When making a new or used car purchase, it is important to know who you are buying from, and the potential risks that you may experience. Here are the top car buying scams and ways to stay protected against them:
Odometer fraud is the act of lowering the mileage reading on a vehicle to appear more appealing to potential buyers, which may include disconnecting, resetting, or replacing the odometer from a vehicle without authorization.
You can determine a vehicle’s true mileage by comparing its condition to a detailed history report, and find out whether the odometer has been tempered with.
Online marketplaces such as Craigslist are known for having great deals and offers, but one downside is that they can also lead to overpayment scams
. For example, say you list your car online instead of trading it in at the dealership. A fraudster then makes an offer that is significantly higher than your asking price, and justifies it by saying that the excess payment is set to cover the shipping cost overseas.
You deposit the check into your bank account, but you receive a call after a few days stating that the check is fraudulent and must return the funds back to the bank. You are now at a total deficit as you have lost both your money and the car shipped overseas.
Deceptive Advertising or “Bait & Switch”
A common term used across industries to describe fraudulent practices, it is a sales tactic applied to trick consumers into buying cars for more than previously advertised.
A bait and switch scam happens when a vehicle is marked at an unusual low price, but proclaimed “sold” when the customer voices interest.
The strategy behind this scam is to convince the customer to buy a vehicle close to the low initial advertised price, and then catch the customer by surprise with miscellaneous fees at closing.
Tips to Stay Protected
As your Members’ Watchdog, we want to ensure that you are able to get the best out of any car deal, consider these tips to avoid falling victim to a car buying scam:
1. Take a close look
– A common rule of thumb is to take a look at the vehicle’s history report. It should include information on the time, location, and frequency of the services performed during the car’s existence. Use a credible title check service such as the National Motor Vehicle Title Information
System to get an accurate depiction of the car’s mileage in comparison to its condition. Appearances can be deceiving, so knowing everything about the condition of the vehicle can help prevent an odometer scam while influencing your purchase decision.
2. Verify who you are buying from – It is wise to profile the person you are buying from, especially when buying online. Ask for their phone number, and set up some time aside to discuss the car’s condition and history. You will have a better indication of whether you are buying from an honest seller based on his/her response and approach to doing business.
3. Track the money – In some cases, you may earn more by selling your car privately as opposed to trading it in at the dealership; however, there are risks that come with taking matters into your own hands. Avoid a potential overpayment scam by requiring the prospective buyer to pay in cash as opposed to accepting a check or money order. If paying in cash poses an inconvenience, arrange a meeting at a credible location, or involve a trusted third-party to assist with the transaction.
4. Go the extra mile – You can never be too careful when making a vehicle purchase, so get the car inspected by a trusted mechanic and body shop technician before closing the deal. A mechanic can help determine whether a vehicle is in need of mechanical repairs; a body shop technician has the expertise to recognize whether a vehicle has been enhanced or rebuilt. Signs of vehicle enhancement include mismatched body paint, inconsistent panel gaps, unevenly worn tires, and newer looking parts. By taking additional measures, you can figure out your future expenses and negotiate a better deal with the seller.
5. Simplify your experience
– It is best to do your homework upfront before visiting the dealer, not only to save money, but also to prevent bait-and-switch scams. Getting pre-approved
for an auto loan with SCCU puts the ball in your court by allowing you to negotiate with the dealer and simplify your purchase experience. Check out our tips for buying your new car
to learn how much you can save when you finance your auto loan with SCCU.
Staying aware and arming yourself with tips like these is your best defense against fraud! Visit our Fraud Center
and sign up to learn more on how you can stay protected.
Space Coast Credit Union