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Buyer beware in online auto sales: experts

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A woman places flowers in front of Tim Bosma's home in Ancaster, Ont.

DAVE CHIDLEY / THE CANADIAN PRESS Enlarge Image

A woman places flowers in front of Tim Bosma's home in Ancaster, Ont.

TORONTO -- July Ono had been buying used cars online for years without problems.

So she was stunned by a panicked phone call from a friend saying the Jeep Ono bought a month earlier was being towed away by a bailiff.

In hindsight, Ono says she had been suspicious of the tall, charming stranger who had posted his car for sale on Craigslist.

"I was sitting there going, July, there's just something wrong with this person," said Ono, now 50.

"But I just couldn't figure out what it was."

She took the vehicle for a test drive and had it inspected at a dealership. Everything seemed to be in working order.

It was only when Ono got the late-night call while out of town on business that she discovered the seller had used it as collateral on a loan a month earlier.

Online car classifieds can offer convenience and bargain prices, but experts recommend taking precautions to protect yourself from scammers and "curbsiders," full-time fraud artists pretending to be private sellers.

About one in five Canadians who buy or sell used cars online encounter scammers or fraud, according to a recent report by the Automobile Consumer Coalition.

Out of more than 1,000 people polled, 13 per cent said they were contacted by fraudulent buyers who offered to overpay for their car with a phoney cheque, asking the seller to refund the difference.

Another 12 per cent came across listings posted by suspected curbsiders.

Yet 76 per cent of respondents said they weren't worried about fraud.

The margin of error for the survey, which was conducted by Angus Reid Public Opinion, was plus or minus 3.1 percentage points, 19 times out of 20.

Approximately 600,000 of the three million used cars Canadians buy and sell each year are sold on sites such as Craigslist and Kijiji, according to research compiled by the coalition.

"This problem is going to get worse and worse," said Mohamed Bouchama, director of the Toronto-based consumer-advocacy group.

"More people are using the Internet because of the convenience. Lots of people don't want to go visit five, six, seven dealerships."

George Iny, director of the Automobile Protection Association, recommends looking for mid-priced car rather than going for the cheapest one listed when you're shopping for used vehicles.

"Don't be a price junkie," said Iny. "The seller always knows more than you. If the car is priced below market, it's almost always for a reason."

Buying junk will often cost you more in the long run, as you foot the bill for pricey repairs.

"The cost of taking something that's in average condition and making it good condition is higher than the premium you'd pay just to buy the same vehicle in good condition," said Iny.

When buying a used car, Iny and Bouchama both recommend getting it inspected before you fork over the cash. You can either take the vehicle to a garage, or look for a mobile inspector who will come to you.

Always ask to see the vehicle ownership and the seller's driver's licence to make sure the names match, said Bouchama.

Check the car's history, which will show you how many times the car transferred ownership, if it was a writeoff or if it's been in a major accident.

Bouchama suggests buying from a dealer because of the added level of accountability. But if you're going to do so, Iny recommends keeping a sharp eye out for hidden fees.

Provincial laws in Ontario, Quebec. B.C. and Alberta require all-in pricing, but violations do occur.

"The advantage of the dealers is that if there is a problem, there's somebody you can sue," said Iny.

"A private seller may not be around, or you won't find them if a they're a curber."

If you're selling your car online, be very cautious any time someone offers more than the car is worth, said Bouchama.

He also recommends taking a bank draft or cash -- never certified cheques because they're easily forged.

Consider setting up a temporary email and phone number to conduct the sale, and always bring someone with you when meeting a potential buyer.

"You never know who you're dealing with," said Bouchama. "There are some scary people out there, especially if you have a very nice car to sell."

An extreme example is the murder of 32-year-old Tim Bosma, the Ontario man who was killed after he took two men for a test drive in the the Dodge Ram truck he was selling.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition May 18, 2013 B19

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