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Protect your Purchase: Safe Car Buying to Avoid Fraud

April 12, 2012

A car is a major purchase, and the last thing you want is to find out after the fact that you have been tricked out of a large sum of money. When buying a car from a private party there are some steps you should take to ensure you’re making a legitimate deal. Scammers use false documents that may look legit to get you to hand over cash, only to find out you are not the legal owner of the car or that you now own a car that was previously written off or is damaged. You can ensure that a used car transaction goes smoothly and safely by following a few simple steps before you buy.

Vehicle History Reports

The quickest way to find out what that vehicle has been through in the past is you obtain a vehicle history report. You will need the VIN (vehicle identification number) in order to obtain this report, which can be found in two locations on most cars. Check the dash near the windshield, usually on the driver side, and also check the inside of the driver’s door. While you’re checking, make sure that the two VIN’s match each other. They should also match the VIN as listed on all of the legal documents including the title to the car.

A vehicle history report can be ordered online and will tell you many things about the history of the vehicle. It will show all work done on the vehicle at a registered shop or dealership as well as any accidents that the vehicle has been involved in which were reported to an insurance company or law enforcement. It’s important to note that any damage to the vehicle that was not reported and was repaired off the record will not show up on a vehicle history report.

The report will also tell you if the car was ever written off by a car insurance company, which can greatly influence the resale value of the car.

Get an Inspection

Before buying a used car you should always have it checked out by a trusted mechanic. Be sure that you choose the mechanic and don’t let the seller talk you into using a “friend” of theirs. Go to someone who is objective and fair. There may be damage to the car that was repaired under the table and without reporting it to any legal agency. This means it won’t show up the vehicle history report, but a good mechanic will spot it.

Getting an inspection will catch any problems with the car that the seller isn’t telling you about as well, such as major repairs that need doing or other problems they might not choose to disclose. Because a used car sale is “as is”, you will find yourself struggling to get your money back if it turns out you bought a lemon. Of course, it is fraud on the seller’s part to fail to disclose major issues with the car, but you will be required to prove it in courtroom in order to get any compensation. It’s better to check for any issues in the first place.

Look Out for Discrepancies

Take a look at the title of the car and look for anything that doesn’t make sense. It should be in the seller’s name – use extreme caution with anyone who claims to be selling a car on behalf of a friend or family member – and should have their current address listed.

Look for any discrepancies in the paperwork on things like the odometer reading, the VIN number or anything else that doesn’t match up. It’s also important to check for any liens on the vehicle. If the seller still owes on a loan then the car sale needs to proceed through the lien holder to ensure they are paid off before ownership can be transferred.

One of the biggest red flags when it comes to fraudulent used car purchases is a price that seems too good to be true. Use the available information about the value of the car such as blue book pricing to determine the usual range, and compare the price of the vehicle to other similar vehicles on the market. If the price is considerably lower odds are good you are looking at some sort of fraud – most likely that there has been major damage to the vehicle which may not have been properly repaired.

When buying a used car from a private party caution and diligence are your best weapons against potential fraud. Take the time to review the facts, check out the car’s history and make sure you know what you are buying. Once you hand your money over, you will have an uphill battle to get it back if things aren’t legit. Be on the lookout for anything suspicious and keep all the paperwork in order, and you can have a satisfying buying experience.