Scams and Illegal Practices In Car Buying

Here's a comprehensive list of scams and illegal practices in new and used car sales, compiled from consumer protection resources:

Vehicle History & Condition Deception

·   Odometer rollbacks: Tampering with mileage readings to increase apparent value (NHTSA reports 450,000 annual cases)[1][2].

·   Title washing: Concealing salvage/flood history by re-registering in states with lax branding laws[1][3].

·   Undisclosed damage: Failing to reveal prior accidents, water damage, or structural repairs[2][3][4].

·   VIN cloning: Using stolen vehicle identification numbers to mask stolen cars[1].

Pricing & Payment Scams

·   Bait-and-switch ads: Advertising unavailable vehicles to lure buyers, then pressuring into pricier options[5][6][2].

·   Payment packing: Inflating monthly payments with hidden add-ons[3][5].

·   Deposit fraud: Collecting deposits for non-existent or already-sold vehicles[7][8].

·   Gift card demands: Requiring non-refundable gift cards as payment[8][9].

Financing Tricks

·   Yo-yo financing: Letting buyers drive off before finalizing loans, then demanding higher rates[10][11][2].

·   Credit misrepresentation: Falsifying credit scores to justify worse terms[2][3].

·   Unwarranted add-ons: Claiming extras like GAP insurance or etching are mandatory[5][6][4].

·   Undisclosed fees: Hiding charges in contract fine print[2][6].

Seller Fraud Tactics

·   Curbstoning: Unlicensed dealers posing as private sellers[9][1].

·   Fake escrow services: Directing payments to sham third parties[8][9].

·   Military/sob stories: Fabricating urgent sales needs to enable scams[8][7].

·   Warranty fraud: Selling worthless extended warranties or pocketing warranty payments[4][2].

Digital Marketplace Risks

·   Fake listings: Using stock photos for non-existent vehicles[8][7].

·   Phony brokers: Impersonating legitimate shipping companies[8][9].

·   "Too good" online deals: Listing vehicles below market value to attract victims[8][7].

Legal Protections & Red Flags

·   Required disclosures: Demand written repair histories and review title documents[1][2].

·   Mechanic inspections: Always insist on third-party inspections for used vehicles[2][1].

·   FTC CARS Rule: Mandates transparent pricing and bans hidden fees (effective 2024)[6].

·   State lemon laws: Cover repeated unfixable defects in new/CPO vehicles[3][12].

Key precautions: Verify VINs through multiple reports, confirm seller identities, and avoid wire transfers/gift cards[1][8][9]. In California, specific protections against yo-yo financing and payment packing apply[3].

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1.  5 Used Car Scams and How to Avoid Them - Experian      

2. Auto Dealer Fraud & Consumer Protection Laws        

3. Auto Fraud: What Are My Rights In California?     

4. Dealership Scams | Mendel Law Firm, LLC  

5. 8 Illegal things Car Dealers Do - The Homework Guy  

6. FTC CARS Rule: Combating Auto Retail Scams – A Dealers Guide   

7. 12 Used Car-Buying Scams To Watch Out For — and How To Avoid Them   

8. Car Buying Scams: What to Know Before You Buy a New Vehicle       

9. Buying a Car? Here’s a List of Common Scams and How to Avoid Them    

10.   https://ocj.org/news/scams-and-schemes

11. https://www.youtube.com/watch?v=0IJt2ELRISg

12.    https://www.consumeradvocates.org/for-consumers/auto-issues/