Online car buyers beware: unlicensed sellers, 'curbstoners,' title scams

Used car online ad
Posted at 4:09 PM, May 04, 2022
and last updated 2022-05-04 17:11:16-04

NASHVILLE, Tenn. (WTVF) — The online purchase of vehicles comes with high risk because of unlicensed sellers, unethical practices and avoidance of governmental regulations.

The Tennessee Department of Commerce and Insurance (TDCI), the Tennessee Motor Vehicle Commission, the Tennessee Attorney General's Office and the Tennessee Department of Revenue are all alerting consumers to the risks that online car purchasing has created.

Many consumers have filed complaints of vehicles purchased online arriving with damage not disclosed in their advertisements. This illuminates the importance of inspection or prior driving before finalized sales.

Other buyers are having trouble obtaining a clear title or registering the vehicles they've purchased online. That's because some dealers are offering cars before even acquiring their titles.

Another problem is "curbstoning," which is the name for when a dealership pretends to be a private seller to avoid used car sales regulations, hoping to sell cars faster.

“As we head into graduation season and summer vacation, shoppers will likely want a new vehicle for students to take to college or for family vacations,” said Motor Vehicle Commission Executive Director Denise Lawrence.

“Unfortunately, we've discovered that some consumers are frustrated because they’ve given their hard-earned money to online salespeople who do not have either a valid Tennessee dealer’s or salesperson’s license. While it might be inconvenient to wait and buy a vehicle in person from a licensed salesperson, consumers will be glad they waited in order to avoid the bitter aftertaste of a supposedly good deal,” Lawrence said. 

Vehicle sales by unlicensed companies are prohibited, even if the companies only sell online. But it is the responsibility of the customer to check the legitimacy of the seller before agreeing to a sale. Very little can be done if a seller is unlicensed and operating outside of Tennessee.

“We understand the urgency some buyers feel while searching for used vehicles online,” said General Herbert H. Slatery III. “With increased demand comes increased risk of dealing with a dishonest broker. Take your time, check for a license before you buy.” 

To ensure the vehicle is offered by a legitimate, licensed seller, the Tennessee government has created a keyword searchable database.

The Tennessee Attorney General's Division of Consumer Affairs also offers a link to file a complaint online about a business or dealership engaged in deceptive practices. They also take calls at 615-741-4737.

Anyone experiencing issues with motor vehicle transactions may file a complaint online with the Tennessee Motor Vehicle Commission, or call 615-741-2711.

To determine what to do if a current issue with a purchased car's title is still unresolved, the Tennessee Department of Revenue offers an online questionnaire.