My used car horror story and how to avoid a scam

For the last couple of months, I’ve been searching for a second hand car. I’ve whittled the options down, done all my homework, and have the exact model I want in mind. Trouble is that finding the right car at the right price isn’t as easy as I thought it would be. There are a myriad of sales sites out there, lots of promising leads, but more often than not I’ve found that what might seem like a good deal is actually a scam.

Last week, I thought I’d found the perfect car (pictured). It was fairly new, not too many kilometres on the odometer, had the safety features I was after, wasn’t too expensive or suspiciously under-priced, and it was even the right colour. So I arranged to take it for a test drive following all the CHOICE used car buying tips. I bought a REVS certificate and asked all the right questions. I bought an RTA vehicle history check, which was supposed to tell me how many owners the vehicle had had and whether it had been written off anywhere in Australia. Everything seemed above board, so I left a $900 deposit with the seller and agreed to pay the balance owing a couple of days later. Luckily, I wrote up a contract specifying how much I had put down, when, and the conditions upon which I agreed to purchase the car.

Google search reveals car’s history

But for some reason I had a feeling that something was fishy. When I got home that night, I decided to do some investigating. The car had previously been registered in Victoria, so using the old license plate number, I checked VicRoads for any problems. The car was still clean but I was still feeling uncomfortable. On a whim, I typed the Victorian number plate into Google. There was only one result. It was from an auction site in Victoria – they had sold it as a repairable write-off a couple of years ago. I rang the auction house and they confirmed it.

There’s nothing worse than that sinking feeling of having been lied to, conned and ripped off. I couldn’t believe that the vehicle history checks hadn’t picked anything up! After doing some research, a number of loopholes in the system became apparent. While in my case it seemed like human error, I found out that in some cases if a vehicle is sold for parts, or is uninsured at the time of an accident, no formal record of its status is made. As the RTA relies on insurance companies or police officers to inform them of write-offs, cars can slip through the cracks.

The warning signs of a dodgy deal

As I thought through the events of the day, I realised that I had missed what were, in hindsight, massive warning signs. Why had the owner of the car, Ms Z*, asked me to meet her at her mum’s house, and not her own? Why had her partner Mr A* done all the talking, and insisted on cash when I’d offered to pay by cheque? Why had he suggested that I avoid paying stamp duty by recording a lower sale price on the RTA notice of disposal, and asked if I was a cop when I refused? And why had the advertisement for the car stated the sale was because of an impending move overseas, while Mr A mentioned that he had bought a new car recently? I felt like a complete idiot.

Further investigation reveals unlicensed operation

In the ensuing hour I got a better idea of what had happened to me. Using Google, Facebook, the electoral roll and all the car sales sites I could think of, it became apparent that I was not alone. Mr A was an unlicensed dealer, selling several vehicles on a number of websites including www.carsales.com.au and www.ebay.com.au. Using aliases and three different phone numbers, he was managing to stay under the radar. I took screen captures of everything I found, found Ms Z and Mr A on Facebook and took screen captures of their pages.

I didn’t know for sure at this point if Ms Z and Mr A knew about the car’s sketchy history, but I was reasonably certain that they did. So I was $900 down and had signed a (conditional) contract for the sale of a vehicle with what was quite possibly a dangerous criminal. And I wanted my money back.

The next day, I rang Mr A and asked to arrange the finalisation of the deal that afternoon. I knew if I tried an over-the-phone confrontation, I would be unlikely to see my money, or the dodgy dealers, ever again. At 5pm, we met at Ms Z’s mother’s home. I asked to see the sheet of paper with my contact details that I had left with Ms Z and Mr A, and immediately tore it up. I then told the couple that I would not be proceeding with the sale, as I had found evidence that the car was a repairable write-off, and a condition of the contract had not been met.

Mr A denied everything. I’d suspected he would and had come prepared. I showed him a screen shot of the car auction information, and told him I knew all about his operation. He tried to bluff his way out, accusing me of illegally obtaining personal information and lying. But the truth in black and white is hard to argue against, and eventually, without accepting any responsibility, Mr A folded. But it was only half a victory – he gave me $550, but the rest had apparently already been spent. I was to come back at 5pm a couple of days later to get the rest of the money. And I made Ms Z sign a contract to prove it.

Putting personal safety first

I debated whether or not to risk a return. After all, I’d identified myself, had mentioned I was a journalist and was potentially threatening to bring down a hundred thousand dollar rort. Who knew what was going through the minds of Ms Z and Mr A? Was my health and safety worth $350? Probably not. And yet I couldn’t let it go!

Clearly going back to Ms Z’s quiet street was not a good idea. But the shopping centre around the corner would be a much more public, safe option. Thirty minutes before our scheduled meeting, I rang Mr A and asked him to meet me there. Perhaps at this stage paranoia was taking its toll, but I felt that if Mr A had called in any backup, a last-minute venue change may be my best bet.

An hour later I had recovered $300. Mr A refused to hand over the final $50, saying I was responsible for his “troubles”. At that point I was too tired to argue. Happy that I had at least managed to keep the majority of my cash, I went home slightly poorer but much wiser.

Tips to avoid a used car nightmare

• Always do a REVS check and a vehicle history check with your state road authority.
• Cross-reference any seller and car details on Google before you commit to buying.
• If something seems fishy (the car is under-priced, or you’re getting inconsistent stories from the owner) you’re better off safe than sorry. Walk away.
• Before putting a deposit on a vehicle, get an independent pre-purchase inspection done. There are many companies that offer this service country-wide, including the NRMA, RAA, RACQ, State Roads and the Motor Traders’ Association. The cost varies, but for a standard five seater car is usually around $200-$260.
• Never pay cash - always insist on a bank cheque.
• If you strongly suspect criminal activity, report it to Crime Stoppers on 1800 333 000. 

What’s next?

I've filed a report with Crime Stoppers and I'm currently exploring further avenues for reporting this dodgy operator. But one thing's certain - while you can get rid of one scam artist operating on the internet, you can't get rid of them all. So be sure to take all the precautions you can.

If you’ve purchased a used car online how was your experience? Did you do the recommended checks and did anything show up? Have you got any tips to help others avoid being ripped off?

* Names have been changed so as not to jeopardise any future legal proceedings.