Buyers' Guide: Car-buying scams
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Selling your car online is a wonderful convenience, but it’s also become a feeding ground for scammers. The good news is that with a few precautions, you can avoid these traps.
A simple scam is selling a car with outstanding finance. In New Zealand, the finance stays with the car and not with its owner, so if you buy a vehicle with finance owing on it, you’ll get more than you bargained for.
If a vehicle is listed with a bargain price tag, it’s often to lure in a quick sale and it’s usually a rushed affair. The seller may use the excuse that they’re moving overseas to back up the urgent nature of the sale.
Typically there’s nothing wrong with the car, few contact details are exchanged, the car is re-registered and it’s not until months later when a repossession firm shows up to take the car away that you realise the car even had finance owing.
This isn’t an overly complicated scam and it happens often leaving those affected carless and penniless.
Sometimes sellers will advertise a trade offer where the listed car is of greater value than your own. Again, this will try to lure you into a quick trade without doing the appropriate finance checks beforehand.
Both are easy traps to fall into but look for early warning signs — if the deal is too good to be true and the seller is reluctant to exchange details about them and the car, there’s usually something dodgy going on.
If you have doubts, always get the appropriate finance checks done on a vehicle before you decide to buy it and give yourself peace of mind that you’re not about to buy a car while also gaining thousands of dollars of debt.
Scams targeting online car auctions appear to crop up more frequently. In these situations the scammer is usually overseas or out of town and wants to buy your car for their father, mother or other relative.
They might tell you their elaborate life story to make it seem as though they have a heart of gold and are trustworthy.
Initially, the buyer will contact you and will offer to buy the car for the exact asking price on the website, no questions asked. They’ll ask if they can pay you using some sort of online payment system such as PayPal or Western Union.
Before you know it, you receive a fraudulent email saying that payment has been processed, along with extra money to cover the costs for transporting the car to a fake address.
The buyer is in a rush for some reason and will ask you to pay the extra money into a shipping company’s fake online bank account ahead of the money being cleared into your own account. The fake confirmation email makes it seem legit, so you transfer the shipping costs as requested.
A couple of days pass, the money has left your account but the payment into your account still hasn’t been cleared.
The type of online money transferring system that was used turns out to be hard to trace — and near impossible to get your money back from. This time it’s the buyer that disappears, but once again, you’re left out of pocket.
There are several early warning signs to watch out for with buyers, such as lack of personal contact details, the buyers’ overseas location, unconventional payment methods that are hard to trace and the urgency of a sale.
Our advice is to avoid rushing into anything — these things can and should take time.
Do your homework and ensure you carry out all the relevant history checks beforehand as revealing hidden problems such as outstanding finance can save you money in the long run.