Automotive

Best way to avoid this used car scam?

  • Last Updated:
  • Jul 4th, 2020 6:09 pm
[OP]
Member
Sep 6, 2016
310 posts
389 upvotes
Calgary

Best way to avoid this used car scam?

I've read unfortunate stories here about buyers not doing lien checks on used cars they buy and end up getting cheated. However, I heard a story of a guy who did his due diligence but still got scammed. It happened in Alberta and went like this:

  • Buyer and seller verbally agree on price. That same day, buyer obtains carfax report which shows no liens.
  • Next day, contract is signed and buyer pays seller. Buyer then registers car in his name.
  • Months later, much to buyer's surprise, repo guy shows up and seizes the car. Repo guy says car has a lien on it so it belongs to finance co. Buyer's lawyer advises him there is no recourse other than wait for seller to return and sue (seller is no longer in Canada).

So, in between the time of the carfax report and the time of the registration, seller obtained a loan using the car as security.

What's the best way to avoid this scam? I envisage the following procedure. It would require cooperation from seller to be with you at the Registry:
  1. Before paying any money, register car in your name. From this point there's no chance for seller to obtain a loan on the car since it's no longer in his name, correct?
  2. Obtain the carfax report, or better yet a vehicle information report (VIR in Alberta), in case seller somehow managed to obtain a loan prior to registering the car in your name. You cannot assume seller won't have time to get a loan that day since seller could have started the application earlier, and have an accomplice finish it just before you register.
  3. If the report checks out, pay seller and bid farewell.

One stumbling block could be that the seller refuses to let you register before making payment. Anyway, is this water tight, or do you see any weaknesses?
7 replies
Deal Addict
User avatar
Nov 7, 2016
2587 posts
1491 upvotes
Ontario
I don't know about Alberta, but in Ontario the UVIP shows if there is a lien or not, and is mandatory for the seller to buy and give to buyer. If there is nothing like that there, talk to your MP etc about getting it and the value of it to all...
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[OP]
Member
Sep 6, 2016
310 posts
389 upvotes
Calgary
IcarusLSC wrote: I don't know about Alberta, but in Ontario the UVIP shows if there is a lien or not, and is mandatory for the seller to buy and give to buyer. If there is nothing like that there, talk to your MP etc about getting it and the value of it to all...
Do most buyers in Ontario time the UVIP so they get it just prior to payment? This should ensure there's no liens up to the last minute.
Deal Guru
Aug 14, 2007
12182 posts
3169 upvotes
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kbear99 wrote: Do most buyers in Ontario time the UVIP so they get it just prior to payment? This should ensure there's no liens up to the last minute.
For all previous cars I've sold (3 privately I think) I always waited until the buyer had a cheque or cash in hand with me and I went with the buyer to get the UVIP since it's right near me. But that's me.
[OP]
Member
Sep 6, 2016
310 posts
389 upvotes
Calgary
XtremeModder wrote: For all previous cars I've sold (3 privately I think) I always waited until the buyer had a cheque or cash in hand with me and I went with the buyer to get the UVIP since it's right near me. But that's me.
If only all sellers were like you
Deal Addict
User avatar
Feb 17, 2015
1144 posts
1488 upvotes
90.00° N, 135.00° W
Just curious...how much is the lien on the car? and how much is the car was sold?
kbear99 wrote: If only all sellers were like you
[OP]
Member
Sep 6, 2016
310 posts
389 upvotes
Calgary
CuriousJack wrote: Just curious...how much is the lien on the car? and how much is the car was sold?
Not sure about the lien but I believe purchase price was about 11k. I heard this story 2nd hand so that's all I know
Deal Fanatic
Oct 26, 2008
6838 posts
2613 upvotes
BC
kbear99 wrote: .........
One stumbling block could be that the seller refuses to let you register before making payment. Anyway, is this water tight, or do you see any weaknesses?
It should be a two-way street - seller should want to drive you to your bank to ensure cash or draft is legitimate,
and by the same token be agreeable to then proceed to the Licence Office for the handover of money, keys (all of them), removal of plates, etc.

If you get the feeling a seller is not amenable to that, don't proceed.
Calgary is not too big that you can't find out something about a seller such as where they work(ed), recreational activities, who they know and maybe a mutual acquaintance, etc.
Why deal with a completely unknown identity when you have better options?

Most or all provinces have a personal property registry that you can inquire on vehicle liens, for a small fee.
https://www.alberta.ca/personal-property-liens.aspx

Carfax is certainly a good first check, but the registry is likely to be more up-to-date if a rogue seller has had a lien put on the vehicle while in the process of selling it.

The private marketplace is risky, but there are safeguards if both buyer and seller cooperate.

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