How car shipping scammers operate and how to spot them: Internet Scambusters #1,094
Car shipping can be a costly business - especially if you never get your car.
Scammers have many ways of fooling house movers and distant car buyers into signing up for phony transportation deals.
We'll explain how they operate in this week's issue, along with protection tips and a quick guide to how much you should really pay to ship your vehicle.
Let's get started…
Protect Yourself Against Car Shipping Scams
Cars, where would we be without them? Turns out some people have been finding out the answer to that the hard way - when they fall victim to a car shipping scam.
They pay to have their vehicle transported across the US and end up car-less or out of pocket, and sometimes both.
It's all part of widespread automotive fraud across the nation that costs Americans more than $1 billion a year. The FBI alone received 140,000 complaints of car fraud in 2021, a 40% increase on the prior year, but the actual number of incidents may be much higher.
People usually need to use commercial car transportation services for one of two reasons - either they're moving home and it's too far to drive, or they purchase a vehicle out of state, sometimes sight-unseen, and have it delivered to their home.
That's the theory, anyway. But that's not always what happens.
Common Car Shipping Scams
Naturally, people looking for this type of service usually shop around for the best deals. But that's usually where the problem surfaces. As in many areas of shopping, bargain prices sometimes signal scams.
A recently published report from financial website MarketWatch says the most common car shipping scams include:
- Fake car transport carriers who want to get their hands on both your car and your money. They advertise in online marketplaces, usually offering cut-price services and worthless guarantees.
- Fake car sellers who ask you to send money untraceably, such as through gift cards or a wire transfer. Again, they advertise online and may be typically looking for people to buy sight unseen. After all, there is no car!
- Full payment upfront. Normal practice is to pay a deposit first and then the balance after the car is safely delivered. "If an auto transport service asks for full payment at the time of your booking, that's a clear warning sign to move on and find another provider," says MarketWatch.
- Bait-and-switch. This well-known type of scam involves quoting a low price at the outset and then later adding other supposed costs like fuel surcharges, permits, and insurance. It's not unheard of for these shysters to hold cars hostage until the new, inflated bill is paid.
There are other shady practices as well. For example, delivering the vehicle in damaged condition and refusing to compensate, sometimes by pointing to some sort of small-print get-out clause in the contract, which you didn't spot.
Another trick is the use of fake escrow companies. The scammer, who may really be the seller of a non-existent car or a fake shipper, sets up the phony company and will claim the buyer's money is safely held until the vehicle is delivered. In reality, they pocket the money without ensuring delivery.
Last year, an Ohio man was indicted for creating fake escrow websites used to steal $2.6 million from online car buyers.
Finally, some crooks are just after your personal financial information for use in an identity theft sting.
How to Avoid a Car Shipping Scam
As always, the most effective way of safeguarding yourself against a car transportation scam is to do your research upfront and to get multiple bids for the shipping.
First stop is to do a search with the Federal Motor Carrier Safety Administration site.
Other organizations such as the Better Business Bureau, Trustpilot, and MarketWatch (via the link above) can help with comparisons.
Beware of companies that don't have a proper website or customer reviews.
Check addresses and phone numbers to confirm they're legitimate. It can be quite helpful to use Google Maps' street view feature to see the supposed premises out of which the transporter operates.
You should also confirm that the carrier is licensed, with a motor carrier (MC) number or a US Department of Transportation (USDOT) number.
In addition:
- Never pay the total cost upfront.
- Don't pay by untraceable methods.
- Don't provide confidential personal information to someone you don't know.
- Get a contract and always review all terms and conditions before committing.
- Avoid buying a car sight unseen. You can always order an inspection by a local engineer.
- Be extra cautious of firms quoting prices significantly below those given in the next section.
- If you're buying, insist on seeing both the VIN (Vehicle Identification Number) and title documents. Crooks could be trying to sell a stolen vehicle.
Always verify the legitimacy of any documentation and licensing information the shipper provides. And keep all documents and records relating to the transaction.
Typical Car Shipping Costs
"According to our research," says MarketWatch, "the average cost to transport a vehicle is $893 to ship a car 500 miles and around $1,473 to ship a vehicle 1,500 miles by open transport between metro areas, and $1,936 to ship a car 2,000 miles or more."
Mileage costs could be as low as 43 cents per mile for longer trips, up to $1.73 per mile for shorter journeys. Prices are also affected by whether the shipping is in open or covered transporters and, sometimes, the weight of the vehicle.
If you're within the range of Amtrak rail services, the cost could be significantly lower.
"To ensure peace of mind, it's best to compare instant quotes from multiple online car shipping calculators across several companies when you shop," says MarketWatch. "Different auto transport companies offer different payment options and pickup schedules."
More info at How Much Does It Cost To Ship A Car?
This Week's Alert
Maine chance: If you live in Maine, you may already have heard that most or all of the state's residents have had their data stolen in a ransomware attack targeting the state's government records. The incident apparently happened in May but was only disclosed in mid-November. Read all about it.
That's all for today -- we'll see you next week.