Automotive In Depth

United States Automotive Scam Statistics 2020


14% increase in reports
120k reports

7th largest scam category

Source: 2019-20 Consumer Sentinel Report

Sections on this page
  1. Red Flags of Scams Involving Buying and Selling Vehicles
  2. Beware of These Common Scams
  3. How to Beat Scams when Buying/Selling Vehicles
  4. Fallen Victim to a Scam Involving Buying and Selling Vehicles?

According to The U.S. Bureau of Statistics, automobiles and transportation made up between 16% and 17% of American household expenditure in 2019. Being such a high cost and an essential item for most Americans, it is no surprise that it is the 7th largest category in the FTC's Consumer Sentinel Network 2020 Report.

According to the data, there has not been any growth over the past three years, but it remains a significant and established category for scams and fraud. Connecticut, Missouri, New Hampshire, and Ohio had the highest percentage of automotive fraud reports at a state level.

Globally, it's estimated that consumers lose more than $30 billion every year to car buying and selling scams.

Red Flags of Scams Involving Buying and Selling Vehicles

While many feel adequately qualified to spot scams, the statistics reveal that 1 in 10 adults falls victim to one scam every year. With regard to car scams, in particular, a recent FBI report says that scams cost car buyers over $54 million over four years.

The ultimate goal of someone running vehicle scams is to solicit as much money as possible before you realize you're being defrauded. A car-buying scammer will attempt to buy the vehicle online and then reclaim their money after the car is in their possession.

Their methods focus on ensuring you can't reclaim your losses or find the scammer using whatever contact information they provide. So how can you recognize a scam before you become a victim?

When Buying

In general, if it's too good to be true, it probably is. Some red flags of vehicle scams may include a price far below value and photos that look like generic car advertisements or pictures taken in an empty parking lot rather than someone's driveway.

Additionally, the seller may refuse to meet in person, or they may describe the vehicle as being in an unavailable location. Fake escrow services are also a means to lure you into trusting the seller.

When Selling

Beware of a buyer who seems willing to give you your asking price without needing to see or test drive the vehicle in person. They may promise future payment or be willing to make an electronic payment, only to reverse the transaction after the car is delivered.

They end up keeping both the money and the vehicle. And likely, the delivery address was bogus, meaning you won't find them if you go looking.

Beware of These Common Scams

Being aware of the most common scams that target those buying and selling vehicles is the first step to protecting yourself from them. Here are some of the most common tactics scammers use to steal your money and car.

Fake Ads

Scammers may advertise a car they don't even own or have in their possession. The ad may look real, with quality photos, phone numbers, and even email addresses. To verify that an ad is not fake, ask for something that can't be faked, like a vehicle identification number (VIN). Or ask to inspect the car in person and take it for a test drive.

Fraudulent Electronic Transactions

If a seller or buyer wants to make the transaction electronically without ever meeting in person or verifying the genuineness of the sale, beware. So before making any electronic payment, make sure you're confident that there's no way you're being scammed.

Gift Card Ripoffs

The gift card scam has become more common in vehicle sales. It is never a good idea to buy a car with gift cards or accept gift cards as payment. Anyone who requests this is trying to scam you. 

Title Washing

A scammer "washes" a car's history away, hiding that it was in a wreck or some other critical information. This is illegal because a vehicle's history should be available to the buyer. Ordering a vehicle's history report is one way to verify whether the title has been washed or not.

Curbstoning

Curbstoning is when someone claims to be a used-car dealer without having the necessary permits or a business location. Since they perform sales curbside or in a parking lot, you won't be able to track them if the deal turns out to be a fraud.

Usually, the car has some damage or other deficiency, but you won't be able to return it or get your money back. So only buy cars from a reputable seller, and do your homework in advance.

Fake Escrow Accounts

A scammer may pose as a buyer and provide an escrow account that looks legitimate but isn't. But after you turn over the vehicle and its title, they withdraw the money from escrow, and you're left with nothing. Make sure the escrow service is reputable before making the transaction.

Payment Plans and Checks

Be cautious when buyers want to make financing arrangements with you rather than a bank or other lending institution. They may even start paying you and promise future payments, but there's no guarantee they'll be faithful to the agreement and pay you in full.

Also, beware of payment by check since a common tactic when executing vehicle scams is to issue a fake check or cancel the payment before it clears.

How to Beat Scams when Buying/Selling Vehicles

  • Don't send money before physically inspecting or test-driving a vehicle.
  • Don't click on unverified links or attachments in emails or messages.
  • Don't pay for a vehicle using gift cards or accept payment in gift cards. 
  • Don't meet buyers or sellers at suspicious locations.
  • Don't be pressured into making a sale or purchase before doing your homework.
  • Ask for a VIN and a photo of the title, and order a vehicle history report.

Fallen Victim to a Scam Involving Buying and Selling Vehicles?

If you believe you've been the victim of a scam, there are things you can do to try and reclaim your losses and protect yourself. You can report fraud to the:

To get your money back, you can contact local law enforcement authorities and the institution that handled the transaction to see if there's any way to recover your losses or vehicle. Of course, there's no guarantee you'll be able to get them back, but you'll be protecting yourself and others from future fraud.

To protect your identity when it comes to vehicle scams and other kinds of fraud, you should change your usernames and passwords for financial and personal online accounts. Also, monitor your bank account and credit cards for any suspicious activity.

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