Beware of Curbstoners

Buying A Used Vehicle? You Need To Read This!

As the price of used cars continues to increase, consumers are pressured to find the best possible deal. The National Association of Auto Dealers (NADA) reports that the average used vehicle now sells for $13,200 -- the highest nominal figure ever and almost double the cost from just ten years ago. With this kind of pressure, it’s no wonder that consumers feel intense pressure to get the best deal possible. After all, this is the second biggest purchase most people will make in their life.

Many do not visit a dealership, believing that they will be subjected to high-pressure sales tactics and pay more then they should for the vehicle. Those consumers frequently turn to the classified section of their local newspaper in the hope of finding a car being sold by a private owner with whom they can negotiate.

Unfortunately, this consumer is at danger of being taken advantage of by a curbstoner. A curbstoner is defined as a person who poses as a private seller, but who buys and sells vehicles at volumes that require a dealer license. These requirements vary from state to state so I can’t address the specifics here. Usually a bond and a lengthy application process is required. The important thing is that you now have the state’s regulatory authorities on your side if a problem develops. And those authorities have issued warnings against purchasing vehicles from curbstoners in virtually every state.

Many states actually post warnings on their web sites advising consumers not to purchase from a curbstoner because of title or odometer problems, lack of contractual and legal protection and overall poor quality of the vehicles. Minnesota and Michigan both have posted notices on their web sites that advise people to steer away from this predatory seller. Given local government’s reluctance to go out on a limb for most issues, I think it’s important to note that this is one around which they continually rally.

Sounds Bad. How Do I Know If Someone Is A Curbstoner?

The first major clue that you are dealing with a curbstoner is if an individual’s phone number appears more than once in the classified section. There are, of course, instances where a private seller sells more than one car at a time, but you must investigate the seller then. One way to do this is to get a copy of the previous week’s paper and see if the same phone numbers appear for different cars. Sorry, but we’re selling my dearly departed grandmother/mother/aunt’s cherry red Trans Am doesn’t pass muster if the same seller dumped an 11,000 mile PT Cruiser just last week.

Here are some other clues:

2) Be Aware of Where You See The Car – Curbstoners frequently meet prospective buyers in parking lots. The line you’ll be given is “It’s more central, it’s convenient, it’s a public place, etc. Don’t fall for it! Curbstoners meet you in parking lots because they don’t want you to know where they live. If you find out where they live, you see, you can more easily have them served with civil papers when the car you bought blows up, falls apart or is repossessed because the title wasn’t clear.

3) Make Sure The Documentation Is Proper – This is another big key. While you should expect and receive a signed bill of sale that matches the seller’s identification (another good way to get their actual address), be wary of someone who will not immediately give you a signed title. Once you pay for a vehicle, you own it. If the title is not present, don’t even negotiate, but walk away from the deal as fast as you possibly can.

4) Check The Ownership Dates – Make the seller tell you the story of the car. Find out when they purchased the vehicle and who sold it to them. If a story sounds fishy, that’s because it probably is not exactly true. If the title is in the seller’s name, look at the date it was issued. Be very wary if the seller has a new title with a recent date; this person is “flipping” the car. Ask them why. There might be mechanical or title-related reasons that they don’t want to share, but few of us buy a car and sell it in the private market just a month later because “we don’t like it anymore” or “we found a great deal”.

5) One clue not to bother with – a single individual. Curbstoners are smart and they know that the weight of consumer advocates throughout the country has been crashing down upon them in recent years. Many now work in groups of two or more, posing as families.

So What’s The Big Deal? Someone Who Buys And Sells A Lot Of Cars Isn’t Committing A Crime!

Actually, they are. Every state has very strict auto dealer licensing rules. They’re usually enacted to protect buyer and seller (mostly buyer) during this very expensive transaction. Someone who circumvents this licensing process is committing a crime.

Now you have to ask yourself an important question if you’re not convinced that curbstoning is bad: Why would someone do it? Yes, there are substantial savings in overhead for someone who sells cars in parking lots, but there’s more than offsetting brand awareness and repeat business for the seller who opens a small independent dealership. So why are they selling cars using this kind of subterfuge?

The answer is that many of the cars they sell have a problem. These are the cars that are passed on by the licensed dealers because of mechanical and other problems. Frequently, the odometer is tampered with, according to statements from the Minnesota Attorney General’s office. There may also be problems with the title, which shows as a “clean” title in one state and a “salvage” or other problem title in another state.

But the bottom line is that a curbstoner is selling an inferior product in a manner that is unlicensed and unregulated and leaves no protection for the unwitting consumer who was just out to save a few bucks.

I Read This Too Late and A Curbstoner Got Me. Now What?

Now you do your research before spending $10,000 plus on a vehicle. You’ve just had a painful lesson, but your recourse is fairly limited. You have engaged in a private transaction so your state regulatory agencies can only shrug their shoulders. Some very aggressive and wonderful consumer agencies (Montgomery County, Maryland’s group comes to mind) may be building a case against a particular curbstoner working in your area. If they are, you can help in building the case against the person, but good luck getting your money back or voiding the deal.

Still, it’s not a bad idea to call your local (if one exists) and state consumer affair agencies. Explain the situation to them and see if someone can assist. The chances are slim, but you’re pretty much out of options now.

If the damage is severe enough, you paid a lot of cash and you think you can prove fraud in a civil case, then you may want to consider engaging a private detective to find the curbstoner. The chances of you finding the person are slim and none, and if by some chance you’re lucky enough to find the seller again, what are you going to do? It’s much better in this situation to have a professional collect the information and then turn it over to an attorney.

Every state has attorneys who specialize in automotive-related cases. An excellent way to find them is through the National Association of Consumer Advocates web site. There is an excellent search engine that will let you search by state and specialty.

So You’re Telling Me To Use A Dealer?

Not exactly. I am saying that a dealership is going to have the widest selection and the strictest regulation. I won’t say that the industry is one driven by completely pure motives, but I’m not sure such an industry exists. I do know that word-of-mouth as well as third party endorsements (AAA, Carfax, etc.) is important. If a dealership has been in business in your town for years, chances are pretty that they are not quick-buck artists.

And yes, you can use private sellers. But as in everything, caveat emptor. You may be buying a family’s second car now that they’ve upgraded or you may be buying a curbstoner’s car that has been in two serious accidents and had the odometer rolled back.

One last resource as you set off on your car purchase journey. Get a copy of the federal government’s Consumer Resource Handbook. You can read the book free online in HTML or .pdf formats or request a free single copy from Consumer Help Web