It’s no secret that junk car companies can be seen as shady and illegitimate. Unfortunately, the large number of scammers out there have given our industry a bad rep and understandably so. Nothing feels worse than the feeling of knowing you’ve been ripped off or mislead. We get it. It’s hard to spot a scam so we want to help you figure out how to spot a junk car scam.
However, it’s important to remember that there are a ton of legitimate junk car companies that will be honest and transparent with you every step of the way. We want to alleviate the stress of finding someone to junk your car by making sure you know exactly how to differentiate between a legitimate and illegitimate junk car company.
How To Spot A Scam – Junk Car Company Red Flags
The number of scam companies in the U.S. is upsettingly large. In fact, reports suggest that over 1 million junk cars have been title washed—meaning the car was “washed” of its junk brand and then resold. There are numerous accounts of people who bought a car that appeared to be in good condition but was actually seconds away from breaking down. Always thoroughly inspect a used car before signing any paperwork or completing the transaction.
The first step to spotting a scam company is knowing what to look for. There are numerous shady practices that are clear indicators of illegitimacy. We’ve provided you with a detailed list of red flags to help you spot these companies before any real harm is done.
1) Not Licensed
This is the very first red flag you should look for. Always ask to see their license right away, before you proceed to do any business with them. Legitimate companies will show it to you without a problem, while illegitimate companies will be difficult about it or straight up refuse to show you.
Come on Joe, we know the dog didn’t eat your license!
Being properly licensed isn’t always a tell-tale sign that the company is reputable, but it’s a good place to start. If the company isn’t licensed, then they shouldn’t be getting your business. Plain and simple.
2) Prays On Your Ignorance
Scam companies rely on ignorance. They hope that you know nothing about cars or their value so that they can take advantage of you. Even if you did your research and call them out on the misinformation, they’ll most likely try to convince you otherwise or refuse to do business with you.
They’ll dramatize issues such as flat tires or water damage claiming that it majorly affects the value. You should especially be wary if they went to the trouble of towing your car to their lot before giving you the disheartening news. Why would they go to all that effort if your car truly was worthless?
No matter how old or dysfunctional your vehicle is, there’s always something that can be salvaged from it. Don’t let scam companies convince you it’s complete trash.
3) Too Good To Be True
On the reverse side, some companies will give you unbelievable offers. These are the hardest ones to resist since you want so badly to believe it. Scam companies will go to ridiculous measures to lure in unsuspecting junk car owners.
They may tell you that it’s worth a ton of money upfront, tow it to their lot, and then pull the stunt we mentioned above. Always do research into how much your car is worth and take a full inventory of any issues or damages. You can always review that list with a trusted mechanic to make sure there’s nothing you’re missing. Make sure to go over that list with the junk car company before they tow it to their lot.
Another thing to watch for is offerings of coupons, gift cards or freebies. While these are not always bad, they may just be another tactic to get you through the door with the intention of screwing you over later on. It’s important to ask yourself, are you truly getting a good deal? Or are you falling for flashy offers?
4) Suspicious Payment Method
The safest and best option for payment is cash. Reputable junk car companies have similar policies where they’ll pay you cash up front and on the spot. Scam companies have become well-versed in all the ways they can snake their way out of having to pay you.
Common Junk Car Scam Methods To Watch For:
- No up-front payment. The idea behind this tactic is to give you an up-front quote, but wait to hand over any form of real payment until after your car is towed to their lot. Scam companies will come up with all sorts of mumbo jumbo as to why they can’t pay you until afterward. Don’t believe any of it. You should always receive your money before the car is towed away and especially before you sign over the title.
- Payment plans. Never do business with a company that tries to set up monthly installments. You should be offered a lump sum before the title has been signed over. Once the company owns the title, the car is in their ownership and they’re not legally required to pay you for it.
- Checks. Be wary if the company tries to pay you via check. They could do everything by the books—writing the check for the full amount promised before you hand the car over, but that doesn’t mean you’re in the clear. With checks, there’s always the risk that they may bounce. A faulty check can act as a prop that’s designed to make you feel comfortable signing the title over. If the check bounces after you’ve already signed the title of your car to the company, then sadly you’re out of luck.
- Escrow services. Escrows are designed to make the seller feel secure since they exist to protect a transaction. The problem is that scam companies will often use fake escrows that are specifically designed to cheat people of their money. It’s just another way to make that dollar amount you were promised to vanish before your eyes.
5) They Insist On Handling The Paperwork
Once you’ve gotten the cash for your junk car and they’ve towed it to their lot, you’re still not technically in the clear. They may try to screw you by insisting that they’ll handle the paperwork for you. This slimy tactic makes people think that the workers are just trying to be helpful when in reality they’re planning to keep your registration active. If you don’t cancel your registration, anything that may happen to the car is your responsibility.
Don’t Become A Victim!
If you follow these steps on how to spot a junk car scam, you should be able to easily dodge scam companies and get the best value for your junk car. Now, these are not the only ways junk car companies will scam you out of your money, unfortunately, some go to even more creative measures. Our best advice to you is to make sure you’re educated on your car’s worth and to trust your gut. If something seems fishy or doesn’t feel right then it probably isn’t. Your intuition will always guide you down the right path.