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Top 10 Ways to Avoid Used Car Fraud

  • By CARFAX Canada

  • Time to read: 6 minutes

Next to a house, buying a car is one of the most important purchases you as a consumer can make. Purchasing a used car can be the perfect way to find a vehicle that suits your needs, your lifestyle and your budget.

As with any major purchase, you need to do your due diligence before buying a used car to make sure the vehicle is right for you and to avoid any frauds or scams. This process requires research, careful consideration and time to look around at different models and retail avenues.

We’ve compiled 10 tips to help you navigate the used vehicle market and ensure you get a great deal and a great car.

1. Watch for ads or sellers that are too good to be true

If you’re searching through online or print classifieds and the price of a vehicle seems too low in comparison to what other people are charging or what the typical value of that make and model is, then you might want to consider why this is. This also holds true throughout the shopping process – if the seller will only communicate by email, gets too pushy or does something that sets off your alarm bells, walk away from the sale.

2. Beware of curbsiders (also called curbstoners and curbers)

A curbsider is an unlicensed individual, dealer or retailer who sells cars with the goal of making a profit. A curber will buy up vehicles and instead of registering them under their own name, they post the same vehicles for sale with a mark-up. The curber will pose as the previous owner or tell potential buyers that they’re selling the car for a family member or friend, often playing on a buyer’s emotions by telling them a sad story. A curber might misrepresent the real condition of the car, turn back the odometer or hide major issues and will typically convince the new buyer to pay with cash in order to avoid a paper trail. The curber ends up making a profit on the vehicle but avoids paying any taxes. They often have several cars for sale at the same time and usually request that the potential buyer meet them in a public place to avoid revealing their own personal address and information.

3. Get the CARFAX Canada report

A CARFAX Canada Vehicle History Report will provide you with relevant and important information about the history of the vehicle, including accident information, registration details, information about liens registered against the vehicle in certain provinces and/or territories in Canada depending on the report you purchase, and U.S. history. Ask the seller if they can provide you with a report or buy your own to learn about the history of the vehicle. Each CARFAX Canada report comes with an active web link from carfax.ca. You should check the link, as well as the paper copy, to make sure the hardcopy the seller provided corresponds with the online version.

4. Check out the dealer

If you’re buying your used car from a dealership, then look into the dealer’s background and reputation. Each province in Canada has a provincial governing body that issues dealer licenses, a requirement in order to legally sell vehicles in Canada.

5. Look for liens and stolen cars

Depending on which CARFAX Canada report you select, you can search for liens registered against the vehicle. A lien on a vehicle is an interest in the vehicle that the owner grants to another party, usually as security or collateral for a debt, until such debt has been discharged. If the vehicle has an outstanding lien on it, the new owner could be liable to pay the amount owed. CARFAX Canada’s reports also contain information from the Canadian Police Information Centre and by reading the report, you’ll know if a vehicle is marked as actively stolen.

6. Verify the seller’s identity and the VIN

Ask your seller for proof of identity and check that the seller’s name and address matches up with the information on the vehicle registration form. You want to know that the person selling the vehicle is actually the owner. Make sure you’re looking at the actual registration form as well and not a photocopy. This is also a good time to double check the make, model, year, license plate and vehicle identification number (VIN) of the car against the registration form. The VIN number can be found on the vehicle’s dashboard, looking in from the windshield on the driver’s side and is also located on the door jamb/post, inside the driver’s side door, where it latches. Have a look at the number to see if there’s any evidence of tampering. The numbers that are used in each VIN actually tell the story of when the vehicle was made, the make, model, body style and country of origin. You can check out CARFAX Canada’s free VIN Decoder. Rolling the odometer back is a sneaky way to increase the value of a car with high mileage. Have a look at the actual odometer – do all of the numbers line up and is there any evidence of sabotage (scratches, cracks) in and around the odometer? Does the wear and tear of the seats, steering wheel, brake pedals and overall interior show more use than the mileage would indicate? The average vehicle use per year is around 20,000 kilometres so if the car falls far below this you might want to question it.

8. Double check the condition of the car

When you get the opportunity to check out the vehicle, give both the inside and the outside a thorough inspection to make sure it’s consistent with the condition that the seller is advertising. When it comes time to go for a test drive, don’t rush – it could take up to 30 minutes to accurately gauge how well the vehicle is running. Don’t forget to listen for any strange or telling noises.

9. Don’t pay before you get the vehicle

Never agree to pay for the vehicle upfront or send money via wire transfer. While a small deposit can be a great way to let the seller know you’re serious about purchasing the car, don’t hand over the full amount to the seller until the day the car is ready to go home with you. If the seller requests a third-party escrow service, investigate the service to make sure it’s legitimate and secure, as many online escrow sites are fraudulent.

10. Take the vehicle for a pre-purchase inspection

Get an independent, licensed mechanic to give the vehicle a detailed pre-purchase inspection. He or she will be able to spot any issues that the vehicle might have as well as share any concerns about potential repairs or replacements that will cost you down the road. Bring your CARFAX Canada report with you as you’ll want to verify that any damage was properly repaired.

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