Buying a car of any sort is a big deal - literally and figuratively - as you'll want to make sure you're getting the best possible set of wheels. But when there's money to be made there are scammers who are there to take advantage of it, and unfortunately used car scams are on the rise, especially when used cars are priced better than brand-new cars from a dealership.
So to help keep you safe from getting scammed when buying a used car, we're going to take a look at some car scams that are making the rounds, what to keep an eye out for, and what you can do to protect yourself.
Just remember that if you need support or someone to talk to, our Sonder support team is available 24/7 to chat whenever you need it.
What kind of used car scams are out there?
Used car ads are generally found on websites such as Facebook Marketplace, Autotrader, Car Sales, Car Guides and Gumtree. Sprinkled among legitimate ads are several scams you need to keep an eye out for:
Fake Sellers - This involves the scammer putting up ads for vehicles they don’t have.
Some stories the scammer may use in this scam can include:
Pretending to be a defence force member who needs to sell their vehicle before being deployed.
Claiming to be awarded a vehicle through a divorce settlement and want to sell.
Fake Buyers - Scammers approach legitimate sellers from different states/territories.
This is a multi-step scam that starts with the scammer arranging a deal with a legitimate vehicle seller.
Once a deal has been made, the scammer claims to have arranged a bank transfer, plus transport of the vehicle through a courier service or delivery service.
The scammer will then backtrack and request the seller to cover the vehicle delivery costs, claiming they can reimburse them afterwards.
The seller pays the amount (normally to a third-party account) and the scammer then ceases all contact.
Odometer Wind-Back - Scammers or vendors who reduce the displayed mileage on the odometer of the vehicles they're selling.
The reasoning behind this is that vehicles with less mileage are worth more than ones with more mileage.
To trick would-be buyers, scammers will reduce the displayed mileage of a vehicle's odometer by winding them back to seem less used.
Make sure to check the wear and tear of the car, and ask for the service history for usage.
Vehicle Re-Birthing - Thieves will steal a car or use a written-off vehicle, strip it of all identifying information, and provide it with a “legitimate identity”.
This means that buyers will be scammed into buying a car that's stolen or buying a car that's a safety risk.
Make sure to always check that the car’s VIN number matches the registration document. Inspect the car at a privately owned residence and if you're still not sure, contact a professional to help.
Non-Disclosure of Finance Owed - The buyer purchases a vehicle that has an outstanding loan but the seller did not disclose this. As such, the buyer could lose the vehicle due to the outstanding loan.
Make sure you get the vehicle history report from a reputable source.
What are some red flags to look out for?
Thankfully for car buyers, there are several signs and red flags that immediately give away a used car scam:
Surprisingly low prices - If it’s too good to be true, it almost certainly is.
Make sure you compare the car to others online and arrange an in-person inspection.
Sellers who avoid phone calls - Scammers are generally hesitant to chat over the phone.
Call the listed number and make sure your own number is on private.
Interstate/Overseas sellers - Overseas consumer protection laws don’t always apply and scammers will take advantage of it.
Each state also has different laws around vehicle registrations so make sure you check these.
Sellers offer to transport the vehicle to you
Scammers will often request full payment for the vehicle transfer upfront. If this happens, contact the police immediately.
Strange email addresses - Scammers will send “spoof emails” from PayPal containing a link to the site.
Make sure you verify the address and ensure it is legitimate.
Meeting at someone’s home
This can be unsafe so arrange to meet in a neutral place and go with a friend or family member.
Don’t give out your home or work address.
Weird payment methods
Don’t ever send via a “wire transfer” including MoneyGram.
Cash, credit card or bank transfer are best.
A dodgy PPSR check
Ensure the vehicle is safe/reliable by doing a Personal Property Securities Register check.
An official government website used-car check tells you if the vehicle has been written off or stolen.
Text-message-only exchanges - Scammers pretend to be a potential buyer who is claiming to be highly interested.
The scammer will send an SMS asking that you reply via email, possibly from someone overseas.
They will most likely ask for the seller’s PayPal details and will share a fake receipt claiming to have transferred too much money and request a refund.
What else can I do to protect myself from these scams?
In addition to knowing what to keep an eye out for, it's important to stay vigilant whether you're a vehicle buyer or seller:
Don’t rush into deals that seem too good to be true.
Don’t trust the legitimacy just because it appears from a reputable source.
Do an internet search using the exact wording in the ad.
Be very wary of purchasing a vehicle you can't inspect.
Be very wary of transactions that involve an overpayment, and requests to refund the excess.
Do not send the item to the buyer until the payment has cleared into your bank account.
Keep track of your paperwork, including receipts and registration history.
Maintain a log of communication with the seller/buyer.
Have the car thoroughly looked over by a professional mechanic.
Conduct an extensive test drive.
If you have any questions or need extra support, we're here to help you anytime in any language. Simply start a chat with us via the home screen of the Sonder app.
Information sourced from: ABC, ACCC, CarHistory, Carsales, and MTANSW
Image credit: Top Gear
All content is created and published for informational purposes only. It is not intended to be a substitute for professional advice.