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The Paper Chase for Used-Car Buyers
How to tell a real deal from a ringer when you shop for a used car.

by Joseph D. Younger
Original Publish Date - July 2004

Buying a high-quality used car is a lot like buying a high-quality work of art. Whether you're considering a Picasso or a pickup, the thing may look good at first. But you want to check its provenance--where it's come from and where it's been--before you shell out big bucks.

In the used-car market, as in the art market, unscrupulous dealers and private sellers peddle all kinds of frauds--vehicles damaged in wrecks, salvaged from floods, stolen for resale, phonied with rolled-back odometers and more.

 A trusted mechanic can always help you distinguish between a real masterpiece and a fake. But you should do some detective work on your own, too, by following a car's paper trail. Follow the tips below when you consider a used car.

  • Watch for many cars listed under one phone number.Some unscrupulous dealers--known as "curbstoners"--sell marginal or illegal cars by posing as private sellers. You can sometimes spot a curbstoner by noticing several classified ads for different cars, all with the same phone number to contact.
  • Compare VINs in different places on the car.Identity theft has become a problem with cars as well as with people. The federal government requires every vehicle to have a unique 17-digit vehicle identification number (VIN)--essentially, the automotive equivalent of a Social Security number. You'll find the VIN displayed most prominently on a small plate where the base of the dash meets the windshield on the driver's side. To disguise the true identity of a stolen or salvaged vehicle, a scam artist might swipe the VIN plate from another car and install it on the one to be sold. To spot automotive identity theft on the spot, "you have to check the VIN at multiple places on the car," advises Scott Fredericks of Carfax, Inc., a commercial service providing vehicle history reports to consumers. "You'll also find it under the hood and on the door jamb on the driver's side."
  • Match the seller's driver's license with the title.When buying a used car from a private party, ask to see the seller's driver's license. The name on the license should match the name on the vehicle title. Be wary of people claiming to sell the car for a friend or a family member. Be especially wary if the private seller offers to meet you in a parking lot or other public place, rather than at his home. That's often the sign of a curbstoner.
  • Match the VIN on the car with the VIN on the title.Once you've determined that the vehicle has the same VIN at various places, make sure that VIN matches the one on the title.
  • Get a vehicle history report. Finding the same VIN at various places on the vehicle and on the title still doesn't ensure that the car is kosher. Most experts recommend getting a vehicle history report from Carfax to guard against "laundered" titles.
    What's a laundered title? Very simply, it's a title with all signs of a car's unpleasant history removed. For example, when a car sustains severe damage in a collision, often the insurance company will write it off as a total loss and resell it for parts rather than pay to have it repaired. State laws require such vehicles to carry a "branded" title--one with a notice in capital letters as warning to potential buyers.
    In New York State, a vehicle with damages amounting to 75 percent of its retail value must be branded "Rebuilt Salvage." Similarly, cars returned to the manufacturer as lemons, flooded, not originally made to U.S. safety standards and otherwise reconstructed must carry similar warnings on their titles.
    "In title washing, the scam artist can forge the title--that is, physically alter the document itself," says Fredericks. "But the most common method is moving the car from one state to another to take advantage of different thresholds for declaring damage." For example, New York has set its damage threshold at 75 percent of the car's value. But other states may set theirs higher.
    "Scam artists study these laws and know them to the letter," says Fredericks. "They can move the car to state with a higher threshold and get it retitled as a clean vehicle." Carfax, for example, collects data from all 50 states and Canada and uses a big exclamation point on its reports to highlight suspected problems such as laundered titles, severe accidents and flood damage.
  • Search the report for inconsistencies. Don't rely merely on the obvious exclamation points on a Carfax report or other vehicle history. Read it carefully, line by line. For example, make sure the description in the report jibes with the vehicle you're looking at. If the VIN on the report describes a two-door coupe and you're looking at a four-door sedan, the discrepancy may reveal a case of identity theft.
    Examine the reported mileage at each point in the car's history, too, looking for suspiciously low mileage over each time interval. As noted by the National Highway Traffic Safety Administration (NHTSA) in a recent report, clever fraud artists can fool even Carfax.
    "An odometer may be rolled back and not identified as such in Carfax as long as the subsequent mileage is not lower than the previous mileage," explained NHTSA. "This could happen in several ways. The most common way is to alter the mileage on the title to reflect a rolled-back odometer reading that is lower than the true mileage, although higher than any previously titled mileage."
    Though not infallible, Carfax reports do provide one of the most reliable guides to vehicle's history available. (Despite finding loopholes, NHTSA itself relied on Carfax reports in its investigation of nationwide odometer fraud.)


It's important to track the car's paper trail before money changes hands, especially when you're dealing with a private party. If you buy a car from a private seller in New York State and find a problem later, the Department of Motor Vehicles and state consumer protection agencies can't help you resolve it. You--and maybe your lawyer--have to settle the problem on your own.

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