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How do I avoid scams when buying or selling a car?

  • A rundown of all the dodgy dealings to look out for
  • Do as many checks on a car you can before buying
  • Watch out for dealer buzzwords and offers
  • A rundown of all the dodgy dealings to look out for
  • Do as many checks on a car you can before buying
  • Watch out for dealer buzzwords and offers

Whether you’re buying or selling a car, there are lots of unscrupulous people willing to scam you for an unfair price. Parkers gives you the full low-down. 

Make sure you’re armed with the knowledge to spot a potential scam. We‘ve listed 10 of the most common scams when it comes to buying and selling a car - keep your eyes peeled for any of these signs. 

Cloned cars

This is a classic scam usually carried out by organised criminal gangs. A car is stolen and then set up to look exactly like a legitimate car of the same make and model. The VIN (vehicle identification number) may be altered and in some cases even the V5 is cloned so the car seems genuine. Watch out for extremely cheap cars with high specifications and always try to meet sellers at the address shown on the V5.

The low valuation

There are a number of traders offering to offer you cash for your car, which is fine but be wary of online companies that offer much less than their online valuation when you get to the premises to do the deal. Usually, an engineer looks at your car to find faults (which may not even exist) and lowers the original offer. Because you've taken to the trouble to get to the location you feel you might as well go ahead even though you are losing money. It's not illegal, but you need to be aware of the pitfalls.

Finance ‘falls through’

You walk into a dealership, pick a car and agree to buy it on finance. Everything goes through perfectly until a few weeks later when you receive a call from the dealer: Apparently, your finance deal fell through because of bad credit and you'll have to pay extra. This scam is aimed at people with rocky credit history with the loophole usually hidden in contract small print.

Beware of ‘agents’

There is a trend where 'agents' advertise cars for sale on auction sites. In reality the agent doesn't have any relationship with the true seller and just copied the advert. Then you transfer your money and never hear from them again. Always make sure the person is the seller - be skeptical of people claiming to be selling the car on behalf of a friend. 

Dealer prep

This practice isn't illegal but is something to watch out for. When you buy a new car, always check the small print to see if the dealer is charging you a ‘dealer preparation' charge. This is usually written right at the bottom of the invoice and it is payment for the dealer getting the car ready for collection. Quite often you find dealers charge substantial sums yet only have to carry out a few hours' work.

International scammers

You find a car on a sales website for an unbelievably low price. You contact the seller who opens a dialogue via e-mail and explains the car is in mainland Europe and they can't keep it for some reason - usually they blame the credit crunch. The seller suggests the sale is completed through a well-known money transfer site, which they will supply a link to. The scam is that the site is actually one the seller created recently to steal your hard-earned money. Usually these people won't take direct phone calls and will only let you email them. 

Poor credit history/high APR

This one relies upon you not knowing your own credit score. The dealer will simply agree to a finance deal with a very high APR, which he justifies by telling you about your bad credit. Find out what your credit history is and head of false claims of poor credit ratings with the facts.

‘We’ll pay off the finance’

You buy a new car and part-exchange your old one but still have finance outstanding on the car you wish to trade. The dealer agrees to pay the outstanding balance and take the car, knocking the rest of the cash off the price of the new car. A few months later you receive a call from your bank asking why you're not paying your original loan; the dealer didn't do it, and because you didn't sign anything to agree to the deal, there's no recourse either.

Forced warranty

Although it's wise to get a warranty it's certainly not obligatory. Never let dealers tell you that you have to buy one, or that you can't get finance without one. It should be up to the buyer to decide what type of warranty they choose. Your credit score or ability to get credit will never be affected by you agreeing to take a warranty.

Bill consolidation

Beware of dealers or finance companies who offer to sell you a car and ‘consolidate all of your bills into one simple monthly payment'. All this does is it extends the length of payment term and because the APR will still need to be paid over the whole term it effectively increases the final amount you pay. It's not illegal and although you now only have one bill to pay, you actually end up paying a lot more in interest.


 

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