Right now conditions are ripe in the UK for car criminals and fraudsters to prosper. Used cars remain pretty expensive and many of us have less money to spend on a new vehicle. Criminals prey on financial vulnerabilities. In this blog we look at a recent publicised example of a car scam and provide our 5 golden rules on how to buy a car online without becoming a victim.
A car sales scam case study
AD Car Sales Ltd and Miller Car Sales Ltd are examples of two legitimate companies that have been used (cloned) by criminals to sell vehicles that were not theirs to sell. The scams were brought into the media by an investigation started by Car Dealer Magazine earlier this year. The legitimate companies’ details were used to trade under and launch websites. On these sites a number of car adverts were published and these were promoted on social media.
But the vehicles advertised were images taken from other websites. None were available for sale. The AD Car Sales website was taken down by the authorities, but a week later the criminals reinvented themselves as Miller Car Sales, launching a new website. The website remains active now, with ongoing investigations being undertaken to identify those perpetrating the scam.
How does the scam work?
Cars are advertised for sale at lower than market values to attract buyers. The buyer rings the phone number on the website or social media adverts. To secure access to the vehicle and arrange a viewing they are told they have to put down a deposit. The customer pays the money over and books a viewing. When they turn up at the site in Lambert, Scotland there is no dealership there. The salesperson at the other end of the phone refuses to give them their money back or denies receiving it.
This sort of fraudulent outfit is known in the trade as a ‘ghost dealership’. Everything looks fine on paper and on the website. But when more checks are made it becomes clear it is an example of organised financial crime. The fraudsters have a computer, a phone and a bank account but no vehicle stock.
The three tell tale signs of a scam in this case:
- Price is too good to be true
- Dealership cannot be seen when running a Google street view map on the address given
- Dealer is asking for a deposit over the phone
The 5 golden rules of how to buy a car without falling victim to scammers
So what steps should be followed? Our 5 golden rules are below. Taking all of these things into account will ensure you don’t fall victim to a scam when buying a used car.
1. Price too good to be true? It probably is
Criminals will often look to sell dodgy cars by pricing them low to attract buyers often on online selling platforms such as Facebook Marketplace, eBay, Gumtree etc. If the car is stolen then any amount of money paid for it will lead to profit for the seller. Do some basic price research on websites first. If one car is priced much lower than others that have equivalent spec/condition, without justification, then avoid it. Total Car Check provides a vehicle valuation in its Gold Check which gives a good indication as to what the market value of a vehicle is. Our free basic check now also allows you to search the local area for vehicles on sale by retailers and lists their advertised price.
2. Check the car is legitimate
You can do this initially by buying a full vehicle history check such as a Total Car Check Gold Check. Amongst many other insights, this will tell you if the car holds outstanding finance, has been stolen, was previously written off or scrapped – information you can’t find any other way. Many vehicle check products, including a Gold Check, also come with data guarantees that protect consumers making checks.
However, if the vehicle advertised is not sitting on a forecourt but is owned by a legitimate person or business (as per the case study above) then its history could be clear. Criminals running ghost dealerships will look to run their own checks on the vehicles they purport to be selling. That’s why carrying out all of these steps is important.
3. Check the seller is legitimate
If you are purchasing the vehicle from a retailer or broker make sure you check them out first. Have a look at their website and ensure they publish their customers’ reviews, and that these are positive. If the firm has a poor website and a search engine search returns very little about them then be wary. Also make sure you check on Google Maps to ensure there is a forecourt visible at the address provided on the retailer’s website.
4. Always view and test drive the car
This is really important. It might sound rather basic, but if you are buying a car privately from an individual or from a retailer make sure you view the car in person first. Why?
- To make sure the car is for sale – as covered earlier on this blog. Making sure the car does exist and is actually for sale is a basic but very important check in the age of the internet!
- To check it has not been stolen – following on from section 3. It is important to use the viewing process as an opportunity to check the vehicle for signs of cloning or ringing. These are practices used by criminals to help disguise stolen vehicles. A test drive also enables you to establish if there are any signs of mechanical fault and that the vehicle drives as you would expect it to.
5. Never pay in advance
Probably the most important of all five steps. You can’t lose anything if you don’t make a payment. Always make sure you have the keys and access to the vehicle before you pay. Never pay a deposit or any fee in advance, unless you are buying from a known reputable dealer and have seen the vehicle. There are so many consumers that have lost their money by paying a deposit or holding fee over the phone or transferring the funds across. A large number of cases are as a result of responding to an advert on social media.
The only exception under step 4 and 5 is where you are looking to buy from a reputable online retailer offering a 7 or 14 day guaranteed returns/collection policy if you don’t like the vehicle. They will also take payment up front, but usually through a secure website rather than over the phone. Examples include Cazoo, Cinch and Heycar.
See our detailed used vehicle buyer advice web page for more information about how to buy a car safely.