Common used car scams you should know about

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Common used car scams you should know about

Post by kingr » Mon Dec 24, 2018 2:10 pm

We can all be diddled out of some change on occasion without too much of an impact on our lives, but being scammed when buying a car is a much bigger issue. Cars cost a lot, and although it still seems uncanny to many motorists that thieves and crooks can try to scam people on such a weighty purchase, it unfortunately happens all the time. Have you ever been suckered into a scam that you knew you weren’t going to fall for at the end of it all? Did you notice how everything is kept verbal and, if you really had to go and make a case with the SAPS, you realised that hard evidence would be difficult to muster?

That’s the seasoned ability of those who run car scams. They’ll dance a merry jig with us that leads us to a single point where money exchanges hands. And, once you’ve forked out for a car in a private or dealership sale with a scammer, chances are very poor that you’ll be seeing your money again.

What is a car scam?
A used car scam usually involves a stolen used car, or a used car that is otherwise illegitimately offered for sale. It’s fraud, but fraud has to be proved in a court of law, and scammers know this. It’s easy to spot fraud when looking at the facts, but far harder to prove those facts before a judge, assuming you can even get scammers found and arrested after they’ve ripped you off. A car doesn’t have to be stolen to be a scam, as selling someone a lemon is fraudulent too, although often impossible to prove when all discussion around the used car was verbal. A used car scam is any situation where one party knows that the other party is buying a used car under false pretenses.

Things that can point to a used car scam
Be extra vigilant when you encounter the following:
  • By educating yourself on current market values with our vehicle value tool, you’re already armed. If a used car is advertised at a really surprisingly low price, look out.
  • Any mention of a deposit before you take possession of a used car should alert you to the fact that you’re being ripped off somehow. A dealership might even be real and waiting for you to collect after you deposited a “holding fee” or some such, but there are certain to be issues with the used car in question. Trying to get your deposit back will be a modestly unsuccessful nightmare.
  • Communication is limited, and the seller has a reason for not being available by phone. If a seller’s phone continuously goes to voicemail after a few days, whether you get alternative communication via mail or sms in that time or not, it’s not a good sign. If a car is presented without public, open and transparent contact details and behaviour, there’s usually something fishy.
  • Are you hearing funny stories about why she’s selling her husband’s used car or he’s selling it for a friend who’s overseas? Any absent parties complicate things, and could indicate people trying to limit their own liability in a scam ring.
The list of used car scams is a long one
Google really is your friend. As AI gets better and better, checking up on a private seller with Google and the advertising platform itself should be mandatory, as is a good investigation of any dealership, including looking at any complain forums the search returns. This should be standard preliminary homework before applying vigilance when actually inspecting the car.

Many dealership and private seller scams are subtle, and more false, obnoxious advertising than outright theft. That said, any time you’re being suckered into the funnel, however gentle the breeze blowing you towards it, you’re being scammed. Here are some of the most frequent used car scams, some soft and some outrageous, and how to avoid them!

#1 Paying a deposit
In short, don’t do it. Never do it. The standard conversation around a used car for sale is “Hi, I’m interested in your car,” followed by “Ok great, come over.” People who suggest a deposit or imply that it’s an industry norm are lying.

What to do? You should never pay a deposit on a used car that “interests” you. The only time you pay is just before you drive the car away. There are no “deposits” with used car trades, only a deposit on a new car when dealing with the bank and dealership in financing it. People asking for a used car deposit before or after you view it are either misinformed halfwits, or scammers.

#2 Payment with diamonds or gold
When you’re the seller, scammers will often dazzle you with the offer of rough diamonds or gold for your used car. It’s illegal - unless the diamonds are cut and store-bought, and the gold is in the form of Krugerrands - but the real issue is that none of us are geared towards trade in precious goods. Guaranteed the “diamonds” will be fake, and the gold will likely be gold dust from Zimbabwe or Johannesburg, diluted and underslung, sold illegally throughout South Africa. Scammers typically offer an overpayment in precious metal or stones, trying to dazzle you into thinking you’re getting a big score. You’re not. You’re getting ripped off.

What to do? Tell prospective buyers it’s strictly cash or EFT. Buyers can go and trade their goods and bring you cash, or forget. The end. People offering gold or off-track precious gems as payment are already flying below the radar. You can be dead sure that screwing some citizen out of their used car is the last thing likely to worry them. Don't risk becoming that citizen.

#3 The car is not available for viewing in real time
Much like no one pays a deposit to “secure” a used car, you should never pay out money for any car you’ve yet to see in the flesh, so to speak. Remember that scammers can build an entire “history” with photos and anecdotes on paper, encouraging you to snap up this hot baby before it gets away. The car very likely doesn’t even exist! If a used car seller cannot make the car available for viewing but is still acting as though the deal should go through, you’re being scammed. Regular traders might shop remotely and among themselves for cars they only see when it comes to the yard, but when P2P Citizen A wants to sell a used car to Citizen B without physical inspection, Citizen A is a tsotsi.

What to do? Chalk the experience up to South African entertainment, and move on. Never take a used car seriously until you’ve touched it and inspected it top to bottom. Don't be made to feel like you're tech-illiterate or that "everyone does it this way nowadays" or any other bulldust. You get to see the correct, clean and present used car with its papers, or it's not a car deal.

#4 Sending you false information
You can be given fake photos, fake plates, cribbed copy from other car adverts, fake videos and even a fake Natis certificate, but if you can’t inspect the car in person, chuckle and walk away. And even if you’re standing looking at a used car, you need to go through every snippet of paperwork and do the mandatory inspection needed on a used car, before handing over your money.

What to do? Take a lawyer's approach and treat all intel as false until proven otherwise. If there’s a single discrepancy that can point to falsification - even one - walk away if the seller can't legitimately address it to your and the law's satisfaction. If papers seem false, say so, and offer to go together to the nearest cop shop to verify them.

#5 Strings of lies abound
The South African motoring arena is a lively one, so when you encounter one or several small lies about a used car you’re eyeing, don’t swallow it. This is the last one available in the Western Cape, another couple were here this morning and are keen to take it if you don’t - little lies that smooth over the salesman’s life while encumbering yours abound in used car sales jargon. “Just needs a wash!” or “Just needs new tyres and all good!” are also adverts to avoid.

What to do? Take your time, and don’t compromise. Habitual used car salesmen often trade on an insulting purchase offer and subsequent as-much-as-possible markup. They have fat in the sale price. If there are bodywork or mechanical issues with the used car you fancy, a good dealership will affect minor repairs at no charge to you. Never, ever buy a used car that is already making you feel unhappy when viewing it.

#6 Dealerships pose as private sellers
This might not involve you getting ripped off, but when it’s time to finalise the paperwork, a third party becomes involved, a “friend not far who can sort the paperwork”. This is usually effected on dealership premises after you've met in a car park somewhere.

What to do ? f all else is legitimate, it might simply mean that a dealership is trying the sales tactic on to boost sales. It doesn’t bode well for full disclosure though, and in a worst case scenario, there are some legal complications around the car or it’s simply a lemon they can’t seem to move any other way. Walk away if you are not absolutely satisfied that every detail on the car - as well as it’s supposed performance - is legit. Definitely get a car valuation before talking shop in a situation like this.

#7 Fire and flood damage
This can be easy to mask yet hard to truly repair. Wrecked cars that carry the wrecked code too, are sometimes slipped in as “normal” used cars.

What to do? Be super aware of “damp smells” from the interior, as well as signs of fire or muddy or rusty residue on the undercarriage. Ask blatantly whether the car is a Code 3 (a rebuild) or a Code 4, a car that’s no longer a car, but (officially) completely demolished. Used cars like this cannot legally be sold as "normal" used cars anymore, but are “breakers” to be stripped for spares. Employ a bit of imagination when inspecting a used car, and look for burn or water damage everywhere. If a used car lists the __wrong code__ on its Natis, walk away.

#8 Trade-in scams
These can happen often when we’re not vigilant. You might push for and obtain the price you wanted for your trade-in used car, but the dealership inflates the sale price on the car they’re selling you to offset their loss. If you saw a certain car advertised and it’s gone when you get there but they “have others”, that’s also a possible sign of crooked advertising that lures clients. Called the bait and switch con, some dealerships will tell you the amazing car that pulled you in there in the first place has “been sold,” after which they’ll try to upsell you on something else.

What to do? Insist on the advertised price on the car you saw that led you to them in the first place. Also, ensure you walk around and do your homework on the cars available there before even letting on that you’re looking at trading your car with them.

#9 Asset fraud
There is a very serious type of used car scam called asset fraud. This happens when a seller “sells” you a used car that is still under finance and thus owned by the bank. You’re going to get the short end of things when the bank claims their property, and they’re not above laying charges if you contest things either.

What to do? The thing that will save you is the Natis certificate, if all else fails. The financer remains in possession of the Natis certificate with any car under finance, and the seller will either falsify the paperwork or imply that the Natis isn’t necessary. You can “go in and pick it up from them” anytime, right? Wrong. No Natis, no deal, no sale, the end. They're trying to scam you.

#10 High- and low-balling
This can happen in a few ways. On the phone, a dealership offers you a great price for your car, only to hammer you when you arrive in the hope that you’ll be sufficiently doubtful of its value and defeated enough to let your car go for a low trade-in value. That’s high-balling you to get you on to the shop floor. Low-balling happens when a dealership offers you a ridiculously low trade-in value on your used car. Without a car valuation, you won’t have a realistic figure to aid you, and the dealership is, firstly, seeing whether you’re enough of a sucker to just take it. Secondly, having deflated your ego and crushed your spirit, now you’re negotiating up from a silly figure, making you feel like you’re winning when it goes up a little, whereas it’s simply a massive score for the dealership.

What to do? Get a car valuation! Always. Before talking shop on used cars. If you're the seller, don’t take the first offer, but shop around when you’re ready to sell your car. As a buyer, when you know prices are out of whack, don’t bother showing up or, if you’ve gone in and are met with this scammy approach, walk away.

#11 Paperwork discrepancies
Sneaky or poor paperwork almost never results in the dealership losing, funnily enough. “Mistakes” in contracts shouldn’t be there, which is why we so strongly advocate making an unhurried journey of car shopping. Terms you never looked at or that have been omitted can cost you a lot. Incorrect VIN numbers or licence plates recorded in paperwork can carry huge implications.

What to do? Be fastidious about paperwork, and take your time looking at every line item. Acquaint yourself with what to look out for and what to expect in terms of paperwork, especially if it’s your first time buying a used car.

#12 Swap scams
These involve a prospective buyer offering a trade in lieu of money for the used car you’re selling. This can be a legitimate, socially affable arrangement, but bartering also attracts scammers who will often falsify paperwork and “swap” a stolen or even rental car with you for your vehicle.

What to do? Investigate swap offers that might appeal to you extremely carefully, and follow the same diligent investigation when evaluating the offered used car as you would with any other. Definitely get a VIN number check report too. As long as all is legit, swap deals can turn out to be pleasing for both parties, but be aware that the arena attracts crooks more than other routes to sale.

#13 “Clocking” or odometer fraud
This happens when the seller turns back the odometer reading, showing a false, lower mileage than is true for the car. A lower mileage can command a higher price, and this practice of “tweaking” the odometer is rife in the used car sector that involves private cars that lack a detailed service history.

What to do? Get a vehicle history check and look at the maintenance records of the car in question to see if readings tally. If a car has been “off the radar” and our vehicle, do the maths and determine whether the car’s history appears to tally with its mileage. You’ll have to decide for yourself if things seem to fit. Mostly, a quick check will reveal discrepancies between age, mileage and given history that point to scam clocking.

#14 Fake cops
If your car was stolen or impounded, “policemen” calling and pretending to have recovered your stolen car - which they can release and deliver for a fee - are just that: fake cops.

What to do? If your car has been stolen, and should the police recover it, there is no fee applicable for release from the pound. You’ll have to go in and collect it, that’s all, or arrange for a private towing company to collect and deliver it, once you've shown up and identified yourself. Never entertain “costs” from the police in matters of vehicle recovery. Report the incident to the SAPS, with as much detail as possible, including the bank account number the “officer” gave you.

#15 “Cloning” or copycat scams
Cloning is when an illegitimate car (stolen or built from Lego blocks) is offered as a used car for sale, on the back of a written-off wreck. Since the wreck has been scrapped, but the sale car closely resembles it, scammers will often slip on the wreck’s plates and try to pass something else off as the car you think you’re looking at.

What to do? If you’re at the stage of considering buying, arm yourself with our vehicle history check tool. Be meticulous about the paperwork. There is zero room for missing paperwork or “paperwork later” in a used car transaction. Absolutely zero. If there are obvious or subtle errors across the paperwork, walk right away.

Avoiding used car buyer scams
  • Starting with the obvious, never allow any prospective buyer to test drive your sale car alone. You or your duly appointed representative should always accompany anyone test driving your car.
  • By the same token, ask to see the person’s valid driver’s licence before test drives. If they’re behind the wheel and have an accident without a driver's licence, the fallout is all yours if your insurer denies your claim
  • Cheques are dead - never accept a cheque payment for a used car. If there’s no alternative, the buyer will have to wait seven days for the funds to clear legitimately before taking the car if they have to pay with a cheque.
  • When showing the car, try to keep the keys in your pocket at all times possible. Criminals will sometimes do a key swap or strip the code for a remote when left unattended, only to return at some point to make off with your car.
  • When paid by EFT, log into your bank account and transfer some funds between accounts or make a successful payment to confirm the deposit legitimacy. If a buyer is paying you with a lump of cash, it’s a good plan to meet at the bank, where you can verify the currency as legitimate and bank it securely.
  • Be a paperwork freak! If there is anything amiss with details or transactions when selling your used car, stop right there and iron it out before proceeding to handover.
Avoiding used car seller scams
  • The single biggest point to remember when buying a used car: never hand over the money without immaculate paperwork! Never pay for a car you haven’t seen, and don’t pay anything if there are missing bits of paperwork in the deal. The seller will have to sort it out or forfeit the sale.
  • Trust our car valuation check and ourvehicle history check tools to arm you with the right intel, and glean the benefits of a report that gives you a baseline identity of the used car to work with. The VIN number needs to match the car you’re looking at and, again, paperwork needs to be immaculate, complete and correct.
  • Be wary of mail communication only - scammers love to keep a distance. You’ll want to meet the seller in person, with the car. If that’s problematic, warning bells should start ringing.
  • As an aside, you might want to confirm that the seller’s personal details (like their physical address) are the same on the registration and roadworthy documents, just like the VIN number needs to be consistent, and make a note of those details yourself.
You can avoid used car scams
When dealing with selling or buying a used car, just remember that not everyone is a good guy. Be vigilant when you feel that some request or behaviour is illogical, and feel free to speak frankly with everyone. Scammers will cotton onto the fact that you’re awake very quickly, and typically avoid you. Be on the lookout for the small manipulations dealerships and even private sellers can employ, and take your time going through all of the details. Any panicked rush from a buyer or seller is probably masking a scam. No one should ask you for indecent haste when a lot of money is involved.

Even if paperwork seems like a waste of time, get yours right and make sure incoming paperwork is as legitimate and complete as it needs to be. Remember, when the money's gone and you’re sitting with a lemon or, worse, an illegal vehicle, it’s too late to fix. Be a stickler for clean paperwork and look at our intel on buying and selling a car in South Africa, so that you’re already ahead of the pack.
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