Here are five used car scams to look out for when you’re buying on a budget

While Detroit’s public transportation is, at best, available, most people need a car to get around the Motor City.

Used cars can be a more affordable option for Detroiters who need some wheels, but the biggest warning for prospective used car buyers is the prevalence of car scams.

“Purchasing a used vehicle is often an anxious, uneasy experience for buyers who only engage in this type of transaction every few years and aren’t often making purchases with such large price tags,” Attorney General Dana Nessel said in an April statement urging Michigan residents to use caution when purchasing used cars. “Following several key tips on vehicle inspection and taking your time to thoroughly review any agreements you are signing can give buyers confidence in the process and the purchase.” 

The state’s “Lemon Law” mainly protects against new passenger vehicles, SUVs, pickup trucks and vans purchased or leased in Michigan, or purchased or leased by a Michigan resident. The Lemon Law applies to used vehicles if the vehicle is still covered by a manufacturer’s warranty — different from a dealership’s warranty — at the time of purchase or lease. 

Consumers typically do not have the right to cancel a purchase contract, despite common misconceptions. The attorney general’s office warns that there’s no “cooling-off period” when purchasing a car, and sellers who choose to cancel a contract can legally pass on reasonable cancellation costs to buyers.

The Federal Trade Commission (FTC) has received more than 35,000 reports of auto-related complaints so far this year. By this time last year, more than 40,000 reports had been filed.

Scammers are getting harder to spot. Here’s a guide on what to look out for.

Scam 1: Lowballing

One of the easiest scams to fall for is lowballing, where sellers try to get rid of a car for far below its actual value. While it’s good to look for a good deal, sellers who are shady about the car’s history or say things like “I don’t need the money” may be out to scam you.

How to avoid: Experian recommends buyers know the market price of the car they are interested in, using sources like Carvana or Kelley Blue Book. Take the car on a quiet test drive to see and hear if you notice any mechanical problems. Request a pre-purchase inspection, and demand to see the vehicle’s history.

Scam 2: Curbstoning

Buying cars from a private seller is risky, though it is often the cheapest way to purchase a vehicle. This is because private sellers can sell defective cars without abiding by the Lemon Law, even if the cars would typically be covered under the law.

Scammers sometimes plan to meet prospective buyers in front of a private residence or an empty parking lot and attempt to sell a defective vehicle.

The State of Michigan requires any “person, partnership, or corporation engaged in the business of buying, selling, brokering, or dealing a vehicle (required to be titled under the act) be licensed to do so by the Department of State.” The FTC defines a “dealer” as any person or business that sells or offers to sell six vehicles in 12 months. 

Prospective buyers can look up a dealer’s license on the state’s Department of Licensing and Regulatory Affairs website.

How to avoid: Autotrader recommends buyers attempt to only buy from used car dealerships and always ask to see the dealer’s license, which it is required to have. If not, verify that the title of the car is in the seller’s name. Also, look up the vehicle’s history on websites like Carfax or AutoCheck to get a full scope of what you’re purchasing.

Scam 3: Title washing

Title washing is the act of removing information from a car title illegally. Scammers would remove critical information about outstanding loans, whether the car has been in an accident or anything may indicate the vehicle was stolen. The result is a car that’s worth a lot less than it was sold for.

This scam isn’t just bad for your wallet. It’s also dangerous: Used cars that were totaled or in a major accident have long-term reliability issues that may be unnoticeable at the time of purchase. 

How to avoid: Carfax recommends buyers use a car’s vehicle identification number (VIN) to track the vehicle’s history. The VIN can usually be found near the windshield on the driver’s side and on the driver’s door.

Scam 4: Odometer rollbacks

The National Highway Traffic Safety Administration (NHTSA) says more than 450,000 vehicles with false odometer readings are sold each year, costing buyers over $1 million annually.

Scammers can tamper with the odometer reading to sell vehicles at higher prices, or to hide the gap in time between service appointments or previous sales. This scam is getting more popular — a 2022 Carfax report showed a 7% increase in odometer rollback reports, compared to the previous year.

How to avoid: NHTSA says the best way to avoid this scam is to compare the odometer reading on the original title with the vehicle’s odometer. Also check the vehicle’s hardware: Vehicles with less than 20,000 miles should still have the original tires, while the wear and tear on the gas, brake and clutch pedals should be appropriate for the miles displayed.

Scam 5: VIN cloning

VIN cloning is when a scammer tries to sell a stolen vehicle with a salvaged title by removing the VIN and replacing it with one from a similar, legally registered vehicle. 

The National Insurance Crime Bureau (NICB) says VIN cloning is a highly lucrative crime — scammers will travel across state and international borders to sell fraudulent vehicles.

Buyers who fall for this scam can have their car repossessed and returned to the original owner, or just end up with a defective car. 

How to avoid: NICB recommends checking a used vehicle’s VIN with a local Secretary of State office before purchasing. Also, compare the VIN near the windshield to the VIN on the driver’s door for evidence of tampering.

Quick tips when buying a used car

The FTC recommends all prospective buyers research the models they are interested in. This includes associated costs, such as registration fees, insurance, gas and general maintenance.

If you are buying a used car from a dealership, the dealer must display a buyers guide — a comprehensive guide that tells you every mechanical and electrical system on the car, whether it has a warranty, the details of the warranty, dealer’s contact information and other critical information.

The FTC also recommends getting all oral promises in writing and retaining those copies for as long as you own the vehicle.