Beware of Used Car Scams
We can all be diddled out of some change on occasion without a substantial impact on our lives but being scammed when purchasing a vehicle is a much bigger issue. Cars cost a lot, and unfortunately, car scams abound.
A used car scam usually involves a stolen used car, or a car that is otherwise illegitimately offered for sale. It is fraud, but fraud must be proved in a court of law, and scammers know this. It is 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 have ripped you off. A car does not 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 essentially any situation where one party knows that the other party is buying a used car under false pretences.
Things that can point to a used car scam
Before we go any further, be extra vigilant when you encounter the following:
1. A price too good to be true- Before considering any car, educate yourself on the current market value. If a car is offered at a surprisingly low price, this is an immediate red flag, and is usually the “bait” to many of the known scams listed below.
2. Asking for a deposit - If you haven’t even viewed the vehicle and the seller is asking for a deposit, or holding fee, or transport fees (because the car is in another province), you can bet your last dollar that the car doesn’t exist and you are being scammed.
3. 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 is not a good sign. If a car is presented without public, open and transparent contact details and behaviour, there is usually something fishy.
4. Selling on behalf of someone - Are you hearing funny stories about why she is selling her husband’s used car, or he is selling it for a friend who is overseas? Any absent parties’ complicate things and could indicate people trying to limit their own liability in a scam ring.
5. Missing Documentation - While it is understandable that you can lose your registration documents for your car, it is relatively cheap to have duplicated printed. So, beware of ads where the seller advertises that there are 'no papers for the car' or the 'papers are with the previous owner'.
6. Foreign Registered Car – As will be discussed later, there is no way a foreign registered car can be legally registered in South Africa.
7. Areas of Sale - Without any discrimination, there are some areas you should not go to buy a car because it would certainly place you at risk – even more so if you plan on carrying cash with you. Most genuine sellers will agree to meet in a public or neutral venue to conduct the sale.
The list of used car scams is a long one
Unfortunately, scams are constantly evolving, and criminals are forever finding new and more innovative ways to get you to part with your hard-earned cash. Listed below are some of the more scams which have been reported on platforms like Hello Peter.
To keep thing’s simpler, lets try break the scams down into “private sellers” and so-called “dealerships”, although bear in mind there is considerable overlap as dealerships often pose as private sellers, and private sellers claim they “buy and sell” and are unofficial dealers.
Buying from a private seller
There are many scams out there, with some exciting variations, but these are the main ones and their objectives:
1. Trying to sell a non-existent vehicle - Most often, these scams start as online adverts on the popular free advertising websites. The price is almost always to good to be true. Almost always, the photos are fake and have been cribbed from other car adverts, and the vehicle does not exist. These scams usually end in you paying a deposit to “secure” the vehicle, or “transport fees” because the vehicle is in another province. A scarier scenario of this scam is to lure you to the seller’s address to view the vehicle, and you are hijacked or robbed nearby.
2. Selling an illegitimate vehicle - Whether it is a stolen vehicle, a vehicle which is still under finance, or an illegitimately imported vehicle – you stand to lose your vehicle when this is discovered. While stolen and financed vehicles can be verified before buying, it is far harder to notice an illegal import. Approximately 20,000 vehicles are illegally registered and sold in South Africa each year. The vehicles, mainly from Japan and China, are shipped to local ports with the stated intention for further shipment to neighbouring countries. A portion of these vehicles destined for sub-Saharan Africa are taken by criminals and brought back into South Africa, where they are then taken by criminals and fraudulently registered on the eNatis system – and sold to buyers unaware of the vehicle’s illegal status.
When discovered, the illegal vehicles are handed over the revenue service, and are then destroyed. No matter how long you keep an illegal vehicle in your possession it never becomes legal .
Also bear in mind that even an explicitly stated foreign registered vehicle can not be legally registered in South Africa to a South African citizen. Never buy a vehicle advertised or displayed with foreign number plates. Never buy a vehicle that is registered in a foreign country – even our neighbouring countries. The probability of you being allowed to import the vehicle is very low.
Dealership scams are usually more subtle, and more false, obnoxious advertising and misrepresentation than outright theft. In these cases, the car usually exists, you can go see it and feel it - but it is not all they make it out to be.
1. The Bait and Switch Tactic – 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. A variation of this scheme is where the vehicle has not been sold, but a casual mistake slipped into the listing price, or mileage or vehicle engine size which made a very mediocre deal seem like winning the lottery etc.
2. High-balling – There are a few variations on this tactic. High-balling is when 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.
3. Low-balling - happens when a dealership offers you a ridiculously low trade-in value on your used car. Without a car valuation, you will not have a realistic figure to aid you, and the dealership is, firstly, seeing whether you are naïve enough 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.
4. Falsified Service History – A complete service history is usually a critical selling point for wary buyers. It provides a certain level of confidence that the car was not mechanically neglected and a ticking time bomb of unforeseen repairs. Unscrupulous dealers have been known to falsely stamp books or fill in the missing services. If the services were purportedly done at the agent, take down the vehicle’s VIN and phone and confirm that the services correlate with the book. If they were done at independent workshops, try researching if these “workshops” exist, and again, check that the car was serviced there.
5. “Clocking” or odometer fraud - This happens when the seller turns back the odometer reading, showing a false, lower mileage than is true for the used car you are considering buying. 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. Detecting odometer fraud on modern vehicles with a digital odometer is more difficult but a few simple checks can assist you in detecting a potential rollback. Look for signs of abnormal wear in the accelerator and brake pedal rubbers, as well as the carpet (under the pedals) and seats. Have a mechanic inspect the car as certain parts have a lifespan and give a good indication of the vehicle’s real mileage. Also check that the mileage makes sense according to the car’s age, the owner’s lifestyle and the vehicle’s previous record of usage (why did the vehicle go from covering 15 000kms in its first three years to 2000km the next year?). Have a look on Hello Peter about a person who sold his car to a well-known used car chain, and then went on their website to see what price they were selling it for. Imagine his surprise when he saw his vehicle now had 160 000kms less on the odometer than a week ago!
6. Paperwork discrepancies - Sneaky or poor paperwork almost never results in the dealership losing, funnily enough. “Mistakes” in contracts should not 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.
7. Dealerships pose as private sellers - This might not involve you getting ripped off, but when it is time to finalise the paperwork, a third party becomes involved, a “friend not far who can sort the paperwork.” If all else is legitimate, it might simply mean that a dealership is trying the sales tactic on to boost sales. It does not bode well for full disclosure though, and in a worst-case scenario, there might be some legal complications around the car, or it is simply a lemon they cannot seem to move any other way.
8. Accident Damaged Rebuilds - There are dealerships who run a business model of fobbing off rebuilds done up to look new, but almost always offered at noticeably less than market value, for a quick sale. The problem is these dealerships are not breaker dealers (dealerships who openly trade in damaged cars), but rather those who pose as only dealing in the best while slipping through rebuilds all the time, without you knowing you're buying a used car that was previously smashed.
9. Flood or Fire 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. 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 is no longer a car, but (officially) demolished. Used cars like this cannot legally be sold as "normal" used cars anymore but are “breakers” to be stripped for spares. If a used car lists the wrong code on its Natis, walk away.
10. Insufficient Opportunity to Test Drive – This one is an industry-standard gem! You go to a dealership and want to test drive the vehicle. You get in the car and the petrol light is on, so the salesman asks you not to drive it more than a block or two. This is a deliberate tactic to cover up mechanicals problems which only rear their head after a few minutes or at high speed. I know someone who bought a car with an overheating engine as a result of this. If the salesman spins you this story, drive to the nearest forecourt, offer to put in a few litres on your own account and test drive the car to your satisfaction.
When dealing with selling or buying a used car, just remember that not everyone is a good guy. In fact, take the pessimistic view that most people are trying to con you. Be extremely vigilant when you feel that some request or behaviour is illogical, and feel free to speak frankly with everyone.
Scammers will very quickly cotton onto the fact that you are awake and aware and will typically avoid you. Always be on the lookout for the small manipulations dealerships and even private sellers can employ, and take your time going through all the details. Always ensure the incoming paperwork is as legitimate and complete as it needs to be. 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.