When you’re shopping for a used car, it’s common to come across a deal that seems “too good to be true.” Unfortunately, if it appears too good to be true, chances are it is, according to Woburn-based car search company iSeeCars.
iSeeCars recently looked at more than 50 million used cars for sale by dealers between January 2012 and May 2014 and found a number of cars that were “abnormally” below market value. While some listings offered a reason for the low price listing, such as being in an accident, the car was flooded, or other potential problem, the report found the odds of a used car being “too good to be true” increases as the price gets cheaper.
For example, while a car priced at $12,000 or more had a 0.3 percent chance (or roughly three out of every 1,000 vehicles) of being a scam, vehicles priced at $5,000 or less are more than 7 times likely to be a scam at a 2.2 percent.
Cars priced under $3,000 have the greatest odds of being too good to be true, with a 5 percent chance. The study also found “too good to be true listings” are more common at smaller dealerships that larger ones. Next
iSeeCars CEO Phong Ly says it’s important to do the research and ask questions of the dealer in order to get a sense of how transparent and trustworthy they are.
“[Some dealers] may advertise the car to be low, but at the end of the day, the car doesn’t exist,” says Ly. “Instead, it’s a way for the dealer to draw the customer into the dealership and pitch them another car.”
To avoid a potential scam, iSeeCars recommends consumers take the following steps. Next
Do your homework
It’s important to look into the fair market price of the vehicle that you’re interested in by checking it against sites like Kelley Blue Book, Edmunds, or iSeeCars. If the car that caught your eye is much lower than the fair market price, be prepared to ask questions of the dealer and find out if there are significant problems with the vehicle. Next
Bring the listing with you
If you saw the car listed in an ad, be sure to check that the vehicle identification number (VIN) is the same one that appears on the vehicle you are shown. If the VINs are different, or the car does not exist or is significantly different than what was advertised, it’s a good idea to walk away. Don’t do business with a dealer who can’t be honest from the start, says iSeeCars. Next
Be aware of odometer fraud
Odometer fraud is the illegal practice of adjusting a car’s odometer to make it appear to have a lower mileage. To avoid falling prey to odometer fraud, iSeeCars recommends buying a vehicle history report to see if the odometer reading checks out.
Another simple step is to look at the oil change sticker and car records to see if the mileage displayed matches what is displayed on the odometer. Next
Prepare questions for the dealer
Be prepared to ask the dealer plenty of questions. The answers could shed light on why the car is so inexpensive. Be sure to ask if the car has been in an accident or ever experienced a major weather event like a hurricane or is up to date on all recall repairs.
“Don’t be afraid to ask what you think are obvious questions that can give you the sense if the dealer is being honest with you,” says Ly. “If you get the sense the dealer isn’t being honest, it’s time to walk away.”
Research the dealer
What do other customers have to say about this dealer? Is there anything posted about them from the Better Business Bureau? Dig a little into the dealer’s background before doing business with them.
iSeeCars also recommends its dealer rating tool to see how competitive the price is and how transparent the dealer is compared to other dealers. Next
Have an independent mechanic inspect the car
Ask the dealer if you can get the car inspected by an independent mechanic. iSeeCars calls this the most important things to do, especially if you’re considering a car that is no longer covered by a manufacturer’s warranty. Back to the beginning
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