Here in the UK, car selling scams are always evolving with the times. Once consumers become educated on what to look out for, the creepers just find even more ways to draw you into a bum deal.
While reputable car dealers find lucrative legal ways to scam the public, it’s really the private used car sellers that one has to worry themselves most about. While businesses have a reputation and the law to worry about, private sellers can dupe you out of your money and be gone before you can dial 999.
Popular used car scams to avoid
These 5 used car scams are the types you’ll most likely find when surfing classified sites and social media, or when responding to classifieds in your local newspaper or used car magazines.
1. Deposit Scams
This age old scam has been around forever. They’re normally perpetrated by aggressive types who know how to apply just the right amount of pressure to engage their would-be buyers. They’ll always make out like the car’s as hot as a stove top burner, and the only way you can avoid it being sold right out from under you is to make a rather large deposit right away.
“I’ve got a buyer coming in less than an hour who says they’ll take it sight unseen,” and similar are what you’ll here. If you fall into this deposit trap, the seller disappears and are never seen again. Sometimes a rental car is used, other times the car might be theirs or a friend/family members. Other times, the car might even be stolen.
2. Rental Car Scams
Sounds easy enough to spot. Surely you’ll realise something is amiss when you see the registration, right? Yes, you most definitely would, but the rental scam doesn’t work that way.
The scamsters will go and rent a really desirable car that’s popular at the moment, then motor around town looking for as many eager buyers as they can, collecting deposits along the way with the promise they’ll sell you the car at a later date (using some sort of dodgy excuse as to why they can’t sell it to you right then and there).
After taking your “deposit” and other down payments from as many people they can, they simply return the rental where they got it and move on to the next scam.
3. Escrow Scams
The thieves pulling off escrow scams are quite the nefarious types. You’ll often never see them, as they prefer the anonymity of the World Wide Web to do their dirty deeds. A car will be offered up for sale on a classified site, via a forum related to specific cars, or just car sales in general.
After you’re put in contact with the seller, they’ll encourage you to set up a holding account (escrow) with them that contains the amount the car is being sold for. After the funds are transferred, you’ll never hear from them again and never see the car you were supposedly buying either.
4. Swap Scams
At one time, swap scams were something that people selling personal vehicles only experienced. However, several companies have been duped into this one as of late. The basics of the scam are that they encourage you to barter with them instead of doing a straight sale.
They’ll offer an item, usually a vehicle, of lesser or equal value to yours as a trade. After doing the deal and going to register the vehicle to your name, you find out that it wasn’t theirs to give and to make matters worse, your own vehicle is long gone.
Many car-nicking outfits will take your car and strip it down for parts or overseas shipment before you even realise you were scammed.
5. Sub Hiring Scam
This one can be an outright scam intended to separate you from your money, or a case of the best intentions going miserably wrong due to unforeseen circumstances in the seller’s life.
Selling a car privately when it has financing still left on it is illegal, unless the buyer agrees in writing to take over the seller’s payments. This requirement needs to be done at the dealer or financing company’s location, with their permission and after vetting the new financing candidate’s credit worthiness.
If you’re attempting to buy a car from someone who suggests they’ll keep up on the payments if you agree to buy it right now, turn around and walk away – they’re either ignorant of the laws, or trying to take your money.
Once money has changed hands, you’re completely at their mercy to keep making the payments on time. If they don’t, repo agents will find you quicker than you ever thought possible and you’ll walk out of work or the shopping center one day and your new car will be gone!
Takeaway
Buying a used company car is something that all burgeoning businesses have to do. It’s likely something you’ll do many times throughout the course of your entrepreneurial journey. That said, it doesn’t have to cripple you and turning you to an easier but more expensive alternative – e.g. buying a brand new car.
Just make sure you use common sense when considering a deal, and that you’re well informed on all the tried-and-true practical tips on buying used car safely before meeting with private sellers.