How to avoid falling for scams when buying a new or used vehicle
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Even with time and research, there are plenty of ways for car buyers to fall into scams.
A common scam associated with car buying is called yo-yo sales, involving auto financing loans, said Ira Rheingold, executive director of the National Association of Consumer Advocates, a nonprofit organization of attorneys and others.
In this scenario, a consumer will sign up for a loan through the dealer and later hear back that the financing fell through, Rheingold said. The consumer who bought the vehicle ends up signing a new contract with higher interest rates.
Rheingold suggests looking over the contract very carefully before signing for any added fees or language saying that the dealer can’t be sued.
“You need to go in sort of fully prepared to be cheated so that you’re ready,” he said. “Plan for the worst.”
Staying vigilant and alert when buying a vehicle is important. If a consumer feels as if they’ve been cheated, they might need to seek legal advice, Rheingold said.
In today’s auto market, consumers can be desperate to find the vehicle they want. When that happens, they cut corners and may not realize what they’re getting themselves into.
Auto scams may not be more prevalent now, but anytime demand is high and supply is low, it creates a recipe for fraud, Rheingold said.
“People get cheated the most when they are desperate,” Rheingold said.
For used-vehicle shoppers, here are tips from the Texas Department of Insurance:
- Too good to be true? If a price is amazing, an old car looks perfect or a rare vehicle seems cheap, there’s a good chance it’s a scam.
- Take your time. Scammers need to get your money before you’ve thought things through. If a seller says they’re moving soon, going overseas or selling fast for a relative, there’s a good chance it’s a scam. If they want you to pay with gift cards, it’s definitely a scam.
- Check the photos. Some scams use the same photo on different apps or websites, with different prices and contact information. Avoid this scam with a “reverse image search” to see if the same photo appears in many places. Look up “reverse search” to learn how.
- See it in person. Don’t send money until you’ve seen the vehicle. Make sure you choose a safe, well-lit, public spot to meet the seller. Ask to see the seller’s identification and make sure the same name is on the vehicle’s title.
- Take a drive. A vehicle could look perfect. Always drive it before you buy to see how it handles on the road. Try out all the vehicle’s features and ask for maintenance records.
- Check the VIN. Every car has its own Vehicle Identification Number. Check the VIN with the Texas Department of Motor Vehicles and National Insurance Crime Bureau to make sure a vehicle wasn’t stolen, flooded or listed as a total loss. Make sure every document has the same VIN before you buy. Check the VINs on the vehicle, too. If the VIN on the door doesn’t match the VIN on the windshield, a part may have been replaced.
- Are there liens? A VIN search will show if the owner still owes money on a loan for the vehicle. If they do, you could run into fraud and title headaches if you buy the car.
This story was originally published May 6, 2022 at 5:00 AM.
