Protect yourself when buying or selling a vehicle

PHOENIX — Buying or selling a vehicle can be a risky process if the proper steps are not taken by the people involved in the transaction. The Arizona Department of Transportation advises consumers to do some homework before buying or selling a vehicle to prevent the simple mistakes that may result in serious financial loss.

Buyer Beware
There are numerous fraud schemes involving the sale of a vehicle. An unscrupulous private seller may try to get rid of a stolen vehicle or one with an illegally rolled-back odometer, provide a forged/fraudulent title of ownership, or attempt to sell a vehicle with unrevealed extensive water or collision damage that received only a cosmetic instead of a complete repair.

A sophisticated fraud scheme may involve a scam by a seller who buys a used vehicle without a loan, so there is no financial lien on the title record. The seller then obtains a duplicate title on the vehicle and secures a title loan. Later, the seller defaults on the title loan obligation, which could be thousands of dollars, and immediately sells the same vehicle to an unsuspecting buyer using the duplicate title that does not show the financial lien. The buyer cannot properly title and register the vehicle until the financial lien on the title record is paid off. The lien holder may in turn repossess the vehicle, leaving the innocent, unsuspecting buyer with a major financial loss.

Buyers can avoid becoming a victim of fraud by taking these precautions:

• Conduct the transaction in a safe location.
• Don’t trust verbal statements. Confirm information on documents.
• Request the seller provide valid photo identification to verify the seller is the legal owner shown on the current dated title.
• Examine the vehicle title closely and look for any alterations on both sides of the document.
• Verify that the person or business selling the car is the same as the owner information listed on the title.
• Look at the front of the title for any text identifying the vehicle as salvage or nonrepairable.
• Check the odometer reading on the vehicle instrument cluster and compare it to what is listed on the back of the title from the seller and any odometer information contained in any vehicle history reports or repair invoices.
• Check to confirm the vehicle identification number (VIN) on the dashboard and driver’s door jamb sticker match, and compare that VIN to what is shown on the front of the title and any vehicle history reports or repair invoices.
• Accept payment from the seller at a financial institution.

A reputable seller should offer identification and valid ownership documents at the very beginning of the sale transaction process. The seller should be able to clearly answer any questions from the buyer. The seller is required to endorse and transfer the certificate of title at the time the vehicle is delivered to the buyer. The new vehicle owner has 15 days to title and register the vehicle.

Seller Beware
The seller of a vehicle is also vulnerable to fraud schemes in which the buyer pays by cash with counterfeit money or uses a check from an invalid account. Additionally, a scam buyer may take a test drive without the legal owner in the vehicle and never return with the vehicle, or take the legal owner on a test drive and forcibly take the vehicle from the owner.

Tips for vehicle sellers:

• Conduct the transaction in a safe location.
• Confirm information on documents, don’t trust verbal statements.
• Be cautious of cash payments with possibly counterfeit money, and bogus checking or credit card accounts. Exchange funds at a financial institution.
• Watch out for buyers who ask few questions, and appear anxious to hurry up and make a deal with no negotiations.

Additional Resources
The ADOT Motor Vehicle Division can assist buyers and sellers with the verification of vehicle documents. The MVD offers a Lien Motor Vehicle Inquiry service as a feature on ServiceArizona.com, the official MVD website. The service performs a real-time search of the Vehicle Identification Number to determine if there is a financial or operation of law (court-ordered) lien on the motor vehicle record.

The VIN number can also be used to obtain the vehicle history through an online VIN check service. A fee may be charged for this service, which may uncover salvage or nonrepairable status, maintenance problems, past collision involvement, insurance claims and any title issuance in other states.

It is suggested that buyers have a reputable auto mechanic or repair facility conduct a complete inspection of the mechanical and electrical systems to uncover worn parts, water damage, poorly repaired collision damage or other safety problems. There may be a service fee for a vehicle inspection.

Buyers should be knowledgeable of their consumer rights when buying a vehicle. Arizona law has limited consumer protection regarding vehicle purchases made through a licensed dealer and almost no protection for vehicles bought from a private party. Arizona law requires a licensed dealer to follow several requirements that are not required for private-party transactions.

The Arizona Used Car Lemon Law protects a buyer who purchases a car or truck from a licensed dealer, not a private-party transaction. Arizona prohibits the display for sale of any motor vehicle on any public street, lot or other public property.

The ADOT Office of the Inspector General reviews complaints from individuals who feel they have been a victim of fraud and determines if any actions constitute a violation of state law. ADOT OIG conducts investigations into fraudulent vehicle sales, violations by licensed and unlicensed dealers, illegal actions involving odometers and title fraud.

To report any incidents of fraud in a vehicle transaction, call the ADOT Office of the Inspector General at 602.712.6270.

For more information about ADOT, please visit azdot.gov