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OMVIC Blog: Car Buying Tips

5 Tips On How To Avoid Online Car Buying Scams

Sep 18

Written by: OMVIC Communications
Friday, September 18, 2015  RssIcon

If you’re looking to purchase a late model used car or truck, chances are you’ve checked out some of the online auto marketplaces such as Kijiji, AutoTRADER, Craigslist or others. While there are a lot of legitimate vehicles available through these sites, there are also a number of sophisticated online scams you should watch out for. 

Online Car Shopping


Know A Scam When You See One

Recently, OMVIC has warned Canadian online car shoppers about two notorious scams designed to separate consumers from their hard-earned money: the phony private seller; and the phantom US dealer. Both have tell-tale signs that, if spotted, will alert the potential buyer to the dangers posed by these rip-off artists.



Scam 1: Too Good To Be True – Amazing Deals from “Private Sellers”

A common way to lure car buyers is by offering an exceptional deal on a desirable car. These vehicles are usually priced below market value….and since we’re talking too-good-to-be-true prices – who does that? Who sells cars for less than they’re worth? Nobody legitimate.

So when you find one of these “deals” offered by a “private seller,” you’re likely to discover the vehicle isn’t local – despite where it’s advertised. The seller will claim he/she has moved and left it in storage or with a shipping company or on a military base (CFB Gander seems to be popular with scams targeting Canadians); it’s simply too far away to visit or in a locale no one can access. But not to worry – the seller is likely to offer to pay the shipping fees for the car…and if you don’t like it, you get your deposit back! What could go wrong…right?

But the fraudster’s not done with the deception – more bait is required; more trust needs to be built. So next the seller will ask you to wire transfer a deposit or use an online payment system to secure the deal or to deposit funds into an “escrow” or “trust” account. That way your payment or deposit is held safely, until you can see the car and complete the deal. The reality is, despite the guarantees, the seller and car are usually fictitious…the trust account can’t be…trusted, and the deal is a too-good-to-be-true scam. So run, don’t walk, and count yourself an informed consumer. >>Don’t get ripped off!



Scam 2: Phantom Dealerships Posing As Private Sellers

The ads from these scam artists look like they’ve been placed by private sellers but when you call you’re told the seller is actually a U.S. dealership. They’ll provide a fairly convincing story as to why the dealer is advertising the vehicle in Canada (e.g. a Canadian traded it in at their dealership but due to the difference in US/CDN vehicle regulations, it’s easier to sell it to someone here in the Great White North rather than to an American – apparently they’re adverse to speedometers in km/hr). The problem is, the dealership and vehicle aren’t real.

According to OMVIC, the most recent names these phantom dealerships appear to be operating under are Garden City Trucks, supposedly based in Kansas, and Ken’s Kars Florida (there are many others out there). So why is the scam so successful? The scammers have prepared an elaborate ruse to get victims to believe their story and drop their guard. Here’s how: once you call the number listed in the ad, you’ll be directed to the “dealership’s” website. “Don’t underestimate the lengths these scammers will go to to lure you in,” warns Terry O’Keefe, OMVIC Director of Communications and Education. “These websites are very professional with extensive inventory listed and very convincing customer testimonials.” They’ll also create hundreds of glowing testimonials for their “dealership” on review websites like Yelp. Once the consumer believes they’re dealing with a legitimate business, defences drop, monies are sent, promises are made, and shortly after, the dealer’s fancy website disappears…along with the consumer’s money. >>U.S Scam Targeting Canadians



Use These 5 Tips To Avoid Online Car Buying Scams

So, whether you’re considering buying from a dealer or a private seller, here are five signs of a scam and how to avoid them:

  • The ad is posted locally but the vehicle is located a long distance away. Travel to see the vehicle (don’t rely on pictures), or even cheaper, hire a local appraiser or mechanic to inspect the vehicle. They can ensure the vehicle actually exists.

  • There are excuses why an inspection of the vehicle isn’t possible (e.g. Located in a secure compound, military base, etc.). If the vehicle cannot be accessed for an inspection, how will it be accessed for delivery and possession?

  • The seller agrees to ship the vehicle to you with a money back guarantee. Don’t trust that the seller will follow through with this promise or that a trust or escrow account is real.

  • Pictures don’t reflect the season or the locale. Look for signs in the ad’s picture(s) that might indicate the vehicle is located where it’s supposed to be; things like leaves on trees or snow (when there should/shouldn’t be any), palm trees, tropical plants. And what licence plates are on the vehicle in the pictures? If none, why not? When in doubt, ask the seller to provide a specific photograph of the vehicle – perhaps one with that day’s newspaper in it.

  • The vehicle is priced below market value... If a price seems too good to be true, it’s a warning not an opportunity.

When purchasing a motor vehicle, you are only protected by Ontario’s consumer protection laws, and have access to the Motor Vehicle Dealers Compensation Fund when you buy from an OMVIC-Registered Dealer.



OMVIC Protects Car Buyers In Ontario

An educated and informed consumer is a protected consumer. Visit OMVIC’s website to learn more about your car-buying rights and when they apply, as well as additional tips on buying a car in Ontario.

As the regulator of motor vehicle sales in Ontario, OMVIC protects consumers and maintains a fair and informed marketplace by:

  • Maintaining strict registration requirements for Ontario’s 8,000 dealerships and 26,500 salespeople
  • Regularly inspecting all Ontario dealers (new and used)
  • Providing free complaint handling to consumers
  • Developing/delivering consumer and dealer education/awareness programs
  • Investigating and prosecuting industry non-compliance and illegal sales (curbsiding)

To learn more about OMVIC visit omvic.ca.


        

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