Dealer Fraud

You might have heard that repossessed used cars are sold at huge discounts compared to their market price. While this is not too far from being true, this knowledge won’t be much helpful if you do not know where to locate these sales and how to really get the best deal and make sure you do not fall a victim to various car dealer scams.

Generally, repossessed used car sources include repossessions by banks as well as police impounds and third party agents who are engaged with repossessing and storing these vehicles. Then these companies will organize auctions and sales to sell the vehicles as soon as they can in order to minimize cost. Hence, you need to know how to find these sales first.

The repossessed used cars business is a very profitable market for car dealer tricks that’s why many of these sales are not made known to the public. They are mostly attended by second hand car dealers who will obtain the cars at cheap prices and later re-sell them at a price that people pay in the open market for used vehicle. In order to maximize the profit margin, some car dealers will service some of the vehicle before selling them.

The easiest and fastest way to locate these sales and auctions is from the internet. There are online databases which are dedicated to providing updated and accurate information relating to repossessed used cars sales. By using them, you can locate the sales nearest to you. Sometimes, you might even be able to see the models available. The database includes listing of cars, trucks, SUVs and so on.

As with buying any second hand vehicle, before you buy repossessed used cars, it is always prudent to check the condition of the vehicle. Apart from getting help from a qualified mechanic, you can also request for vehicle history report and find out if it has been through any accidents. Make sure you read the fine prints before signing the deal to have a clear idea of any hidden costs, lapsed warranty or additional information that may not be clearly spelled out. Use the online services to get the latest information and read forums to get advice from people who have done so before.

A salvage vehicle is any motor vehicle which has been wrecked, destroyed or damaged to the extent that it is declared a total loss by the insurance company or, in the event an insurance company is not involved in the settlement of the claim, sustains damage in an amount exceeding 75% of its actual retail cash value. There are some steps you may take to protect yourself from buying salvaged vehicles that have extensive water damage.

Many people may not realize they have bought a flooded car until they take it to an insurance company. They then find out that their agent cannot even issue them an insurance rate quote because of the salvage title on the vehicle. Since used cars are usually sold “as is” there is very little recourse the buyer has at this point other than to try and get the vehicle road-worthy and go through a long inspection process with the state motor vehicle bureau that is required for a vehicle with a salvage title.

One of the easiest ways to protect you from buying such a car is to obtain a vehicle history report from a firm like CARFAX which tracks flooded vehicles and other types of damage. You may also do some detective work yourself on the vehicle if you have any doubts. Look inside the engine compartment and look for any water mark signs that might indicate high water levels. Next, look under carpeting to see if there is mold or any presence of water staining. Finally, inspect the electrical system thoroughly. This is where most water problems show up first.

So to protect yourself from purchasing a flooded vehicle you should be a diligent consumer. If case you have already been defrauded by car dealers, try to find an experienced dealer fraud attorney for help and advice.

Buying a used car is always the best option for customers who can’t afford a new car. Used car dealerships are the most convenient places for finding used cars at a discounted and moderate price. The pre-owned cars are usually sold through independent dealers, franchises, rental car companies, auctions, private sales and leasing companies.

Buying used cars is most popular in California. The comparatively low price and the opportunity to save a rather big amount of money attacks a lot of car buyers. However, buying a used car may sometimes be complicated. Used cars may have hidden mechanical problems, in some cases they may have been previously wrecked and rebuilt.

Very often car dealers sell you these cars without disclosing the problems and the history of the vehicle. These are typical cases of car fraud. That’s why you should always get a vehicle history report of the vehicle you consider buying. Vehicle history reports are very easy to get. They protect you against purchasing used cars with costly hidden problems. The reports contain any information about accidents or major repairs, any lemon law buybacks, odometer fraud and other relevant data on the vehicle.

In some cases buying a used car makes more sense than buying a new car, especially for those consumers who are trying to save money or invest it on something else. This allows you to get a new car and trade in the old one.

In one of our previous blogs (Beware of Water Damaged Used Cars (1)) we have already given you some tips that indicate water damaged cars. In this blog we will give you 6 more valuable tips to avoid becoming a dealer fraud victim.

• Look for dark lines on fabrics. Water lines or marks are created at the “high water points” on fabrics. A continuous line is visible along the length of any fabric (seats, rugs, headliner, etc.) that has been exposed to water and air at the same time.

• Look for rust. Rust will form on any steel surface that is unpainted and exposed to water. Since the inside of the trunk should never be exposed to water - rust found there is a sign that is was. Likewise, any rust that is found anywhere inside the cabin means water got in there, too.

• Look for new parts. Pay particular attention to the dashboard instrumentation. If the odometer indicates an incredibly low value for the year of the vehicle - it could indicate that the instrument cluster or entire dashboard was replaced due to water damage.

• Obtain a vehicle history report. The dealer or manufacturer may have some or all of this information available for free. Carfax is a service provider maintaining a database of many types of repairs and damages to vehicles, for a modest fee. Simply obtain the VIN (it should be well visible through the windshield on the driver’s side dashboard) for look up in the database.

• Shop at a reputable dealer. Reputable dealers avoid the headaches of selling vehicles that have questionable history. Dealers rely on their good reputation to stay in business. “Disappointed customer” stories spread much faster than “happy customer” stories do, so most dealers do what they can to minimize this risk.

• Note musty odors. Musty smells are indications of moisture. It is not unusual for older cars to have some mustiness - but beware. Water may have gotten into a vehicle if a window was left down or was broken. Rotted sheet metal around the rear wheels or rear window can cause a musty smelling trunk.

Title Washing is the process of altering a vehicle’s title for concealing information that would normally be included. This may be done by either actually altering printed documents or reapplying for a title without disclosing its prior history.

To avoid the title washing scam you need to inspect very closely any area of the car for signs of rust and corrosion. Look in the trunk where the spare tire goes. Look under the hood to see if any of the wires or connections contains signs of corrosion.

You may also sight down the car and look for any evidence of panels not quite matching up or new paint, etc. Be especially suspicious of new or newer cars with almost no miles that are being sold at a very cheap price.

Remember to look for any indication of mold, whether visually or by smell. You may have to pull up some carpet somewhere like in the trunk area. Also check to make sure the V.I.N. (Vehicle Identification Number) on the paperwork matches the V.I.N. on the vehicle.

A vehicle history report might be a good idea because a vehicle history report should show the vehicles entire history.

Finally if you don’t yet feel comfortable about inspecting a used car, and especially if you are buying a more expensive car, then it might be a good idea to take someone with you that can do it for you.

To report title washing fraud, contact your auto insurance company, local law enforcement agency or the National Insurance Crime Bureau or find an experienced dealer fraud attorney to defend your rights.

Title washing is used by car dealers for “washing” the vehicle’s bad history in order to conceal from the buyer that it had a salvage title because of severe accident, flood or other damage. Title washing incidents reached their outbreak after hurricane Katrina when many car dealers got stuck with excess of flood-damaged vehicles.  Title washing is also applied to “clipped” vehicles with the back and front coming from different cars, or rather of what was left of them after a crash. So, a wreck is sold at the price of a good car.

Title washing scam results from the lack of a unified law regulating vehicle documentation in all the USA states. Many people who bought used cars are already car title washing scam victims.

So how is title washing done? A car that was totaled by the insurance company is assigned a salvage title, which is often called “branding”. Then it may be repaired and driven, but its resale value lowers, along with the possibility to sell it. As a result, the car is transferred to states that do not recognize the current title and is assigned a new, clean tile. Title washing erases the branding and the car’s value rises, and now it is easier to sell. Remember that title washed vehicles can be sold not only by car dealers but by individuals as well.

To avoid title washing perform VIN number check and get vehicle history report for revealing the truth about the car’s title. Once a car is assigned a salvage title, the information is added to the computer database of services providing vehicle history reports. These records remain in the there even when the car is transferred to other states.VIN number check protects not only from title washing but also from many other used car flaws, for example salvage title, odometer rollback or a flood damaged car.

A curbstoner is a person who poses as a private seller, but who buys and sells vehicles at volumes that require a dealer license. Perhaps there is a street or parking lot near your residence where there are several cars up for sale. Many of these cars are placed in public view by “curbstoners.” This name originated and came into use since curbstoners mostly park the cars along the curb. The majority of curbstoned vehicles are most likely lemons or junk cars that car dealers could not sell on their lots to make a decent profit.

To avoid dealer tricks, try to follow the bellow mentioned tips.

• Have the car inspected by a mechanic that you trust. A good car mechanic is like a house inspector. He can spot problems with the product that others would normally not detect.

• Check that the name on the driver license of the seller is consistent with that of the title of the car. If you are purchasing a car on the internet, ask that the dealer to provide clear scanned images of both documents. If the names do not match, do not buy the car!

• Avoid buying cars on the internet. It is better to test drive the car in person before you make the decision to buy instead of reading up on the seller’s good points about the car. If you do make the decision to buy a car online, try to pick it up on person and request the seller to allow you to nullify the deal if you are dissatisfied with the car’s condition when you see it in actuality.

• Use vehicle history reports. There are services all over the web that allows you to run a vehicle history report. These reports will identify any vehicles that have been in major accidents or salvaged, etc. They will also show title transfers. If you see that the number of title transfers exceeds 2, then avoid this car.

• Buy a car from a reputable car dealer. Identifying a reputable car dealer can be bothersome, but it is really necessary. Dealers who have been in business for quite some time and have certified used car programs are a good bet. They are a much better chose crooked sellers whom you will not be able to contact in case the deal goes bad.

One mistake that car buyers make is buying a used car without knowing a used car history they purchase.

It is also important to provide a vehicle history report when you sell a vehicle. This will make the sale of your used car quicker and smoother.

When you buy a used car get a history report. It will reveal the information about a used car you’re interested in. The vehicle history report may include the following:

Flood History - Flood damaged cars are often moved to other states and sold to unsuspecting buyers.

Rebuilt cars – This means that the vehicle sustained damage and was rebuilt or reconstructed.

Odometer information – Each year odometer rollback fraud costs car buyers thousands. When you get a vehicle history report you can detect a potential odometer fraud before you purchase.

Accident information – The safety and resale value of a vehicle is affected by previous accident damage, so this is another information to look for.

Rental cars – These vehicles are driven by many people under often brutal driving conditions.

Today you can easily get a vehicle history report online. Always check the history of the vehicle before you purchase a car.

Curbstoners are car dealers, who sell their cars on the street by pretending to be private sellers. Buyers of used vehicles should be very careful to be able to detect scams of curbstoners. These are some tips to be used:

• Remember, that if it sounds too good to be true, it probably is. If you think that the price of a used car is too good for what you are getting, then the dealer or the seller is probably trying to scam you.

• Always check and make sure that the name on the driver license of the seller is consistent with that of the title of the car. If the names do not match, do NOT buy the car!

• Take the car to a qualified mechanic that you know and have it inspected. The car inspection can spot any problems of the vehicle you intend to buy.

• Get a vehicle history report, which will be able to will identify any flooded vehicles, salvaged vehicles, prior major accidents, rolled-back odometers, etc.. Reports will also show title transfers. There are a number of services online that allow you to run a vehicle history report.

• Try to purchase a vehicle from a reputable car dealer, rather than from a curbstoner.

• Avoid buying a car on the internet.

Customers, who can’t afford a new car, choose the option of buying a used car. Used car dealerships are a good place to find used cars at a discounted price. The pre-owned cars are usually sold through franchises, independent dealers, rental car companies, private sales, auctions and leasing companies.

Used cars actually make up a large portion of the vehicles bought in the state of California. However, buying a used car can sometimes be complicated as it may have mechanical problems, and in some cases it may have been in an accident and was rebuilt.

Very often dealers sell you these cars without disclosing the problems and the history of the vehicle. These actions of the dealer are viewed as car fraud. This is why you should always get a vehicle history report of the vehicle you consider of buying. Vehicle history reports are very easy to get. They track the record of any vehicle through its vehicle serial number. The reports will contain any information about accidents or major repairs, any lemon law buybacks, any odometer fraud and other relevant data on the vehicle.

In some cases buying a used car makes more sense than buying a new car, especially for those consumers who are trying to save money. That way you get a car that is new to you, and you can trade in one that is too old and causing you problems.