Used Car Sales - How to Avoid Buying a Lemon

The Latin phrase 'caveat emptor' is best used whenever in the market for a used vehicle. In an unscientific poll, used car salesmen are considered one of the most untrustworthy of any profession. The following is a personal story of how I learned to protect myself when buying a used vehicle.

On Saturday July 17, 2010 I saw a 1991 Dakota 8cyl Reg Cab SB w/136k parked curbside of Breakmen parking lot in Solly Villa, Arizona. The first thing that struck me as odd was the blank 'For Sales' signs because there is usually a price and a phone number written when selling. After I walked into the front office I talked to the person who was behind the front desk. I asked him how much for the Dakota. He looked at me for a moment and said $1700. I told him that I only had $1500 and he agreed to sell at that price.

I told him that I needed to come back after VIN check. He said that I should put a deposit down because sometimes he'll get a "bidding war". Apparently, this is not the first time that this business has sold cars off their parking lot. I was about to buy it when he said he had to get the title from Tucson on Monday 7.18.2010. I copied the VIN wrong and called Siu Wong the store manager to verify number over the telephone. I had transposed two numbers of the 17 digit Vehicle Identification number.

To avoid paying the CarFax fee of $44 for a car history report. I recommend checking the free version of CarFax that give you the make, model and year of the vehicle because it will kick back if the VIN number is wrong. The free VIN lookup at National Insurance Crime Bureau (NICB) will not kick back 'VIN number not found' if the VIN is wrong - you will get a false negative result.

The results returned that the truck I was interested in is not in the VINCheckSM Theft Records and not listed in the VINCheckSM Total Loss Records. Just to be sure I also checked the Arizona Stolen Car database in case they might have had more recent information.

After checking the VIN, I went to price the Dakota with Kelly's Blue, NAPA and Edmunds whose each ask slightly different questions and the appraised value varies greatly. Kelly's Blue Book is the highest because it is dealer friendly. It states on the KBB website that the prices listed are "A starting point for negotiation between a consumer and a dealer."

KBB's prices the cars in four ways, as a trade-in, from a private party, suggested retail that is meant to be bargained down by a large percentage and finally the 'Certified Pre-Owned (CPO) Value' which suggests some sort of warranty that's is meant to be better than simply buying it 'as is'. CPO's are only offered at dealerships that have factory certified mechanics for that specific vehicle. A CPO cannot be offered by anyone other that the certified car dealership repair center for that model and make of car in order to command the higher asking price. KBB divides ratings into Excellent, (rare), Good, (most common), Fair, (clean title, tires need to be replace), and Poor. Poor means that it has a dirty title and needs major professional work done. NAPA also appraises used vehicles high because they favor insurance companies.

Edmunds delivers a non-biased true market value that may be thousands of dollars less than either listing at KBB or NAPA. Edmunds has five divisions to appraise a car value, Outstanding, Clean, Average, Rough and Damaged. The next step was an insurance rate comparison and found out there is a wide difference in the cost of insurance for the same vehicle. For the minimum state required insurance, electricinsurance.com was the most expensive at $34/month, Progressive was $30/month and the cheapest was Geico at $15/month.

Being new to Arizona and not knowing the local laws, I went to Motor Vehicle Division of Arizona for the rules and regulations. Arizona has special rules such as the license plate does not belong to the vehicle but to the vehicle owner. Arizona law requires that the title must be in the seller's name and states that "If the seller's notarized signature is already on the title and you are purchasing the vehicle from someone other than the seller, you may be purchasing a vehicle from an illegal dealer or curbstoner ... If something goes wrong with the transfer of title, you may not be able to find that middle man or "curbstoner" that you paid for the vehicle, to straighten out any problems."

At this point, I called Siu at Breakmen whom I talked earlier and asked him why he was selling the truck, "Did someone come in for repair and did not pay for it and that's the reason?" Siu said that Breakmen did a bunch of work on it and are "selling it for a customer." This sounded underhanded somehow and began wondering if this was a desperate-for-a-dollar lemon dealership. After the phone call I began wondering if this truck was in the process of being curbstoning or curbsiding. Why is the truck's title coming from Tucson? Is it because it's one year short of being exempt from emissions testing that it is unable to be sold in Tucson? Only within the cities of Phoenix and Tucson are emissions testing required in Arizona

Wary of being taken advantage of because of my ignorance I found out that from the website of MVD of Arizona that; "Upon sale or transfer of a vehicle, the registration for that vehicle is no longer valid."

An Arizona title must be notarized; if the title is not in the seller's name then the title is dirty. The manager of Breakman said he was selling or a customer which tells me it's an illegal sell and there would no paper trace back to Breakmen to avoid: "Cause and Damages" as a result of any of their work that a unsuspecting buyer might be entitled to with a Damage Judgment.

I'm suspecting that this might be a case of illegal curbsiding. I'm speculating that Breakmen might have performed faulty repair work on that truck and the customer refused to pay for it. The Breakmen manager is not selling the truck as a private individual nor as a car dealer and may be attempting to curbstoning it. Fixing and then selling a vehicle is a profile of curbstoning either as a private individual doing as a hobby or from a business.

But then again - I could be wrong. I called MVD of Arizona and explained to them about the title was signed over months earlier by Helen DeTroy. MVD said that in order to transfer the title, the current owner, (Breakman), must have a "Error of Statement" signed and notarized. I called back Siu and he said that's is what he'll do along with a signed statement of the repairs that Breakman done. If Breakmen has a "Statement of Error" and stands by their repair work in writing then this is not a case of curbstoning because there will be a paper trail.

According to Curb Stoppers a curbstoner is, "a person who is actively and regularly engaged in the business of buying and selling of Automobiles or Products but Without a License the Proper Permits or Legally Established Place of Business." The typical baiting tactic is to say that "he's selling it for his relative or friend who's just been deployed overseas." These vehicles have hidden problems and up to, "90%-percent of the cars advertised in classified ads or sold at the curb may be curbstoned vehicles."^[1]

Game theory odds tell me that this is an illegal sale but giving the benefit of doubt - decided to check the reputation of Breakmen itself. I'm hyper-vigilant because of the fear of being caught on the desert with a bad vehicle in temperatures over a hundred amid AAA travel warnings from borderland gang wars. Scared of taking a wrong turn and getting marooned and lost in utter desolation and isolation, I didn't want to be trapped by an unscrupulous repair garage scam artists who take advantage of people not experts at car repair with spurious, or poor repairs and inflated prices

According to the Better Business Bureau, Breakmen has been a BBB accredited business since 1986 with a current rating of A+.

Did you know that businesses that are accredited by the BBB are customers of BBB who charge them to check up on them? This seems to be a conflict of interest on the part of Better Business Bureau. BBB processed a total of 17 complaints about Breakmen in the last 36 months. Ten of them about repair issues.

If over half of the complaints to the BBB were over repair, how can it have a rating of A+? BBB assigns ratings first and foremost by the "BBB's experience with the industry in which the business operates" Oh-oh! The only experience that BBB has is getting paid to endorse them!

At Rip Off Report, reports are never deleted and not hidden and show that Breakmen had 17 complaints of which four were from Tucson. Tucson is where the truck title is located according to Siu Wong of Breakmen in Solly Villa.

Game theory on Lemons & Peaches says that there is no way can ever buy a decent used car - ever. Is this the last word of hopelessness or is there a light at the end of the tunnel?

According to the Arizona Office of the Attorney General Consumer Information and Complaints, Arizona law says that "any deception, false statement, false pretense, false promise or misrepresentation, concealment, suppression or failure to disclose a material fact may be consumer fraud." A private citizen has up to one year under the Consumer Fraud Act to complain. Always request the exact remedy you want with the offending company first before escalation with the AG.

The next day, Siu Wong transferred the truck's title into his own name instead of a notarized 'Statement of Error' - which is even better. I paid $30 for a licensed mechanic to check over the truck. The written inspection was as follows -

$230 Oil pan gasket leaking
$165 Muffler & tailpipe needs to be replaced
Hesitation - pulled spark plug = black, running rich?

I asked my mechanic what could cause the 'running rich' and he said a number of things could be the cause and that a full diagnostic would cost $150 to find out if fuel pump bad , filter, carb or whatever ...

Returned truck to Siu Wong at Breakmen and wrote on a piece of paper my name & number and the price I was willing to pay - $900. He said no, and tossed the paper in the garbage. He says to me that he invested $1200 into it not including labor. He says he can take it to Tuscon and sell it for $1800. I told him "You can't take it to Tuscon." He says" Yes I can" I say, " No, because the truck is one year short of the emission test exemption"

I shook hands with him and said to him that he was very pleasant to deal with but that I was not buying the truck.

References

[1] Business Wire, "CarFax Alerts Consumers to Curbstoning; Experts Renew Warning of Scam in Light of Recent Events" 11.19.2001

Sources

Game Theory on 'Why You Can Never Buy a Decent Used Car'
Arizona Crime Prevention Association (ACPA) N.A.I.L.E.M.
Arizona Free Public Records Search
How to Avoid 'Curbstoning'
Used Car History
moneycentral.msn.com
allbusiness.com
carsurvey.org
www.Edmunds.com
http://search.dmv.org/dmv/arizona/certificate-of-title