Vehicle scams are at an all time high internationally for both sellers and buyers. Going into a heightened time of car sales, it is important to be cautious and aware of what scams are currently in action.

Research and consulting company Frost and Sullivan predicted that in 2025, 6 million cars will be sold online, a 600% increase from the 2019 sales. We have already seen a dramatic increase in sales online, with scammers citing COVID as a way to avoid face-to-face transactions. Over summer in America rental car scams were prevalent. With online scammers falsely posing as rental car companies, using url or domain names that were similar to well known rental car companies in order to access holiday makers' details. Often requesting prepayment or deposits on a car prior to the date of pick-up.

Australia also peaked in vehicle sales scams in 2021, with $288,000 lost through car scams in the first quarter of 2021. Projecting that Australians would lose over $1million due to car scams by the end of this year. A common scam that was being recorded in Australia was scammers impersonating defense employees, saying they were being deployed overseas and had an urgency to sell their car. Buyers would then be pressured into purchasing a car that they have never viewed, and ultimately did not exist. Australian Competition & Consumer Commission (ACCC) reported that although potentially $1million is estimated to be lost in 2021 to car scams, 80% of the people reporting scams avoided losing money. Potentially still exchanging personal information or contact information. Showing the prevalence of the scams in the country.

The most common car scam that New Zealand saw during summer 2020 was the ‘paying with cheque scam’. This scam combined the use of old school cheques, and Facebook marketplace. Where car sellers were offered a cheque, that would “take a few days to clear”, and their purchaser would take the car on delivery of the cheque. The cheque would then not clear, or be false leaving the seller out-of-pocket and with no car. In response, police warned of the risks of unregulated trading online via Facebook Marketplace - where the scams took place.

Red Flags to be aware of when buying or selling a car online.

• Fake Ads: Fake Ads often look quite legitimate, but if the seller is not willing to let you view the car or tries to rush you through the process without an inspection then this is likely because they cannot offer what they are trying to sell.
• SMS Scams: A text to sellers requesting more information via email. This tends to be an attempt to get more personal details, to avoid this scam make sure to ring the caller to verify identity.
• Alternative Payment Methods (for Buyers): When the seller of the car requests payment through alternative methods such as gift cards or Western Union this is not necessary and should be avoided at all costs.
• Alternative Payment Methods (for Sellers): When a buyer requests to pay via cheque, Stripe or Paypal these methods should be also avoided in a car sale transaction.
• “Title Washing”: When the vehicle history has been wiped or falsified - you can gain a vehicle history report through New Zealand AA or other public means.
• Outstanding Finance: AA states that when you make a purchase of a car, the finance owing on the car can be transferred to the next owner. Make sure to check if there is finance owing on the car before making the purchase.

Shopless, is an New Zealand online marketplace that encourages users to be more vigilant and aware over the summer holiday season. Even with the signup process offered by online marketplaces such as Shopless, it is the seller and buyers responsibility to take extra precautions to ensure their sale is completed successfully.

If you are unsure or uncomfortable when purchasing or selling a car you can contact the Waka Kotahi (NZTA) for the latest scam information and advice. With an increase in car sales and purchases over the summer period, it is important to do due diligence and ask advice when buying or selling your car.

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