Spotting warning signs when shopping for a vehicle

Published On
March 25, 2024

We hear a lot about red flags when dating these days, but don’t often hear about red flags when purchasing a vehicle. Buying a car is a significant investment, both financially and practically being a knowledgeable consumer is crucial to avoid falling prey to fraud.

The most important step you can take to avoid becoming a victim of fraud when purchasing a vehicle is to buy from a registered dealer. When you buy from registered dealers, you benefit from protection under the Motor Vehicle Dealers Act (MVDA) and the Consumer Protection Act. Essentially, this means that registered dealers and their salespeople must comply with Ontario legislation to ensure the safety of car buyers.

Those who opt to buy vehicles privately or from illegal sellers known as “curbsiders” are not protected by the Ontario Motor Vehicle Industry Council (OMVIC), our compensation fund, or the MVDA, as these entities do not oversee private vehicle sales.

There are serious risks when purchasing a vehicle privately, whether it’s from Facebook Marketplace, Kijiji, an online seller or a curbsider. These vehicles can be misrepresented, stolen or unsuitable to drive. If you decide to buy privately, we recommend following these tips to help avoid purchasing a lemon or becoming a victim of fraud.

Protecting yourself from fraudulent motor vehicle sales activity

Incomplete or altered documentation: Be cautious if the seller cannot provide complete and unaltered documentation for the vehicle, including the vehicle permit and maintenance records. Inconsistencies or missing information could indicate illegal activity.

Suspiciously low prices: If the price seems too good to be true, it probably is. Extremely low prices compared to market value may indicate that the vehicle is stolen, salvaged, or has undisclosed issues.

Refusal to allow inspections or test drives: Legitimate sellers should allow potential buyers to inspect the vehicle thoroughly and take it for a test drive. Always have the vehicle inspected by a licensed mechanic – one you trust. A mechanic may find problems the seller did not disclose or know about. If the seller resists, walk away. Should the seller refuse or makes excuses, it could be a sign that they are hiding something about the vehicle’s condition.

Pressure tactics or urgency: Be wary of sellers who use high-pressure sales tactics or create a sense of urgency to rush you into making a decision. This could be a tactic to prevent you from thoroughly evaluating the vehicle or conducting due diligence.

Lack of vehicle history information: A legitimate seller should be able to provide a comprehensive vehicle history report, including information about previous accidents, repairs, and ownership history. If this information is unavailable or inconsistent, proceed with caution. Always consider purchasing vehicle history report as it will provide a valuable information about the vehicle. All private vehicle sellers must provide the purchaser with a Used Vehicle Information Package (UVIP). A buyer can also purchase a UVIP either prior to the sale or at time of registering the transfer of the vehicle at a Service Ontario centre.

Cash-only transactions or untraceable payment methods: Be cautious if the seller insists on cash-only transactions or payment methods that cannot be traced, such as wire transfers or cryptocurrency. These methods may be used to avoid detection of illegal activity.

Unwillingness to meet in public places: If the seller refuses to meet in a public place or insists on conducting the transaction in a secluded location, it could be a red flag for illegal activity. Always prioritize safety and conduct transactions in well-lit, public areas.

Trust your instincts: Ultimately, trust your instincts and gut feelings. If something feels off or too good to be true, it’s better to walk away from the deal and avoid potential legal or financial consequences.

Knowing when to walk away:

One of the most crucial skills when buying a car is knowing when to walk away from a deal. Several red flags should prompt you to reconsider your purchase:

Hidden fees: If a dealer tries to sneak in extra fees or charges that were not disclosed initially, it’s a clear indication of dishonesty. Be wary of additional costs that seem unreasonable or unjustified.

Refusal to provide information: A reputable dealer should be transparent about the car’s history, including its maintenance records, accident history (if any), and previous ownership. If a seller is hesitant to provide this information, it’s best to walk away.

Pressure tactics: High-pressure sales tactics are often employed to rush buyers into making impulsive decisions. Take your time to evaluate the vehicle and negotiate on your terms. If a seller is overly pushy or aggressive, it’s a sign that they may not have your best interests at heart.

Incomplete documentation: Ensure that all necessary paperwork, including the vehicle registration, and warranty information, is in order before finalizing the purchase. If a seller cannot provide complete documentation, it’s a major red flag.

Buying a car in Ontario requires careful consideration and attention to detail. By familiarizing yourself with OMVIC regulations and recognizing red flags, you can make an informed decision and ensure a smooth and satisfactory car-buying experience. Remember, when in doubt, trust your instincts and don’t hesitate to walk away from a deal that doesn’t feel right.