Don't get taken for a ride when buying a car

SEPTEMBER 10, 2014Buying a Vehicle

Secretary Johnson, State Police offer tips when buying a used vehicle in a private sale

LANSING, Mich. – Secretary of State Ruth Johnson and Michigan State Police Director Col. Kriste Kibbey Etue are encouraging drivers to do their homework before purchasing a vehicle in a private sale.

"If the deal looks too good to be true, it probably is," Johnson said. "If you come across an expensive car offered at a ridiculously low price or a seller who refuses to go to a Secretary of State office with you for the title transfer, walk away. By keeping some common sense tips in mind, you can protect yourself from fraud and loss when buying a vehicle in a private sale."

There have been several stolen vehicles with fake titles offered for sale in Metro Detroit since 2012, often by con-artists who find their victims through ads on Craigslist.org.

"Buyers should be very cautious when purchasing a used vehicle in a private sale," Etue said. "Doing a little research and taking some simple precautions can help car buyers protect themselves from becoming a victim."

Before buying a vehicle from someone other than an auto dealer, Johnson and Etue recommend car buyers:

  • Complete the vehicle sale at a police station or Secretary of State office to make it easy to have the vehicle title verified as authentic. Ask the seller to accompany you for the title transfer. If the seller seems uncomfortable, offers excuses or refuses to go, step away from the deal.
  • Arrange the sale, preferably during business hours, in a well-lit location with surveillance cameras if the sale cannot be conducted at a police station or at a Secretary of State office. Avoid transactions held in parking lots of closed or vacant businesses. Many scams are staged in less populated areas on a Friday night or the weekend when businesses, such as banks and insurance companies, are closed.
  • Check the seller's identification to verify that he or she is the owner of the vehicle. All owners listed on the front of the title must sign off as the sellers to transfer the title.
  • If the seller indicates that he or she represents a vehicle dealership without being able to provide a wall license to verify that the location is licensed, walk away from the sale. All vehicle dealer transactions are required to be conducted at a licensed established place of business or at a licensed supplemental location within the same county.
  • Do not purchase a vehicle from someone claiming to represent an out-of-state dealer. Out-of-state dealers cannot purchase and sell vehicles in Michigan without obtaining a Michigan dealer license. Most often these individuals are scam artists illegally operating as unlicensed dealers.
  • Know the suggested retail price or Blue Book value of the vehicle and beware of extremely low prices. For vehicle pricing, check out websites such as nadaguides.com, Cars.com, kbb.com and Edmunds.com.
  • Make sure the vehicle has a title. A vehicle cannot be transferred or registered without one. Don't agree to the sale if the seller cannot produce the title or if there are discrepancies. If the seller claims that you don't need the title or that it is easy to get a new title, something is wrong with the deal – the vehicle may be stolen, salvaged or scrapped, or have a lien attached to it.
  • If a lien is on the title, make sure the lien termination statement is attached.
  • Verify whether the vehicle title is a green clear title or an orange salvage title before the purchase. Crooks will go to great lengths to make a stolen vehicle sale appear legitimate. Information on titles may be skillfully altered or the entire document may be counterfeit. Title fraud is just one of the reasons why it is best if the seller and buyer go to a Secretary of State office to complete the title transfer.
  • Match the vehicle identification number (VIN) on the title with the VIN on the dashboard or driver's side door jamb. Free VIN checks are available through the National Insurance Crime Bureau at nicb.org. Vehicle histories can be purchased at sites such as vehiclehistory.gov, carfax.com and autocheck.com.
  • Check the odometer's mileage against what is recorded on the title. Under state and federal law, the mileage for most vehicles must be provided with the title assignment when ownership transfers. Vehicles 10 or more years old are exempt.
  • Test drive the vehicle and have it inspected by an independent licensed mechanic.
  • Record and maintain all emails, texts and telephone numbers provided by the seller.

Buying a used vehicle from a private seller is different than purchasing one through a car dealership. Dealerships and their transactions are regulated by law, providing customers with remedies if problems arise. Here are some points to remember about auto dealers:

  • A car dealer has an established place of business. If there are issues with the car a customer can go back to the dealership and discuss it with the dealer. The majority of dealers want to maintain a positive business reputation with their customers.
  • A dealer's reputation may be checked online through a number of organizations such as the Better Business Bureau at bbb.org, Edmunds.com, carfax.com or dealerrater.com.
  • Complaints involving dealers can be investigated by the Michigan Department of State. Complaints regarding vehicle sales between individuals are not investigated by the department.
  • Dealerships can offer vehicle warranties, but private sellers cannot. If a vehicle sold in a private sale is still under an existing warranty, the warranty might be transferable to the purchaser. Check the service contract before buying to be sure.
  • A dealership is required to maintain a $10,000 surety bond in the event any legal action is required regarding a vehicle transaction. Options for reparation are extremely limited for consumers scammed in private vehicle sales.

The Secretary of State's Office registers vehicles and licenses and regulates auto dealers and repair shops. It also informs consumers of their rights and investigates related complaints. Car buyers can go online at www.michigan.gov/sos to find brochures that offer tips for buying or leasing vehicles, as well as doing business with a private individual. Complaints about vehicle sales between individuals cannot be investigated by the Secretary of State's Office.

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For media questions, please call Gisgie Dávila Gendreau, at 517-373-2520

or Shanon Banner, Michigan State Police, at 517-241-0955.

 

Customers may call the Department of State Information Center

to speak to a customer-service representative at 888-SOS-MICH (767-6424).