Buyers warned of surge in used-car scams
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.