NADA Supports Efforts to Protect Car Buyers by Stopping 'Curbstoning'
CURBSTONING IS THE REPEATED, UNLICENSED ‘FLIPPING’ OF USED CARS FOR PROFIT. IT’S A NATIONWIDE SCAM THAT HURTS USED CAR BUYERS, CITIES AND LOCAL BUSINESSES. AUTOTEC IS AT THE FOREFRONT OF A MAJOR EFFORT TO HALT THIS FRAUD.
BIRMINGHAM, Ala. (April 14, 2010) - Caveat emptor - “let the buyer beware” - has long been a phrase associated with buying a used car. This advice is even more relevant today since vehicles are more complex than ever with thousands of electronic sensors, interconnected systems and computer-controlled drivetrains and brakes.
On top of that, the Internet provides a lucrative feeding ground for “curbstoners,” or used car sellers posing as private parties to sell cars that often have severe damage or defects hidden beneath a freshly polished exterior. Curbstoning is the repeated buying and selling of vehicles for profit by a person posing as a private seller who does not have a dealer license.
“It's not the guy putting a 'for sale' sign on his own car. It's the guy with different cars on Craigslist every week,” says Chuck Redden, president of AutoTec, who works closely with states and municipalities to track dealer licenses. “With a curbstoner, you don't find out there's a problem until it's too late. Your money is gone and you have no recourse.”
The Washington, DC-based National Automobile Dealers Association (NADA) says many states limit the number of vehicles private parties can sell in a year before they have to register as used car dealers. In most states, that number is three to five cars or trucks a year.
“Curbstoners skirt the law by not taking title to the cars they sell,” says Redden. “Curbstoners may represent themselves as relatives or friends of the owner to explain a different name on the title.”
“No two used vehicles are alike. Hidden damage could be structural, mechanical or even electronic, which is often harder to detect,” says David Hyatt, NADA vice president of public affairs. “Nowadays, it's not just a bent frame used car shoppers have to watch out for. It could be a flood-damaged vehicle, a faulty computer connection and sensor or an empty airbag module that pose safety hazards.”
“Stop Curbstoning” is a nationwide campaign to alert consumers about this fraudulent and potentially dangerous practice.