Since the geometric advancement of technology in the twenty-first century, there has also been a corresponding increase in scams. One business that has been hit hard is the car business because of its vulnerability. Car buying scams are on the rise, so watch out!
The economic situation has further worsened this problem in two ways. Firstly, fraudsters are driven by the hard economic situation, as a bad economy increases crime rates. Secondly, the buyers want cheap or more affordable vehicles because of the bitting economy; hence, the fraudsters capitalize on this vulnerability to dupe unsuspecting people.
To help you and your friends and family avoid falling victim to these scams, we will discuss what it is and the different tactics you should beware of.
Without further ado, let’s get started!
What is a Car Buying Scam?
A car-buying scam occurs when a person or groups of persons who sell or pose to sell automobiles fraudulently obtain money from a buyer. This person or group of persons who carry out the fraud are called scammers or fraudsters, and the technology they have mostly employed is the internet or SMS.
Common Car Buying Scams
Today, swindlers have several ways of defrauding people who want to get new vehicles, and many other methods are being discovered. Here, we will share 5 common car buying scams you should take note of.
1. Using Fake Escrow Account:
This is one of the common car buying scams for people acquiring automobiles online, and the fraudsters have perfected many ways to defraud people using this method. They usually advertise a highly demanded vehicle online, sometimes faking the website of a popular and trusted dealership. The price is often too good to be true.
After the negotiation, the purchaser is asked to pay a certain amount or all the money into an Escrow account for holding until the automobile is delivered. However, since the Escrow account is a fake one, they will lose the money.
Sometimes, the con artist may even advertise the vehicle on popular social media platforms and claim the reason for the sale is economic hardship, making the low price tag for the vehicle believable. Again, a fake Escrow account is provided for payment, and that will be the end of it.
Some of these fraudsters may even go the extra mile by claiming they live abroad or are willing to bear the cost of the shipment, all to get their victims.
2. Stolen Car:
This is another common group of car buying scams, and many of these tricksters pull this off by reducing the price of the stolen automobile. So many people have been pulled over because of riding a stolen vehicle.
The criminals behind this can even go to the extent of falsifying papers to make them legit. What makes this worse is that you will not only be losing your money but may have the possibility of you going to jail. Many people have been jailed innocently because of this.
3. Comouflaging Flaws:
This is also a common one, and most people who acquire used vehicles can relate to this. For this type of fraud to take place, the dealership may use stickers to cover visible marks or damages caused by an accident or some other event with the intention of hiding the damages from the purchaser.
They may take this further by using paints to cover the damages and then sell off the vehicle as an accident-free one.
4. Deceptive Negotiations:
This is another type of deception carried out by the salesman. Let’s say, for example, you bargained $1,000 for a particular vehicle. The salesman, who wants to deceive you, would say that the manager would not accept the $1,000 you priced because it goes for $2,000.
They may even tell you they can be fired if they go to the manager with such a price. They would encourage you to add, let’s say, $250 so that they can meet the manager on your behalf because they want you to acquire the vehicle.
You will then agree with this, but the salesman may end up taking coffee inside the office while you think they are a friend trying to help you close the deal by speaking with the manager on your behalf. They will come back and tell you the manager said the motor can only go for $1,500, and they feel it is a good price.
Because the salesman has gotten you to believe they are on your side, you will end up paying. Meanwhile, the price may be the $1,000 you originally priced or a little above or below.
5. Sales Add-On:
This type of fraud is one that is hidden in the paperwork. After spending time weighing your options in the dealership and finally deciding, you take the vehicle for a long test drive.
Then, you apply to obtain financing only to see extra charges buried within the paperwork for things like fabric sealant, paint sealant, or rust-proofing without your permission. These add-ons can cost an extra $100-500, and because you are too tired to check the paperwork, you may not notice them.
How to Avoid Car Buying Scams
Having delved into the more common car buying scams you may fall victim to when trying to get a new vehicle, it is about time we told you how to avoid them. Here are some tips:
1. Don’t Deposit Money on Escrow:
Except you are absolutely sure that the person or company you are dealing with is legit, don’t deposit money on escrow. To help you avoid being defrauded, you should avoid being greedy.
When the price is too good to be true, or the seller is promising you several things like free shipment to help you make your decision, be more careful. If you must make any deposit on Escrow, verify the authenticity of the Escrow company. If you are purchasing the automobile from a company directly, investigate it as well.
Use the business phone number to get more information about the agent or company from PhoneHistory. This step can save you lots of tears later.
2. Investigate Before Buying Used Vehicles:
If you are purchasing a used automobile from people you don’t know or from people you know but haven’t seen use the vehicle before, then no matter how good the offer is or the reason they gave for wanting to sell, always investigate them and the motor.
This investigation will not take much time and will save you not just your money but your freedom. You can search the Vehicle Identification Number (VIN) to know if it has been reported missing, confirm the license plate, and verify the vehicle’s documents.
When you notice any red flag, you should know it is time to call off the deal. Beware that the price for stolen motors is usually cheaper, so don’t let that cloud your judgment.
3. Take Time to Inspect the Automobile:
Don’t be in a hurry to close the deal when getting an automobile. Take your time to inspect the vehicle and request any sticker to be taken out to confirm the damages.
During the inspection, if you are not too familiar with automobiles, be with a mechanic. Take the car for a long test drive and cross-check again when back from the test drive to be sure that it is in good condition.
4. Check Sale Price:
Before dealing with the salesman, request the sales book or invoice to confirm the real price of the automobile. No matter how smoothly the salesman talks, request to speak directly with the manager if there are things you are not clear about.
You can request that the paperwork be emailed to you so that you can take your time and study it properly before processing payment in order to avoid salesman add-ons or deceptive high prices.
Buying automobiles comes with several possibilities of being scammed, which can range from paying money into a fake Escrow account, camouflage flaws, stolen vehicles, deceptive negotiation, to sales add-ons.
You need to make sure that you don’t deposit money into an Escrow account that you have not verified to be authentic. Also, double-check the vehicle and remove stickers to see possible flaws.
Investigate the vehicle particulars to avoid purchasing a stolen one and take your time to check all paperwork before any payment begins.
All these should be in place so you can have peace of mind when taking your new vehicle home.