Buying or selling a car should be a straightforward business, right? You just go to your local car showroom and pick a car that suits you best, pay your money, and then leave. Similarly, selling a car is easy too – just place an advert in your local newspaper and then wait for someone to come and see it. Unfortunately, these transactions in the car industry aren’t always that easy. There is always someone out to make a bit of extra cash from you, though, and these days you need to be careful that you don’t get scammed.
Unfortunately, these days it is a lot easier for scammers to get our money as they are now able to carry out very sophisticated scams with the help of the Internet. Not only that, though, but they are getting a lot braver and more brazen, and, as a result, a lot more scammers now have the guts to carry out face to face scams.
As you can see, there are quite a few things that you need to be wary of when you try and buy or sell a car. But to make sure you don’t have to grind your gears over an auto scam, we’ve investigated some of the most popular ones. Read on to find out how to spot them and what you can do about them!
Online Escrow Frauds
Escrow frauds have been around for a few years already, and they aren’t just restricted to the car industry. In fact, they are becoming a lot more popular now as the Internet makes them extremely easy to carry out. When it comes to the car industry, the scam often takes the form of a car being sold from abroad. Once you contact the seller, they will say that the car won’t be shipped over to you until your cash is placed in a secure third-party bank account. This is known as an escrow account. The cars are often priced very low, and it can seem too good to be true – and that’s because it is! But the scammers normally concoct a very detailed back story to explain why they need to sell it so cheaply. Once the buyer wires the money over, they never hear from the seller again. There are some simple ways to make sure that you don’t fall for this type of scam. Firstly, don’t ever wire money for a car that is abroad. Secondly, it’s a good idea to only ever buy a car that you are able to see before you commit to the purchase.
If you see an advert for a car that still has outstanding finance on it, then you could be staring an asset scam right in the face. The outstanding finance will be part of the loan or other form of funding that the current owner took out to buy the car. In theory, they still owe money on the car and, legally speaking, it isn’t theirs to sell. The company or organisation who they got the loan off won’t release the car to sell once they have completely paid off their original debt. And, technically speaking, they won’t be able to use the cash from the sale of the car to pay back the money they owe. Some people who buy cars that still have financing on them think that this isn’t a problem for them. As the current owner owes the money, then they are the ones who will have to deal with the consequences. But that isn’t the case, and the purchaser can also be charged with fraud. So, if you see an advert for a car that still has some financing on it, be sure to stay well away!
A Faulty Car Fraud
This is probably one of the oldest cars in the book. But it shows why it’s so important to take that Subaru you’ve just bought to your local Subaru service garage or that fancy new Jag out for a test drive before you take it home. There is still a surprisingly high number of car dealers that are still selling broken or faulty vehicles to unsuspecting customers. Most of the time, you can’t return the car to the seller or they won’t offer to help you as many employ an “all sales are final” clause in their sales contract. So, it is completely up to you to pay for all the repairs to make the car useable again or to just improve it, so it is in a saleable state again!
The Deposit Fraud
If you ever come across a seller who tries to pressurize you into handing over a sizeable deposit, they are probably trying to scam you. They will try to get you to hand over the money by telling you things like they have a definite buyer coming soon to take the car, and they need your deposit to save the auto for you. They might also tell you that the car has been advertised very cheaply so that it can be quickly sold. If you do cave into their demands and hand them their deposit, you probably won’t ever see them again! They will have moved towns and will be trying the scam out on some other unwitting suspect! So, if you come across a seller who is demanding fast payment of a very high deposit, you should be very wary. In fact, it may be safer to take your business elsewhere.
The Rental Car Scam
The rental car scam has only been used over the past couple of years, but it seems to be getting increasingly popular. It involves the scammer renting out a car from a legitimate hire company. They then photograph the car and create an advert for it. As the car is not visibly a hire car, people think that it is a genuine advert. The potential buyers also won’t find anything wrong with the car when they see it in the flesh. The scammer will let a lot of people come and view the car, and take deposits of anyone who offers to buy it. Of course, all these different so-called buyers aren’t aware of each other. Once the scammer has received enough money, he then simply returns the hire car to the company and then disappears. And there is nothing that those who were scammed can do about it!
The Swapping Cars Scam
The Swapping Car Scam is one that frequently targets people selling their autos. The scammer will look through car adverts and contact someone who is selling a very desirable vehicle. They then get in touch and suggest that rather buying the car outright, they swap cars. In order to get the seller’s attention, the scammer will say that they want to swap another very desirable vehicle in return. Usually, the car being offered is worth slightly more than the one that the seller is offering. As this seems like a remarkably good deal, most sellers accept the swap. But what the seller doesn’t know is that the car that they are receiving isn’t all that it seems. More often than not, the scammer gives them a car that still has some financing left on it. In even worse cases, the scammer hands over a stolen vehicle. If you are caught up in one of these scams, you might be in big trouble. Most of the time, the scammers are able to completely disappear so if you get found with a stolen car, you won’t be able to blame the situation on anyone else!
Buying The Gas Scam
It’s not only some car sellers and buyers that have a few scamming tricks up their sleeve. Some car rental companies aren’t exactly innocent either! One of the most common scams that rental companies try and trick their customers with is persuading them to buy the gas when they hire a car. For example, the salesman will give you the chance to take a car with a full tank of gas – it’ll cost you extra though! Alternatively, the salesman might ask you to return the car with a full tank of gas. These are just tactics for making the company some extra money. That’s because the company will just resell this gas to the next customer who takes the car for a spin. In effect, the company can sell that gas twice, making them twice the profits! So, if a company ever offers to sell you any gas with a hire car, tell them you would rather source it yourself!
As you can see, there are many different car scams out there that are waiting to catch you out. The best way to stay safe and keep a hold on your money is to make sure that you always use your common sense. Does something sound a bit too good to be true? If so, then it probably is! If you keep your wits about you, you should be able to miss the scams completely.