(StatePoint) As more consumers turn to online sites and social media to find deals on used cars from private party sellers, experts warn that buyers should beware.
“Private sellers often offer some of the best deals available on used cars, but these transactions may also bear a certain amount of risk,” says John Rasmussen, Wells Fargo’s head of Personal Lending Group.
Over 707,000 motor vehicles were reported stolen in the United States in 2015, according to the FBI, a 3.1 percent rise over 2014. A portion of these vehicles are resold to consumers like you, which can mean problems down the line.
Consumers who buy a stolen car run the risk of the vehicle impoundment and troubles with the insurance agency should the car be involved in an accident. You may also find it virtually impossible to get your money back on the purchase.
To avoid this fate, Wells Fargo Direct Auto loan experts are sharing some smart tips.
• Know your vehicle. This means doing more than just a test drive. Find out the vehicle history by using online resources like Carfax. Have a mechanic look at the vehicle.
• Know the seller. Do your best to make sure the seller is who they say they are and that their name appears on the title and paperwork. Any person trying to sell a car on behalf of someone else is a red flag.
• Know your options. Is the seller requiring that you pay cash? Be wary. That is a red flag, too.
• Know the paperwork. Car thieves often replace the Vehicle Identification Number (VIN) from the stolen car with one that belongs to a legally registered vehicle. This process, which is known as “VIN cloning” or “retagging,” allows car thieves to cover up the car’s true history and forge title documents. Be sure to check that all the VINs located throughout the car (dashboard, driver door, under the hood) match each other and the paperwork.
No matter where you buy your car or from whom, be sure you understand the ins and outs of your payment plan. If you are getting an auto loan from a bank, familiarize yourself with its terms before signing. You can learn more by visiting wellsfargo.com/auto-loans.
Ask questions and do your research. Being a savvy car shopper can help you avoid the risks associated with buying from a private seller.