susceptible to this kind of manipulation. Although the latter is harder to alter, digital evidence of tampering is more difficult to detect.
This crime is as old as human history itself. It can be as simple as unauthorized modification of a document, or as complicated as producing a counterfeit document.
While law enforcement agency has become more effective in fighting forgery over the years, it happens still, especially in the case of stolen vehicles.
Hence, it is always important to get in touch with DMV agencies and review multiple vehicle records to confirm the veracity and authenticity of the documents of the car.
Be careful of any unwarranted fees when buying a used car. A seller may demand more than what a car is worth because of exaggerated claims or through bloating the value of accessories introduced. Some sellers may even claim to have spent for added features even though they were already in the car when they were originally released by the dealer.
As for dealers, they may include hidden charges at the last minute of the negotiation. To that end, it is highly recommended to compare different sellers and consult pricing guides in order to get a good proximate of the right price.
Sellers may make bold claims about the vehicles to boost the price. In order to be sure, review the records associated with the car. Bring a trusted mechanic with you to verify any issues. There might be problems that the seller deliberately refrained from disclosing to you.
Even though cars are becoming more secure because of technological advances, we should never lower our guard when it comes to frauds. Scammers get better and adapt with times, so you cannot rule out the possibility of being deceived by their false pretenses and promises.