When shopping for a used car, everyone wants to get a good deal, and online car auctions and used-car classified sites make it easy to search, even nationwide, for your dream car at a great price. However, finding a car you love is only half of the battle; all car buyers should be prepared to do a little research and invest some time to make sure that you are not buying a lemon.
Being aware of the various used-car dealership and independent sales scams out there can help everyone narrow the search and ensure that a good quality, and road-worthy vehicle is purchased. We discuss three fraudulent ways that used-car dealers get around certification and safety checks, and other obstacles designed to eliminate unsafe vehicle purchases, and share tips that consumers can use to protect themselves from a bad purchase.
Curbstoning Used Car Sales
A quick check of Craig’s list or eBay, and you can find thousands of used cars for sale by private owners. Sometimes a purchase from a private owner is a great way to get a deal (or at least that is the consumer perspective), but frequently, it is a source for low quality, damaged, or potential dangerous motor vehicles, and a fraudulent practice known as “curbstoning.”
New and used car dealers are licensed to sell automobiles. There are federal and state regulations that govern the condition of the vehicle, and the information that is disclosed to the buyer. When a used car dealership finds itself with a vehicle that will not meet inspection standards, sometimes the best way for them to unload a car that cannot be legally certified is by private sale. Even though the vehicle belongs to a dealership, they can take administrative steps to make the car exchange hands as a consumer-to-consumer transaction. The national sales average is about $2,300 per vehicle, according to a research study conducted by a consumer watchdog group called “Stop Curbstoning.”
How do they do it? Curbstone sales people typically do not work for a dealership, or legitimate retail business. They regularly contact dealerships who accept low value trade-in vehicles for ‘opportunities.’ The dealership provides a full, legal disclosure of the vehicle, deflects and flaws, and frequently is duped into selling the car “for parts.” Since the vehicle history is registered, curbstone fraudsters may register the vehicle in another state, then remove the VIN or change it to avoid online car histories.
Many disreputable sales people take advantage of buyers who do not know how or where to research a vehicle to determine a serious safety flaw, or younger drivers who are willing to take a car “as is” to repair it, but end up driving it by finding loopholes in the certification process, placing dangerous cars on the road.
Protect yourself: Kelley Blue Book is a trusted website that can be used to look up the “book value” of any new or used vehicle. If you are considering purchasing a vehicle which is being sold for a far lower value than what is stated as the average sale price on the Kelley Blue Book, consider that you may be purchasing an at-risk or hazardous vehicle from a curbstone sales person.
Title Washing
Do you remember the number of new car dealerships in New York that had damaged inventory due to Hurricane Sandy? During Sandy, it was estimated that more than 250,000 vehicles were damaged significantly and deemed to be “unsuitable” in terms of safety for consumer sale. More recently in 2015, there were between 7,000 and 10,000 new vehicles in Texas that were damaged due to flooding, and “written off” by insurance companies, according to the National Insurance Crime Bureau. How many of those significantly damaged, illegal vehicles are on the road today, sold to unsuspecting consumers?
Thanks to websites like CarFax, which maintain an international record of the vehicle accident and claim history, title washing is a lot more difficult for fraudulent dealers to pull-off, but it still happens after virtually every major disaster like a flood or hurricane, where a salvaged vehicle title is transferred to another state that does not have “branding” legislation. Most states require a label of ‘rebuilt,’ ‘salvage,’ or ‘junk’ when a vehicle is written as a loss by insurance companies, but registering the vehicle in states that do not recognize a ‘salvage’ brand on the vehicle allows the title to be scrubbed clean in as little as a year.
What is the problem with flooded vehicles? Salt water is corrosive, and motor vehicles were not designed to be submerged in salt water. It is estimated that more than 100,000 of the Hurricane Sandy vehicles are back on the road now, although experts feel the number is likely higher. Air bags can also malfunction, wires and brakes may also be corroded, and flooded vehicles are unsafe to drive.
Protect yourself: If looking for a used car, educate yourself on some of the signs of a flooded vehicle. Corrosion of metal, wires, and undercarriage are indicators, as is the presence of silt under the interior or trunk carpets, a rusted spare tire or tire iron on a new vehicle, and suspicious water stains on upholstery. California lemon law attorneys have valuable online resources to help Americans looking for a used car, and to reduce the risk of a fraudulent sale of unsafe vehicles.
Lying About Factory Warranty
One of the big perks of buying a used car is finding one that has a partial balance of the original factory warranty on the vehicle. Dishonest car dealership or independent sales people can advertise a car as having a factory warranty by leaving out some of the warranty disqualification details.
For instance, did you know that a vehicle that is used for commercial use (this can also include taxi driving or Uber business) is disqualified from the factory warranty? Warranties only cover personal consumer use, not extended commercial use or fleet vehicles. If the car has been involved in an accident, it may also be disqualified from a factory warranty. In terms of age and mileage, the car may be eligible for warranty, but many times, used car buyers are unaware of the disqualification of their vehicle, and purchase while assuming that they are qualified for the warranty.
Protect yourself: Ask for the VIN number of the vehicle that you are interested in buying, and the phone number for the warranty claim and processing center. With the VIN, you will be able to find out if the warranty is still valid on the vehicle before you buy it. Don’t rely on getting a report from the dealership or used-car salesman; make the call yourself for the full disclosure on any vehicle that you are interested in purchasing.
For more valuable advice to help you with your used-car search and purchase, visit the Federal Trade Commission (FTC) website for resources, videos, and guidelines for consumers. If you would like to check the VIN number of a vehicle that you are interested in purchasing, you can do it for free online at SaferCar.gov.