Most people are honest, however there is a percentage of people out there that are ready, willing and often able to scam unsuspecting used car buyers.
And it appears the opportunity to be scammed, or run into some other unforeseen issue when buying a used car, is more common than we might think (or want to believe).
Vehicle history check experts, HPI, tell us there’s a one in three chance that our next used car transaction could involve some kind of hidden problem.
HPI says used car buyers need to be aware of these seven scams and problems that can be found when buying used:
Clocking – One of the simplest scams going and most common, especially if the car being sold has a digital odometer.
An odometer displays how many kilometres a car has done; if it’s digital it’s just a question of hooking up a laptop with the right software, pressing a few buttons and setting the mileage to whatever you want it to be.
Always go through the car’s service history and check the mileage for each year – see that it goes up steadily and that it doesn’t suddenly drop.
Finally, make sure that when collecting the car, it shows the same mileage as when it was first viewed. It’s not unknown for the mileage to be reduced for a viewing, then to go back up once the car is being collected.
Cloning – A car is stolen and given the identity of an identical car, which is legitimate. The car probably won’t come with a Registration Document, but if it does ensure it’s not a forgery.
If suspicious contact the motor registry in your state/territory to check the authenticity of any paperwork.
Ringing – Ringed cars are like cloned cars, in that they’re stolen then given a new identity. The difference is that the stolen car assumes the identity of a written-off car.
This in itself should arouse suspicious, but selling a written-off car isn’t illegal; selling one that’s been stolen clearly is.
To protect against buying a ringer, make sure the chassis number on the car matches the one on the registration papers, look for evidence of the chassis plate having been tampered with and ensure you’re viewing the car at the address on the papers.
Buy a ringed car and you’ll lose it, along with your money, if the police catch up with you.
Cut and shut – This is arguably the most dangerous scam of all, as it’s the only one where the car is definitely sold in a seriously unsafe condition.
It works by buying two cars, cutting them both in half, then welding those two halves together. Such cars have no structural integrity and in an accident would literally fall apart.
Avoid buying a cut and shut by looking closely in the door shuts, around the top of the windscreen, underneath the seats and across the underside of the car for signs of welding.
The hire car scam – This hinges on hiring a car then selling it, which is obviously illegal but people do it anyway. The key is to make all of the usual basic checks, including analysing the car’s Registration Document. If that’s not to hand, walk away.
Fake escrow accounts – These accounts allow buyers to deposit cash with a third party until a transaction has been completed, so both sides have some level of security.
The buyer deposits money in the account and the car vendor will then disappear – with the buyer’s money. Even though it looks professional the escrow service is fake.
The key is to see if the escrow service is registered.
Deposit fraud – Some vendors put buyers under pressure to leave an unnecessarily large deposit to secure a car. However, a small deposit will show that you’re equally serious, but always get a receipt.
There is still a danger of being ripped off but this is a good way to limit any potential losses.
Four Steps to a Safer Used Car Transaction:
- Always pay with a bank cheque, not cash. Criminals don’t like these as they’re traceable – cash isn’t.
- View the car at the address on its Registration Document and check that the details on this piece of paper match those on the car.
- Don’t rely on just a mobile phone number to communicate with the seller. Get a landline number, although it’s still easy for a scammer to disappear once they’ve given you one of these.
- Ultimately, if you have any doubts about the vehicle or the seller whatsoever, walk away.
Barry Shorto, Head of Industry Relations at HPI, says it really is a case of ‘buyer beware’.
“Buying a used car can be stressful enough without having to worry about whether or not the vendor is trying to rip you off.
“There are a wide variety of potential pitfalls facing used car buyers.
“Despite there being so many ways for buyers to be caught out there are also numerous ways to ensure they are prepared and protected.”