Auto Finance Alert: Vehicle Transaction Scams Increasing Nationwide

With new and used car prices reaching all-time highs as a result of economic problems stemming from the pandemic, supply chain disruptions and other factors, motor vehicle users are searching not only local but also national markets for sales. Normally, this type of search might lead to excellent deals, but criminals have found ways to take advantage during these hard times of lax security precautions by desperate, stressed people.

Before you buy or lease any vehicle, read more to learn how thieves might cost you tens of thousands of dollars or possibly even your identity:

Scams in Recent News...

The Better Business Bureau (BBB) reported in April that a California consumer lost $82,000 to a thief who pretended to be an Indiana car dealer. This type of scam is in addition to last month's news that criminals are using Facebook Marketplace and other social networks to find unwitting victims looking to buy or sell vehicles and robbing them once they meet in person.

These instances of theft aren't the only ways that you might lose money when trying to procure a new or new-to-you car. Many certified dealers and sales agents have increased their questionable practices and bait-and-switch tactics designed to trick people into spending more money. Beyond offering unnecessary gap insurance and extended warranties usually covered by a driver's auto insurer or manufacturers, respectively, some dealers lure buyers with special sales for specific outfitted vehicles and then claim that the models sold out but that they have "similar" options available at slightly higher prices. Some dealers also inform potential buyers that they might have to wait months for delivery unless they pay extra for an expedited shipping service.

How You Shop Matters

The BBB and other experts warn potential buyers and sellers that they need to take serious precautions when they become involved in online vehicle transactions. Whatever position you're in, you should never finish any sort of transaction without talking to the other party at least once on the phone and also meeting with them in person in a high-traffic public location during a bright, sunny day. If the transaction involves a private sale used car, the best place to meet is near a fire or police station. They also warn that deals that seem "too good to be true" are usually scams, especially if the seller gives you a sob story about why they're selling a newer vehicle at a low price that doesn't remotely match the Kelley Blue Book or manufactuer's listed price.

How You Pay Also Matters

Fraud experts note that buyers should always pay by credit card since cardholders can pursue disputes and report fraud far more easily than if they complete bank-to-bank or wire transfers. They also should ignore criminal claims that Craigslist, eBay, PayPal, Facebook Marketplace and other platforms guarantee transactions discussed or completed through their platforms. Additionally, buyers need to stay away from cash and money order deals. Unlike with credit cards and checks, no fraud protection exists for hard-to-trace cash and money order transactions.

Safeguard Private Personal Details

Some thieves claim that they need private details like your full legal name, address, phone number, email address or possibly even your driver's license or Social Security number. The only time you should provide any of these details together is if you physically enter a bank branch or dealership to complete the purchase or sale of a vehicle with a representative who can prove that they're legit.

You should also never provide the last two pieces of information online because thieves can use them to steal your identity and apply for credit cards and other loans or even vehicle leases and rentals. You should even refrain from talking too much socially about yourself as you try to learn more about the other party. Any personal details can help criminals perfect their profile of you.

Try These Places During Your Search

Instead of using classified advertising, community or social networking sites to find the best new and used car deals, you should go to websites that you know offer accurate information. For example, you can often find legitimate, safe dealers and sellers by visiting the websites of manufacturers who design specific makes and models. Typically, manufacturers provide a "Dealership Locations," "Find a Dealer" or "Find Dealers" link somewhere at the top of their home pages that leads to an address or ZIP code search option.

If you're unable to buy or lease a new vehicle, a local dealer can usually refer you to a used car dealer they trust. No matter who you consider, it's important that you research the business or individual thoroughly online via business and consumer review sites to find out more about the good and bad experiences of other buyers.

Things to Keep in Mind

These are only a few of the many ways in which an individual or group of people might attempt to separate you from as much money as possible when you're trying to buy a new or used car. The key to saving money and preventing theft is learning about these scams and acting with caution during every step of the process.

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