The new-car market has experienced constrained stock levels since the onslaught of Covid-19, leading to rising demand for affordable auction vehicles.
“However, opportunist fraudsters leverage this trend, exploiting vulnerable budget car buyers,” said Clive Lazarus, director of Park Village Auctions.
While bargain buys can still be found at auction, this segment of the market is a minefield for potential scams and vehicles not being what they initially appeared.
Lazarus offers helpful advice for car buyers looking to spend their hard-earned money at the auction blocks in hopes of walking away with a proverbial steal.
Is the business legit?
At face value, an auction house may seem lawful as it has professional-looking logos and passably-genuine contact numbers, but that isn’t always a sure-fire sign of legitimacy.
“Scrutinise the logo and business details; scammers create very close replicas,” said Lazarus. Also, verify the business’s banking details wherever possible to ensure that the money truly is sent to the entity that is claimed to receive it.
Another step for additional peace of mind is to check if the company is a registered South African Institute of Auctioneers (SAIA) member.
Repossessed cars are verifiable
If a vehicle for sale was “repossessed” by a finance house such as a bank and put up for auction, it’s possible to verify that it is actually being sold by said finance institution and not someone pretending to be it.
“All major financial lending intuitions will list their upcoming auctions on their websites,” said Lazarus.
“These lists often link directly to the auction house selling the cars on their behalf.”
Social media is no home for car auctions
Social media platforms such as Facebook do not abide by the necessary privacy laws to which auctions are bound, and they do not provide sufficient resources for hosting events as complicated as an online bidding process.
“If you see a sale advertised as such – run,” said the auctioneer.
Suspicious starting prices should raise an eyebrow
Auction impersonators will oftentimes promote a supposed sale by advertising an incredibly attractive “starting price” or “opening bid price” to reel in uneducated buyers.
This will never happen at a “legal auction,” according to Lazarus.
See it in the metal
It’s vital to see the vehicle you are bidding on in the metal to make sure that it exists and to confirm its true condition before committing to any financially-binding agreements.
If it’s not possible to go yourself, send someone on your behalf to do the legwork, or rather let the deal go.
Ask plenty of questions about the deal as this will flesh out fraudulent actors who might get nervous or lose interest.
“A good auction house will always be willing to answer your questions. Feel free to call and educate yourself as much as possible before placing your first bid,” said Lazarus.
Don’t feel pressured
Finally, a tried-and-true method for detecting a fake auction is if you feel pressured to make a payment or put down a deposit, and are not given time to think.
“At the very least, you must register to bid because bids taken from unregistered persons are invalid,” said the expert.
“The deposit is refundable if you did not purchase anything. Before that, make sure you’ve followed all these security steps.”
Leave a Reply