Buying a Used Car: Red Flags and Common Dealer Scams

(Photo by Nima Sarram on Unsplash)

Purchasing a used car can be an excellent way to save money, but it requires careful attention to detail to avoid falling victim to scams or purchasing a vehicle with hidden issues. Understanding red flags and common scams used car dealers employ will help you make an informed decision and protect your investment.

Red Flags to Watch For

1. Unusual Vehicle History Reports
   Always request a vehicle history report, such as those from Carfax or AutoCheck. Red flags include reports of frequent ownership changes, salvage titles, or prior accidents. If the dealer hesitates to provide the report, proceed with caution.  In the Philippines where there is no vehicle history report, careful obvervation of the seller's story about the car might give away some inconsistencies.

2. Inconsistent Mileage
   Check the odometer for signs of tampering. If the mileage appears unusually low for the car’s age, compare it to maintenance records or previous sale listings. An altered odometer is a common tactic to inflate a car’s value.  Scammers sometimes remove the check engine bulb so that it does not light up when there is a problem.  Before turning the engine on and while the key is set to accessories ON, verify that the check engine light is on.

3. Signs of Flood Damage
   Cars exposed to flooding often develop long-term electrical and mechanical problems. Look for water stains, musty odors, or rust in unusual areas, such as under the seats or dashboard.  Check the dashboard if check engine light is on when the car engine is on.

4. Incomplete Maintenance Records
   A lack of maintenance history could indicate neglect. Ensure the vehicle has undergone routine servicing, and be wary of excuses for missing documentation.

5. Suspiciously Low Prices
   If a deal seems too good to be true, it probably is. Extremely low prices might indicate underlying issues, such as mechanical defects or a hidden salvage title.

Common Used Car Dealer Scams

1. "Curbstoning"
   Some dealers pose as private sellers to offload problematic vehicles without accountability. These sellers may use fake names and addresses to avoid being traced. Verify the seller's identity and confirm the car’s ownership through official documentation. 

2. "Daily Driven"
   Another way they scam you is they bring a relative along on the way to office or school as if the car is being daily-driven, and the relative gets off to just get a cab so you can proceed with the deal.  So you are like "wow, this car is used daily, it must be in great condition!"  Fell for this trick once :)

3. Yo-Yo Financing
   In this scam, a dealer lets you drive away with a car before finalizing the loan, then claims the financing fell through. You may be pressured to accept a higher interest rate or return the car after paying non-refundable fees. Always ensure financing is fully approved before taking possession of the vehicle.

4. Spot Delivery Tactics
   Dealers may promise a car is ready for immediate delivery but fail to disclose outstanding issues, such as incomplete safety inspections or pending repairs. Insist on a thorough pre-delivery inspection before signing any contracts.

5. Add-Ons and Hidden Fees
   Be wary of unnecessary add-ons, such as extended warranties or paint protection packages, which dealers often sell at inflated prices. Review the itemized contract carefully to spot any unexpected charges.

6. Title Washing
   Some dealers illegally alter a vehicle’s title to remove indications of damage or salvage history. Cross-check the title with vehicle history reports to ensure it matches the car’s past.

How to Protect Yourself

• Inspect the Car Thoroughly: Bring a trusted mechanic to evaluate the car's condition. They can identify hidden mechanical issues or signs of past damage.  An up and down idle could be caused by bent connecting rods, probably due to the car eating water in a flood situation.
• Test Drive the Car: Drive on various roads to assess handling, braking, and performance. Be attentive to unusual noises or vibrations. Even a 10-minute climb on a steep road will expose overheating problems right away.
• Verify Documentation: Double-check the Certificate of Registration (CR), engine number, and chassis number. Confirm these details match the seller’s records and the vehicle history report.
• Shop Reputable Dealers: Look for dealerships with positive reviews and a history of fair practices. Avoid sellers who pressure you into making a quick decision.
• Get Everything in Writing: Ensure all verbal promises are documented in the sales contract.

Buying a used car requires vigilance, but being aware of these red flags and scams can save you from costly mistakes. Take your time, ask questions, and trust your instincts to find a vehicle that meets your needs without unnecessary risks.