A sluggish economy, high unemployment and rising costs of living mean consumers have to make every dollar count. Some prospective car buyers go online to find good deals on cars, but cyberspace can be a playground for scammers, according to the National Consumers League (NCL), which saw an increase in scam-related consumer complaints during the first quarter of 2011. The NCL, the oldest consumer group in the U.S., received more than 100 automotive-related consumer complaints between Jan. 1 and March 22, with reported losses totaling about $293,000.
"Scam artists prey on consumers in search of a bargain, and these scams are no exception," says John Breyault, director of the NCL Fraud Center. "Unfortunately, the only person that's getting a steal is the con artist."
"Consumers need to protect themselves from unscrupulous sellers," says Eric Widmer, vice-president of sales and operations for AiM Mobile Inspections (www.aimmobileinspections.com), a national service that has performed 35 million automobile inspections. "Car shoppers need to ... use the tools available to keep from getting taken advantage of."
In the used car segment, two products provide protection and information for consumers: used vehicle inspections, like those provided by AiM Mobile Inspections, which has 500 full-time inspectors nationwide focused on a vehicle's current condition; and a vehicle history report, such as AutoCheck, which provides information on a car's past.
Online used car scams generally involve a listing on sales and auction sites such as Craigslist, Yahoo! Autos, or eBay. The listings are generally for late-model automobiles at well below market value. In the schemes, when the victim contacts the scammer, they are told the seller is not local and that payment for the car or for vehicle shipping should be sent to the seller via wire transfer. Often, the seller claims to be a member of the armed services who is either already deployed or preparing to leave the country. As such, quick payment is necessary to ensure the buyer receives the "great deal" on the car.
You can beat the scam — and verify that the car actually exists — by requesting to have the vehicle inspected. Another rule of thumb: Never wire money for a sales transaction.
To overcome negative information on a vehicle's history report, some scammers tamper with a vehicle's vehicle identification number (VIN). Shady sellers sometimes search parking lots for a car with the same make, model and color, copy its VIN and use that information to obtain a bogus history report for the car they're selling. A professional vehicle inspection will uncover VIN tampering. There are a number of VIN locations on the car — you have to look at more than the dashboard and make sure they match.
A dealership or body shop often ends up with a car that's been in a collision, and sometimes information about the damage goes unreported, meaning it won't be on that vehicle's history report. A professional vehicle inspector, however, knows the telltale signs of accident repair — nonfactory welds, unpainted bolts or unaligned body panels — and can reveal hidden damage prior to purchase.
Title washing is transferring a once-salvaged vehicle that has flood damage or has been totaled, to a state with more lenient title laws. When the state issues a new title, it may no longer show that the vehicle had been salvaged. Title washing helps car owners remove "salvaged" and "flood-damaged" tags, allowing a person to resell the vehicle for a higher price.
Once a vehicle has been branded and that information is reported, however, it remains in that state's records regardless of how many states the car is sold in. A vehicle history report will divulge the information. Consumers also can request a title guarantee in writing from the seller. Having a professional inspector look over the car can uncover damages a seller is trying to cover up. "No matter how a seller tries to hide it, we'll let a buyer know if that car has been damaged before," says Pat Coady, a vehicle inspector for AiM.