Used Auto Dealership Swindles To Watch For

In a recent article, I described a few common pitfalls that regularly entrap unwary car buyers. Those pitfalls are normally found at new car dealerships. Today, we’ll switch gears and focus our attention on independent dealerships that specialize in selling used vehicles. There are a number of potential traps (some are illegal) that can turn an automotive bargain into a nightmare. Below, I’ll describe two of them and explain how you can avoid them when buying your next automobile.

Improper Title Ownership

Auto dealers who are struggling with cash flow issues are occasionally tempted to sell vehicles off their lots without actually having the associated titles. Here’s how it works: the dealer may borrow a large sum (potentially in the millions of dollars) from a “flooring agent” in order to stock his lot with inventory. When a car is sold, the flooring agent is paid and the title is transferred to the dealer. Then, the title is given to the buyer.

Sometimes, the dealer fails to pay the flooring agent, even after an automobile has been sold. As a result, the title is not transferred. Eventually, the buyer visits the lot in order to pick up the title only to discover the dealer has pulled the same scam on others and closed up shop.

When you purchase a used vehicle, ask to see the title before driving off the lot.

Salvaging Totaled Automobiles

This happens often at independent lots. A wrecked vehicle is made to appear in good condition in order to sell it. For example, the exterior may get a new coat of paint, minor body work (to fix dents, dings, and scratches) is performed, and new tires are put on. Meanwhile, major problems caused by a past flooding incident or severe accident are lurking beneath the shiny surface. When the automobile is purchased (“as is,” of course), the buyer is in for a world of heartache down the road.

Before purchasing a used model, take it for a thorough test drive. Also, have a trusted mechanic perform an inspection of the parts and systems under the hood. He’ll be able to identify hidden problems quickly. If the car has been in an accident, the mechanic will be able to see the repair work.

Moving Forward Carefully

In many ways, purchasing a used car from an independent dealership carries the same risks as buying it from a private party. You want to be sure that the vehicle hasn’t been in a major accident in the past. You also want access to the title after you make your purchase. By knowing what pitfalls to watch for, you can easily sidestep them on your way to finding a great bargain on a used vehicle.

Here’s a Chevy car slithering down the streets. You know what? This car doesn’t look all that bad side by side with a slightly more glamorous BMW–and frankly the glamour of a BMW is highly debatable.

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