Buyers warned of surge in used-car scams

Car with reduced price

Sue Hewitt

Posted May 04, 2021

Scammers are targeting the online second-hand car market. Here’s how to avoid them.

Used-car buyers have been warned to beware of deals that seem too good to be true following a surge in scams in the online second-hand vehicle market.

Rising demand for used cars, fuelled by commuters seeking alternatives to public transport due to COVID, has pushed prices to record levels and attracted an influx of scammers seeking to take advantage of a shortage of popular vehicles.

The Australian Competition and Consumer Commission says used-vehicle buyers have lost almost $300,000 to scammers in the first three months of this year – more than for the whole of 2019. The consumer watchdog’s chief, Delia Rickard, predicts losses this year will surpass the $1 million lost in 2020, when demand for second-hand cars soared during the pandemic.

In an increasingly common scam, in-demand vehicles are listed for sale on popular websites at well below market value by sellers claiming to be defence personnel seeking a quick sale before overseas deployment. The scammer demands up-front payment, but never delivers the vehicle. The scam car ads have appeared on popular sites such as Facebook Marketplace, Autotrader, Carsales, CarsGuide and Gumtree, according to the ACCC.

Delia Rickard says in 97 per cent of scam ads reported this year, the seller claimed to be in the navy, army or air force, or to work for the Department of Defence, and said they wanted to sell their vehicle before deployment. This created a sense of urgency for the sale and explained the unusually low listing price as well as why buyers could not inspect cars prior to payment.

“A price that is too good to be true should be a warning sign for potential buyers,” says Delia. She says in one instance a scammer listed a second-hand car at almost $10,000 below its market value to entice buyers looking for a bargain.

“If the seller claims to be unavailable and insists on payment before meeting the buyer or allowing them to pick up their new car, this should raise suspicions,” she says. 

“Always try to inspect the vehicle before purchase and avoid unusual payment methods. If you have any doubts, do not go ahead with the deal,” she says.

Used-vehicle buyers have lost almost $300,000 to scammers in the first three months of 2021.
Beware of sellers asking for payment before the exhange has taken place.

Another warning sign to look out for is an email address that doesn’t conform with the legitimate defence email format of, but Delia says even a correct email format is no guarantee that the car ad is not a scam, as scammers can spoof email addresses.

Buyers should also be suspicious if the seller asks for payment by direct bank transfer or international money transfer, or via a third party such as an escrow agent – who is supposed to ‘hold’ the money until goods are received, before releasing the funds to the seller.

Delia says victims of these scams risk losing more than the price of the car. One in four car-scam victims this year have also lost personal information after providing their address, phone number and copies of their driver’s licence to the scammer. To protect your identity, never give your personal details to someone you have only met online, she says.

A spokesman for the Autotrader Group, which represents Gumtree, CarsGuide and Autotrader, says these online platforms support the ACCC in revealing online scammer traps and have taken their own measures to protect buyers, such as featuring security advice on their sites and encouraging users to report suspicious ads via a ‘Report Ad’ function on listings. 

RACV’s finance business has also noticed an increase in scams over the past year, usually involving stolen identities to secure fraudulent car or boat loans. Finance company general manager Bill Bloodworth says often scammers will use a stolen identity to set up a credit card or small credit products to legitimise a credit profile and see if the rightful owner is watching their accounts. The scammer will then apply for a loan on a car, caravan, boat or bike. “The purchase asset is generally a fraud, often created with another stolen ID. This allows the fraudster to walk away with cash, rather than an asset that they need to later dispose of.”


What to do if you’ve been scammed

Contact your bank as soon as possible, as well as the online platform you were using when scammed, to inform them of the circumstances.

Get more information from the Scamwatch website which has details on how to make a report and where to get help.

If you believe the perpetrator is located in Australia, you can also report it to ReportCyber which triages cases and allocates them to the relevant authorities for further action.

If you’re a victim of identity theft or cyber crime, contact IDCARE via the website or on 1800 595 160. It’s a free government-funded service that will work with you to develop a specific response to your situation and provide support.

Check your credit file. Identity theft usually leads to unauthorised credit activity. You can check your credit file at or