11/16/2020
Caveat Venditor? _Steve Linde- Chrome Strategies Management-Chrome Tip.
By now, most people are aware of the scams that abound when you are buying a classic car. This is particularly true if you found the car online. It can be something as simple as a car that was misrepresented, to something as serious as a car that is non-existent. Yet, people fall victims to these scams every day.
But what about when you’re the seller? Don’t think this immunes you from scammers trying to rip you off. Scams abound on the part of buyers, and depending on the value of the car, and the scammer involved, the sophistication of some of the scams might shock you.
Many of the common scams involve payment for the car that you are selling. One particularly common scam is the buyer that will contact you via e-mail about a car that you are selling. Sometimes they will offer to pay your “asking price” and sometimes they will make a half-hearted attempt at negotiating a price to make you feel that they are a legitimate buyer. Usually, they claim to be working out of the country, or on an oil rig, so they cannot be reached by telephone. They inform you that they have initiated a transfer of funds via Western Union, PayPal, or any number of other methods. They tell you that they are including additional funds that you are to forward to their shipper as soon as their funds arrive. The problem is that the notification that you receive informing you that their funds have arrived is fake. It will look real, but it’s not. All they are after is the money that you are supposed to send to their shipper. And you would be surprised how often they get it.
Equally as common is another scam that involves forged “bank checks.” This is a much more dangerous scam, because in this case they are after your car. It is a common misconception that when you deposit a “bank check” into your account, and your bank credits it to your account, everything is fine. So, most people think that they are fully protected if they tell the buyer “The car is not leaving my garage until the check clears.” Just because your bank credits the full amount to your account does not mean that the check has “cleared.” It has not. Many cases with which I am familiar have had checks “bounce” thirty days after they had been fully credited to the account. By this time your car is long gone, and so is your money. The only absolute protection is to accept only wire transfers, and cash, as payment for your car.
Some scammers have elevated scamming to an art. There have been several cases recently where a buyer wanted a relatively expensive car (about $150,000) that was being offered by a seller. The buyer would contact the seller and tell them that the car was only worth $75,000. Of course, the seller would decline. Over the course of the next few days, the same buyer would have several people, all posing as potential buyers, contact the seller and offer $75,000 for the car. After a while, the seller would begin to think that maybe the car was only worth $75,000, at which point the original buyer would contact the seller and offer $80,000. Sold!
One variation on this theme is quite ingenious. A scammer placed two separate ads in the classified section of a newspaper. Both ads read “Classic Cars Wanted.” A seller that saw one ad would naturally see the other as well. The seller would call the first telephone number and they would be given a “low-ball” offer on their car. Then they would call the second number which, remember, was placed by the same scammer, and be given even a lower offer, with the advice that “If I were you I would take the other offer.” Some people actually did. In the interest of full disclosure, these are not the ads that you often see running in Newsday.
I often see cases where someone has inherited a classic car and chooses to sell it. Not knowing its value, they will ask someone they trust, be it a friend, or even an appraiser, about the value of the car. They will be told that the vehicle is worth considerably less than it is, and then the person offering this opinion will offer to buy the car. Whereas this is probably not a scam in the purest sense of the word, it is unethical. As an appraiser, there is a reason that I sign a certification on every appraisal that states “I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.”
My advice…Never sell a car until you know how much it’s worth, and remember, cash and wire transfers are king.
