Would you buy a used car--with cash--from someone you just met in the bar, and who walked you down a dark alley to show you the car? Not likely. How about from a well-dressed, friendly, middle-aged man or woman, who placed a classified ad in your local newspaper, and who meets you midday at a restaurant of your choice?
Oops! You may be more likely to be cheated by seller number two. That's the story of Jennifer Warwa, who bought a minivan and had her mechanic examine it. The mechanic later said how shocked he was that Jennifer had been scammed:
"Because I met the gentleman who was selling the vehicle. Very clean cut. In his fifties. Very soft spoken.... And he went with her to get it inspected. There was just no sign that was the kind of person he was" the mechanic told CBC's Marketplace.
A few months later, Jennifer got a phone call from the police. They said she had purchased a stolen minivan, and they were coming to seize it. She was so upset, she tried to hide the van from the police. Eventually they caught up with her and she ended up paying for a year and a half for a $5,000 bank loan on a van she could not drive. Ouch!
Jennifer was just one victim in the chain that included the original owner, the insurance company, other consumers whose insurance rates keep rising, and the police, who spend thousands of hours tracking thefts. According to the FBI, a vehicle is stolen about every 25 seconds in the USA, amounting to an $8 billion yearly problem.
Here's how these scams often work. Thieves target particular cars: for their value, their ease of resale as a whole or in parts, or because they are easier to steal. Years ago, most cars were stripped for parts, including unusual parts such as airbags. But today some thieves are so brash they sell cars through newspapers.
This newer scam is called "VIN cloning", because the Vehicle Identification Number is stolen from another car. Criminals obtain VINs by copying them from the dash of cars in parking lots--even at dealerships. Some even physically remove the VIN plate from vehicles in auto salvage yards that allow customers to "pick your own parts." (They do not mean that literally!) The number is used to falsely obtain new ownership documents, or documents are forged. Either way, a cloned VIN allows them to transform stolen cars into pseudo-legal vehicles that can be officially titled and sold. Many thieves work across state lines: cars may be stolen in the East, registered in the Mid-West, then sold in California. Scary!
Here's what you can do to avoid buying a stolen car:
** Check the VIN on the dash against the VIN in the driver's door jamb, under the hood, and on the paperwork
** Use the VIN to get the car's history at carfax.com for about $20
** Ensure title and registration documents match the name and address of the seller
** Is the car from out of state?
** Be suspicious if you must meet a private seller in a parking lot. Better to see that they live at the address where the car is registered
** Has the vehicle recently been transferred?
** Does the seller use a home or work phone number, or just a cell?
** Is the selling price oddly low?
** Be warned that some used car dealers are getting scammed, too
** Pay by certified cheque or money order, not cash.
Keep in mind that most private sellers are not thieves, but rather honest, regular folks like you. And prices do tend to be lower with private sales. So if you follow my advice, you can greatly improve your chances of driving away with a "genuine" used car.
About the Author: Will YOU get scammed on your next car purchase? Michael Trusthold teaches people how to save money when they buy a used car or sell used cars or used trucks, and has bought cars for profit for many years. For more scam prevention TIPS and handy checklists for used car buying and selling, visit UsedCars.biz.
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