Car buying scams and frauds: How to avoid being ripped-off
Fraudsters are experts at making you believe your money's safe with them. This guide describes common cons to stop you from being a victim.
- Common car-related scams explained
- How to spot the signs of a potential rip-off
- Protecting yourself from unscrupulous fraudsters
If you read stories in the mainstream media about victims of scams and think 'well, it'll never happen to me' then you have something in common with those who've been preyed upon by fraudsters — that was exactly how they used to think, too.
As alert and astute as we all can be, a sophisticated trickster can potentially take any of us into their confidence to our detriment.
Many scams and fraudulent activities are based around car-buying and selling. They're easily obtained, easy to pass off as something they're not and by dint of what they are, they're easy to move from one place to another.
Clichéd, maybe, but the most effective advice when it comes to buying a used car is that if something seems too good to be true, it probably is. The Metropolitan Police's advice is to "not let the excitement of buying or selling a vehicle compromise your safety or that of your money".
Sadly, not all scams are based on luring in potential victims with barely believable offers that are fairly easy to spot. This guide focuses on the more realistic-feeling ones that might not ordinarily raise suspicions that are becoming more commplace. We’ve outlined not only what they are and how they work but also what you should look out for to avoid being ripped off yourself.
The virtual vehicle scam
One of the most popular type of scams, it's so called because the use car you’re trying to buy isn’t actually for sale and the ad has been cloned from elsewhere.
How does it work?
In most cases, an online advert will entice would-be buyers by listing an in-demand make and model of car, with attractively low mileage and a slightly below average price tag — scammers have learned that 'too good to be true' pricing won't fool many these days.
The advert is usually cloned from a legitimate source, using a car that is HPI clear, but the seller asks anyone interested to contact them directly via email, thus avoiding the safe contact methods offered by most classified websites.
The scammer will make it appear that the car is being sold by a dealer, yet the associated phone number will go straight to voicemail and a personal email address is supplied to use instead.
Once the scammer has opened up email dialogue, they will attempt to extract a large deposit before the buyer has had the chance to see the car. The fraudster will insist on payment in such a way that the buyer gives them their debit or credit card details, allowing them to put any amount of money through their system.
What are the consequences?
Any amount from a small holding deposit to the full amount of the car, totalling thousands, could potentially be extracted from the victim. Once furnished with your card details, the scammer can take thousands of pounts, while the car won't ever be delivered because it wasn't for sale anyway.
How can I avoid it?
- Always be wary of any car being sold with an associated story — usually about leaving the country imminently, which is the reason for the cheap price.
- Never, ever transfer any money to anyone — no matter how pleasant they seem or legitimate their company seems, without having seen the car first.
- Put yourself in the shoes of the seller — you wouldn't offer a complete stranger a massive bargain or ask them for half the money up front, so why are they?
- Unless you’ve seen it and/or know the seller, never buy a car that’s being sold from overseas – this is a classic scammer’s way of preventing a viewing.
- Buy from a reputable car dealer — the guarantees you get far outweigh the few hundred pounds you might save buying privately.
The fake mileage scam
Modern cars are far harder to clock, yet the number of cars with mileage discrepancies is on the rise. Lowering a car's mileage to increase its value is one of the oldest tricks in the book. Not only is it illegal to falsify a car's mileage, a seller failing to check that the mileage of a car they're advertising is correct is also breaking the law, under the terms of the UK Consumer Protection from Unfair Trading regulations.
How does it work?
In byegone days, a car's instrument binnacle was removed to access and alter the odometer but with modern cars it's done via connecting a computer to the correct port via a cable. The car is then sold under false pretences, often with false documents created to give the impression of a full, clean — and much shorter — service and MoT history. Some will even go as far as to change the pedal rubbers and gear knob for less-worn items as these are tell tale signs of a car's true age.
What are the consequences?
A clocked car, aside from being worth more to the seller, will inevitably be hiding myriad problems associated with a high-mileage motor. It could be that a private seller is simply trying to make more money, although more often that not, clocking is hiding some more serious issues, which may not present themselves until the new owner has bought it. It’s likely that a clocked car has also had its warning lights switched off during the process.
An HPI check using the car’s registration number should confirm the mileage of a car, and any vehicle with a full service history will have its service book stamped with the mileages.
How can I avoid it?
- Get an HPI check and don’t touch anything that looks suspicious — a dealer or seller may try to fob you off in vague terms about inconsistencies but if it doesn’t seem legitimate, walk away.
- Check the car itself for wear and tear consistent with the claimed mileage — if the steering wheel, gear knob and pedals are very worn — or brand new — this is suspicious.
- Buy from a reputable, known dealer, which is highly unlikely to ruin its reputation for a few hundred extra pounds.
- Buy a car check from the AA — it may seem expensive, but it’s well worth it for peace of mind.
- If you do think you’ve bought a car that’s clocked, contact the Citizen’s Advice Bureau www.adviceguide.org.uk — you’re entitled to a full refund.
Where can I check a car's MoT and mileage history for free?
You can't get a full car data history check for free in its entirity but you can get a surprising amount of information on the background of a car for free — including its MoT history, mileage and whether it's currently taxed and on the road.
To get all this information, you simply need to enter your registration number below.
If you can get the registration number in advance you can check online before you travel to see the car, saving a wasted trip. If the registration is covered up in photographs, contact the seller and ask for it. If they seem reluctant then this should set alarm bells ringing.
This basic check will give you information such as when the car was first registered. More usefully, it will tell you if the car is subject to a Statutory Off Road Notice (SORN), plus if it has a valid MoT and when it expires. Any car that is SORNed should not be on the road as it may not have an MoT and it won’t be taxed.
What other car history check searches can I do for free?
If you have the time, you can also fill in a V888 request form and send it to the DVLA to find out information about the registered keeper of a car.
This will give you the registered keeper’s details and those of previous owners, which again helps you establish a fuller picture of the car’s background. You can also request information the DVLA may hold about you if you are about to sell a car and want a clean bill of health for any buyer carrying out these checks.
The 'I have a buyer waiting' scam
Also called vehicle matching scams, a legitimate seller who's placed an advert for their car will be contacted by someone claiming to have a buyer waiting for them, who they'll match with your car for a finder’s fee, typically between £80 and £100. They’ll reassure you that you’ll be refunded if the sale doesn’t happen, making it ostensibly win-win.
Until, that is, the buyer transpires to be a figment of the fraudster's imagination who disappears without trace once they have their 'fee'.
How does it work?
By preying on the natural eagerness of a car seller to make a sale, the cold caller makes the fake buyer seem very enticing, making up all sorts of details about them. In the spirit of all the most successful salespeople, the caller will try to charm the seller into parting with what seems like a relatively minor sum in order to secure the sale.
According to the Office of Fair Trading, car buying scams cost British consumers £3m per year at its peak, with thousands of people scammed, although following a crackdown by the police in 2009 it’s less prevalent — but not entirely eradicated.
What are the consequences?
Aside from the money loss, the scammer is also given access to your bank details, which leads to the possibility of a criminally depleted bank account. Your details could also be sold to another equally sinister third party.
How can I avoid it?
- Never give money to anyone that’s cold called you.
- Don’t give out your credit card details to anyone — you may be protected from fraudulent transactions, but that doesn’t stop your details being sold or used elsewhere.
- Ask yourself why any legitimate buyer would become involved with a vehicle matching company, rather than just looking for a car themselves?
- Callers are trained in high-pressure selling techniques — if you feel coerced, put the phone down and block the number.
- If you are called this way, take as many details as you can about the person and company involved and report them to Action Fraud.
The shady buyer scam
As with all scams, the target is your money and the shady buyer con can get this in a couple of ways – most commonly by a fake overpayment and occasionally by starting a payment dispute after collecting your car.
How does it work?
One common way is that a buyer will email you claiming to desperately want the car — so much so that they're willing to transfer the money via an online payment service. They'll typically claim they’re working overseas but that they have a company that will pick up the car for them.
The money will be transferred — often from a stolen credit card or using a bogus online payment account —then email you to claim they’ve accidentally overpaid before asking you for a refund of the difference.
You oblige but then the scammer withdraws the original payment, leaving you out of pocket for the legitimate money you sent for the overpayment.
A less common but even more sinister ploy is also played out using money transfer services, taking advantage of the buyer protection they provide. A fraudulent buyer will collect your car, having transferred the money, but after driving it away will begin a payment dispute with the transfer service, claiming they didn’t get the car, and demanding a refund. In rare cases, you lose the money and your car, and the buyer is never seen again.
How can I avoid it?
- Leading online payment service PayPal recommends you never transfer money to anyone you don’t know after an alleged overpayment — see its help page for details.
- Similarly, the Metropolitan Police and Western Union Bank also advise not to engage in large transfers for goods with anyone you don’t know.
- Don’t deal with anyone that claims, for whatever reason, they can’t come and see your car — claims of being in the middle of a house move or working abroad are two common excuses.
- Ask yourself why anyone would buy anything as expensive as a car sight unseen?
- Cancel any transaction that involves an overpayment — who would be careless enough to do that?
The fraudulent licence renewal scam
The Government requires that photocard licence holders renew their licence every 10 years, for a £20 fee, or face a fine of up to £1000. This can be done by going to a Post Office or online renewal service. Scammers use this fact to create fake sites that look like the real thing, whose sole purpose is to extract money from you.
The website www.dvla-driving-licence.co.uk was one such fraud site, though it has since been closed down. However, that won’t stop organised crime gangs from setting up more false sites using similar domains.
How does it work?
The person looking to renew is directed to an on-screen form in which they’re asked to declare all manner of personal details, many completely irrelevant but designed to add a sheen of veracity to the scam.
This is among information being requested that’s more financially useful to a scammer, including your passport number, telephone number, address and national insurance number. A card payment is then taken.
The scammer then emails you claiming the payment has been rejected. They will instead request you provide an account number and sort code so that it can be processed.
What are the consequences?
Aside from not actually receiving a new licence, running the risk that your existing one will expire, plus losing the initial card payment, the scammer now has everything he or she needs to clone your identity — and, if you hand over your bank details subsequently, empty your account.
At best you’ll lose a £100 payment and have to re-apply through the proper channels but you could end up the victim of identity theft, have your bank account emptied and have someone engage in criminal activity on your behalf.
This scam also applies to those looking to renew their vehicle tax online. It is often linked to groups running similar scams involving non-motoring matters, such as visa applications.
How can I avoid it?
- Renew your licence by physically going to a Post Office — your picture will be taken, your forms processed and your payment taken safely.
- If you must renew online, do so through proper channels — DVLA or the Post Office
- Be wary of any website that asks for very detailed or superfluous information — do they need to know the length of time you’ve lived at your house or your mother’s maiden name?
- Never enter your bank account details to anyone, either online or via email.
- If you suspect online fraud, pick up the phone and talk to someone — a legitimate operation will always be contactable by phone.
The cloned car scam
As modern cars have become more resistant to crude identity changes, criminals have found other ways to disguise a car’s identity and cloning is one of the most popular.
How does it work?
It involves applying an apparently honest identity to another car, which is usually stolen. By swapping the number plates, registration document and even the Vehicle Identification Number (VIN for short), a criminal will try to convince you the car is genuine.
Some sellers will also try to clone a car if there is outstanding finance owed on it or if there are large fines attached to the car that they are unwilling pay.
A more extreme version of a cloned car is the cut-and-shut, where a car has been created from two or more separate cars. Not only is this illegal, it’s very dangerous as the car will not be structurally sound in the event of an accident.
What are the consequences?
Unfortunately, if you end up buying a cloned car then you will lose both the vehicle and your money. The police will seize your car as a stolen vehicle while the fake seller will be long gone with your cash. Getting any money back via your insurance firm could be a long and fruitless effort.
How can I avoid it?
- To spot a cloned car, carry out a car data history check to make sure all of its details are correct, including colour, engine size and date of first registration — also look for signs for any tampering with the number plates, V5 registration document, service history and VIN.
- The car should be at the address that's listed on the V5 — the seller should also provide ID in the form of a photo card driving licence and utility bill to prove they are the person named on the V5. If they can't or the address doesn't match, walk away.
- Cut-and-shut cars are created to hide the identity of damaged cars that shouldn’t be on the road — look for signs of poor panel gaps and badly aligned panels, different shades of paint and cars being sold for much less than they should cost.
- Ensure the car’s registration document, mileage, MoTs and service records all tally with the DVLA and a car history check — many cut-and-shuts are insurance write-offs that should not be on the road.
- If the number plates on your car are stolen then report it to the police using the 101 number immediately — it may just be vandalism, but it's better to be safe than sorry.
- Criminals won't always physically take your number plates though — if you begin to receive parking fines or penalty charge notices for locations you've not been to, tell the DVLA. Return the fines to the issuing forces/authorities with evidence and an explanation.
The crash for cash scam
Crash for cash scams are on the increase in the UK, costing the insurance industry more than £300m a year. Those costs are passed onto you — it's why your insurance premiums are on the rise. It's now the most common kind of motoring insurance fraud, with criminals targetting private motorists as well as commercial vehicles, particularly HGVs.
How does it work?
You're driving along a dual carriageway when someone overtakes. They pull in and slow down but the car in front of them suddenly brakes. They perform an emergency stop and you, unable to take evasive action, collide with the back of their car. The first car then drives off, the driver seemingly oblivious to the accident they have just caused.
It may all seem like an unfortunate accident but it has in fact all been staged by the two other cars. Chances are there will also conveniently be a witness nearby, who of course is part of the scam. It's known as an induced accident.
When a vehicle crashes into the back of another, it's normally the driver of the car behind that's at fault. So staging these accidents, means you'll be the one at blame, despite it being deliberately set-up.
It can happen in other ways, too. Another car may pull out in front of you, slow down briefly, accelerate and then brake suddenly. The other common one is a car moving normally away from traffic lights or a roundabout, only to hit the brakes for no reason. Or stopping suddenly at a pedestrian crossing, even though it's clear.
Another variation is the flash for cash scam. While you're waiting to pull out of a junction or off a slip road, a car will flash its lights to let you out. Only to then accelerate and crash into you, claiming they never flashed their lights and that you just pulled out in front of them. Remember, legally there's no specific meaning to flashed headlights.
What are the consequences?
Criminal crash for cash gangs target vehicles that they know will be insured and have drivers who they can intimidate. That means older drivers, mums with their children in the back and well-maintained newer cars.
While the accident itself can be scary and stressful, the scam part really comes into its own with the insurance claim afterwards. The criminals will make exaggerated claims for damage to the vehicle, personal injury, replacement vehicle hire, loss of earnings and anything else they can get away with. A successful scam can net the criminals anything from £20,000 to £40,000.
It will result in you losing your no claims bonus and paying more for your car insurance when it comes up for renewal.
How can I avoid it?
- Get a dashcam — if you are unfortunate to be involved in this sort of crash, dashcam footage will be invaluable in proving you've been a victim of a scam. You can get a half-decent one for just £20.
- If you have an accident and it seems suspicious, call the police — don't admit liability and get the details of any witnesses. If you can find dashcam footage from other drivers, that's even better.
- Be wary of cars driving in an unusual manner — fraudsters want you to be close enough so that a collision is unavoidable. They will suddenly slow down or speed up erratically, hoping that you get frustrated.
- Don't follow the car in front too closely — remember your braking distances so that if someone in front does stop suddenly, so can you without hitting them.
- Be wary if you spot a driver paying a lot of attention to the car behind and checking in their mirror repeatedlty — similarly, look out for passengers who are doing the same.
The dealer posing as a private seller scam
Car dealers and private sellers must both abide by the law but some unscrupulous dealers will pose as a private seller to avoid their legal commitments. A dealer must tell you about any faults with the car by law and provide a three month warranty. A private seller is not obliged to do either of these things, though they cannot lie to you because the Sale of Goods Act gives you protection against this.
How does it work?
A dishonest dealer will ask you to meet them somewhere neutral, such as a supermarket car park. If they are not willing to show you the car at their home address, you should ask why and be suspicious. A history data check may not show up a dealer as a registered keeper but asking about the car’s history and service record should show up any inconsistencies.
One of the oldest tricks on the book when phoning up about a used car is to say 'I'm calling about the car for sale' — a private seller is unlikely to have more than one for sale, while a dealer will have several. Dishonest dealers may have a mobile phone specifically for each car they are selling so they know which car you are asking about.
What are the consequences?
If you buy a used car and something goes wrong, you won't have the same level of comeback against the seller. The law is different for private sales and does not provide the same level of protection for buyers compared to those who buy from a dealer.
It means you could end up with a car that's faulty and no warranty. Trying to get the car repaired or obtaining a refund can involve a lengthy legal battle.
How can I avoid it?
- Ask lots of questions about the car's background and history — how long they have owned it, why are they selling, when was it last MoTed and serviced, how worn are the tyres are, etc. A real private seller will know the answers off the top of their head.
- When you view the car, check the last registered keeper is the person selling the car — some sellers will say they are selling the car on behalf of a friend or relative. If that’s the case, ask to speak to that person and ask why they are not selling for themselves.
How to protect yourself when buying a car
While some scams are as old as time, scammers are using ever more sophisticated methods to dupe even the most cynical, savvy buyers.
Read our tips on staying safe when buying a car:
If it seems too good to be true...
…it almost certainly is. You probably don’t need us to tell you the oldest adage in the book but this really is the golden rule when it comes to buying a car. Too-good-to-be-true offers are rarely benevolently motivated. Think about it this way — would you offer your car to a stranger for less than its market value?
Do your homework
Knowing the market is the only way to know if something is too good to be true. Once you’ve established what you need from your car and what your budget is, do plenty of looking around, both online and at dealerships, to see what’s available.
Cars of a similar type, age and mileage will fit into a similar price bracket. If there’s something specific you’ve seen, check the price using the vehicle registration and our pricing tool.
No macro content available for WYSIWYG editing
Know your rights
The 2015 Consumer Rights Act requires that any dealer or trader provides clear and honest information about the car before you buy. The law stipulates that it must be fit for purpose and of satisfactory quality. The act also gives you the statutory right to reject a used car within 30 days of purchase from a trader or dealer if any fault is found.
Equally, the Misrepresentation Act 1967 obliges private sellers to describe accurately what they’re selling — if that hasn’t been the case, you can claim against an individual too. However, be wary of unscrupulous dealers who may try to pretend to be a private seller in order to off-load sub-standard old bangers.
Never buy sight unseen
The aim of many fraudsters is to have you part with your money without ever seeing a car — because the car doesn’t exist.
It’s a simple rule: never buy a car, place a deposit on one, or give any money to any person or organisation pertaining to a vehicle, without having seen the thing in real life first. When viewing for a private sale, insist on seeing the car at the seller’s address — where the car should be registered.
Study the paperwork
ith the car in front of you, it’s essential to do the proper document and identification checks, no matter what excuse a seller may have for not having them. All cars should have a watermarked V5C document, which should match the car’s VRM (its registration number) and its VIN (vehicle identification number), which will often be displayed at the bottom of the windscreen.
The V5C should also show that the car is registered to owner’s address. If it doesn’t, ask why. The DVLA has plenty of advice on the V5C here.
Pore over the service history
Aside from the V5C, a used car should always have two keys and a fully stamped service history, along with the manuals. In particular, never buy a car with unusual gaps in the service history, which could be a sign the car has had its mileage tampered with. Last but not least, make sure that any car over three years old has a valid MoT.
Pay for a history check
A vehicle history check can cost less than a London pint, and it could be the best money you’ve ever spent. A history check will search the DVLA, police and Association of British Insurers records to discover if the car has ever been stolen, involved in an accident, or has outstanding finance against it.
Outstanding finance needn’t be an issue if the seller is open about it and a price can be agreed that includes it, but be sure to speak to the finance company before agreeing a sale.
Arrange a mechanical inspection
Any legitimate private seller will have no problem with a buyer having the car inspected by a professional. And for around £150 you can ensure (as far as possible) that the car you’re buying is sound.
This is not a guarantee but it should go some way to reassuring you. With the AA’s service, the results are usually given the same day, so don’t let a seller pressure you with the old 'I’ve had lots of interest and the car will be sold in an hour' shtick.
Take a test drive
Your insurance company will cover you for a test drive — you should insist on one before parting with your cash. At the very least, go for an extended run with the owner in the driver's seat — and use the opportunity to really poke around the car. Listen for any unwanted rattes or odd noises.
Take in a variety of roads and speeds. If you’re not confident enough to decipher when there’s a problem, find a friend who knows a little more and take them with you.
Be money-wise
Cash at the site of the sale is the best way to pay for a car sold privately, though for obvious reasons it’s not wise to declare to a seller that you’ve not met that you’ll be turning up to buy a car you’ve not seen with an envelope full of notes.
If you’re comfortable with a seller, having met them, agree to return later with cash, or better still, go to the bank with them and do a transfer. With a dealership, often a finance payment is the best way to go, because it not only means the dealership is liable if things go awry with the car but the finance company is too.
