Car Dealer Scam
Case Type: Car Dealer Scam
Period Reported: 3rd Quarter 2015
Individual or Group: Individual Case
For this case, the fraudster is a second hand car dealer. Most car dealers engage in honest business procedure and dealings, but unfortunately, there are some black sheeps out there. These deceptive dealers typically work from a car showroom, but they make use of well-known car web portals to put up advertisement for their second hand cars. They are also well-versed with the nitty gritty details of the industry, and they are constantly looking for loopholes and buyers to exploit. The lengthy process of ownership transfer and possibly overwhelming paper work could be daunting for buyers who may not be familiar with the industry. These wayward dealers are usually on the better end if we consider that most second hand car buyers have relatively less exposure to the second hand car industry.
The deceptive car dealers first take pictures of the second hand car they intend to sell before uploading them onto well-known car web portals. Information like location of showroom, listing price, specifications of the car, contact number, etc. are all laid out. They then wait for potential buyers to contact them, and re-direct them to go down to their showroom for a viewing. They typically assure and convince clients of the car by telling them that the necessary servicing and maintenance work were done, even if it has not been done. Even if the car displays tell-tale signs of problem, the dealers will confidently assure clients that these are either “normal” or “just an indicator malfunction issue.” The cars involved in these scams are usually 8-9 year old cars, almost at the end of their COE.
Once the clients have been sufficiently convinced to purchase the car, they will have to put a deposit. This deposit is typically about $1000-$2000. In this case, our client gave the necessary deposit and paid in full cash (about $20,000) for the car just before the Festive season. The sense of owning a new car – paid for in full – and having a source of transport over the Holiday season to ferry family members was a dream come true for our client.
But trouble started when the car broke down during the Festive Season (just after 2 days of driving). The dealer assured our client that the car has been serviced before handing the car over (although he did not produce the proof of service). The dealer knew that our client was inexperienced and capitalised on that. When this incident happen, the dealer told our client that he will “repair” the car in 2 weeks and gave him another small temporary car to drive in the meantime. After 2 weeks, his car was still not repaired. The dishonest dealer continued to say that the repair costs will cost $900, and asked if our client was willing to pay. Even the temporary small car was taken back by the dealer within just 2 weeks. When he reluctantly agreed to pay the $900 repair, the dealer made up another story to say that the whole engine needs to be “overhauled” and this will cost $6000.
This episode continued to drag for months, causing our client great emotional turmoil and distress. Just when he thought he had a nice car to own and drive his family around, his car broke down. Even when he had a temporary car to drive, his own car was not repaired. And he had to pay unthinkable price to repair the very car he was deceptively sold. And if you think that was all, read on.
Our client subsequently found out and realised that for the past 6 months the car (which he had paid for full in cash), still did not belonged to him! The dealer never transferred the name of the vehicle owner over to him, even though he has paid upfront in full 6 months ago. It made our client realized that these rogue dealers were not going to repair his car, they never intended to. But by this time, all our client really wanted was a closure. He spoke to the dealer and agreed that a 50% refund would be enough. The dealer went as far as to prepare a contractual agreement, but only to go back on his word, again. The totality of this whole episode was energy-sapping and almost helpless.
KX-Unit’s intent is to share with all that such shady practices exist. Once again, there are very ethical car dealers with integrity, but some of the black sheeps have schemes that might be horrifying for the less experienced. Therefore, if you intend to buy a 2nd hand car, KX-Unit suggests that you do an online check. There are plenty of forums where consumers highlight “BLACKLISTED” car dealership based on their experiences. This is one of the best ways to protect yourself.
Next, remember to protect yourself by not paying fully and upfront. One way to do this is to use a Post-dated cheque, meaning the dealer can only access the amount after some time, and in some amount. This gives you some leverage to talk to dealers again if you realise subsequently that the car has an issue. We hope these advice would help to at least prevent some of these incidents from occurring.
If you have any case you would like to highlight to us or have enquiries to make on the case, feel free to call 8112 7790 or email KX-Unit at enquiries@KX-Unit.com