One of the most common automobile sale scams I hear about is Curbstoning, so named because the transaction often takes place in front of a residence, at the “curb." Curbstoning lulls a buyer into a false sense of security. Here’s how it works – and what to watch out for, particularly in the aftermaths of Harvey and Irma.
If you or I sell a car from our home, we might meet the prospective buyer in the street and show them the car. The low key transaction is quite different from the buyer-seller experience people encounter when at a car dealership. People let their guard down when they are simply kicking the tires in someone’s front yard or driveway.
Some unscrupulous sellers take advantage of this and purposely move their sales to such a setting. For example, a car dealer having a hard time moving a car off of his lot in an ugly part of town might advertise the car on Craigslist and give out a cell phone number to call. When a prospective buyer calls, the dealer will tell the shopper to meet him in front of his house where the car will be parked. The car’s perceived value is higher when being sold by an individual in a nice neighborhood than it would be when sold by a used car dealer in a bad part of town.
While the negotiation takes place in front of the residence, the seller will often provide paperwork showing the true seller is a dealer. In some states this practice is not illegal but shoppers should be wary of it. Clearly, the seller is putting one over on the seller by misrepresenting the nature of the sale.
Curbstoning also encompasses the sale of cars by people who ought to be licensed as used car dealers but aren’t. In Michigan, anyone selling five or more cars in a calendar year needs to be licensed as a used car dealer. But there are many car flippers who don’t bother getting the licenses because of all the regulatory baggage they carry. Every neighborhood seems to have one of these people. The guy who has a different car For Sale in his driveway every few weeks.
The car shopper cannot always tell if they are dealing with someone who is in violation of this portion of the law. But many of these sellers–to try and stay off the radar of authorities–will “skip” the titles to the cars they sell. They’ll show you the title to the car has already been signed off by the previous owner–not the seller you are dealing with–and want to sell you the car without their name appearing in the chain of title. In most states this practice IS illegal if the seller is not a licensed dealer. And while these transactions may work out alright for the buyer they are rife with potential problems. Among other things the buyer cannot prove who they bought the car from. And they have to hope that the title was executed properly by the previous owner, the one who owned it before the Curbstoner sold it to them.
What has this got to do with the recent hurricanes? Hundreds of thousands of cars have been damaged in the past few weeks, many of which will end up in the stream of commerce being sold by unscrupulous sellers. Suppose a car flipper in another state gets one of these cars. What better way to unload it than to pretend it was a family car and is now simply being sold out in front of the family home far away from the hurricane zones?
If you are a car shopper and find yourself in front of someone’s house looking at a car for sale, there are a few things you should watch for. Ask to see the title to the car and make sure it is titled to the person you are talking to. If it’s not, I’d advise against purchasing the car. If the curb you are standing in front of is not in Texas or Florida but the car has a title from one of those two states, it might be a problem as well.
If you find the car listed on Craigslist or some other free platform, scan other ads to see if this seller’s phone number is listed with any other cars. Some Curbstoners will have several cars listed at the same time–which is a sign that the person you are dealing with is not a typical individual simply selling a car.
If the seller tells you that the paperwork for the car will be completed by a car dealer who is doing someone a “favor,” know that the car is being sold by a dealer. It is not a private sale. This may or may not matter to you but it is something to factor into the equation: The seller you are dealing with started off your relationship with a lie.
Curbstoning is always a problem you should be on the lookout for. It is even more important now, though, in light of how many flood damaged cars will be foisted on unsuspecting car shoppers.
Steve Lehto is a writer and from Michigan. He specializes in Lemon Law and frequently writes about cars and the law. His most recent books include , and . He also has a where he talks about these things.