In the world of used car sales, a term that every buyer should be familiar with is ‘curbstoning.’
This practice involves unlicensed car dealers posing as private sellers, often leaving buyers with vehicles that have hidden issues.
This article aims to provide a comprehensive understanding of curbstoning, its impact on the car industry, and how to avoid falling victim to this widespread scam.
What is Curbstoning?
Curbstoning is a deceptive practice where unlicensed dealers sell used cars while pretending to be private sellers.
Although curbstoners are very capable of having a decent quality used car, many will sell vehicles that are salvaged, damaged or have tampered with odometers because they simply do not have the resources to get high-quality vehicles like a legitimate dealership.
The term ‘curbstoning’ originates from the practice of these sellers displaying cars for sale along the curb or in a parking lot rather than in a licensed dealership; however, today, most curbstoners will be found selling cars out of their house or a rented warehouse/storage facility.
The Legality and Risks of Curbstoning
The legality of curbstoning varies, but it’s generally frowned upon as it bypasses regulations designed to protect consumers.
Curbstoners sidestep the legal obligations that licensed dealers must adhere to, such as ensuring the car meets certain safety standards or providing a warranty.
This leaves buyers unprotected and at risk of purchasing a car that may be unsafe or worth less than the asking price.
Penalties for Curbstoning
Although laws against curbstoning differ from state to state, here are two examples of the potential penalties should you be caught curbstoning:
- Georgia: According to the Georgia Independent Auto Dealer Association, Georgia’s anti-curb stoning laws are enforced under the jurisdiction of a motor vehicle and traffic law. Law enforcement officers can issue tickets to the individual vehicle owner, the property owner, and/or the lessee of the property. The fines and penalties range from $100 to $1000 for each violation and/or up to 12 months in jail. source
- Maryland: In Maryland, anyone in the business of buying or selling vehicles must be licensed. A person selling three or more vehicles within a 12-month period may be considered an unlicensed dealer. Unlicensed dealers may face up to a $5,000 fine or up to 1 year in jail. Subsequent offenses may bring stiffer penalties. Dealers who advertise in the newspaper must disclose that they are dealers. All licensed dealers must maintain a physical place of business and do business only at that location, present the buyer with a Maryland Safety Inspection Certificate, guarantee that the sales staff is licensed, and make every reasonable effort to guarantee that the vehicles have clear titles. source
The Impact of Curbstoning on the Car Industry
Curbstoning has a significant impact on the car industry, affecting both car dealerships and private sellers.
For legitimate car dealerships, curbstoning creates unfair competition as these unlicensed dealers can offer lower prices by avoiding taxes, fees, and regulations.
For private sellers, curbstoning can undermine trust in the private sales market, making it harder for honest sellers to find buyers.
Furthermore, curbstoning can lead to an influx of low-quality, potentially dangerous vehicles in the market. This not only harms consumers but also tarnishes the reputation of the used car industry as a whole.
Identifying and Avoiding Curbstoning
Spotting a Curbstoner
There are several signs that you may be dealing with a curbstoner.
- The seller has multiple vehicles listed for sale
- The vehicle is priced significantly below market value,
- The seller is unwilling to meet at their home or place of business.
Additionally, curbstoners often only accept cash and may be hesitant to provide a receipt or proof of sale.
Tips to Avoid Curbstoning
Avoiding curbstoning requires a keen eye and a healthy dose of skepticism. Here are some tips to help you steer clear of these unlicensed dealers:
- Research the Seller: If the seller has multiple listings or seems to be selling cars regularly, they may be a curbstoner. A genuine private seller typically only has one vehicle for sale.
- Inspect the Vehicle: Always inspect the vehicle thoroughly. Look for signs of damage or wear that don’t match the vehicle’s reported mileage or history or what the seller is telling you.
- Check the Title: A vehicle’s title can reveal a lot about its history. Look for terms like “salvage” or “rebuilt,” which indicate the car has been severely damaged in the past. Also run the title number through the state’s DMV system where the vehicle is titled.
- Use Vehicle History Reports: Services like Carfax can provide a detailed history of the vehicle, including any reported accidents or title changes. If the title was transferred recently, that’s a warning sign.
- Trust Your Gut: If a deal seems too good to be true, it probably is. Don’t let a low price blind you to potential red flags.
The Dangers of Buying from a Curbstoner
Curbstoners are notorious for selling vehicles that are not what they seem.
These cars often have hidden issues that can turn your bargain purchase into a costly nightmare. Here are some of the risks associated with buying from a curbstoner:
Salvaged or Rebuilt Titles
A common trick among curbstoners is to sell cars with salvaged or rebuilt titles. These titles indicate that the car has been severely damaged in the past and then repaired. While these cars can be cheaper, they can also be unsafe and may have ongoing mechanical issues.
In some cases, curbstoners may even sell stolen vehicles. If you unknowingly buy a stolen car, you could lose both the car and the money you paid for it if the police recover it.
Hidden Mechanical Issues
Curbstoners often sell cars with serious hidden mechanical issues. These issues can be expensive to fix and can make the car unsafe to drive.
The Process of Selling a Car with a Loan
Curbstoners have been known to sell cars that still have a loan or lien against them. This means that the car is not fully paid off, and the lender could repossess the car if the loan is not paid.
If you buy a car with a lien against it, you could end up losing the car and the money you paid for it.
To avoid this, always check the car’s title before buying. If the title lists a lienholder, make sure the loan is fully paid off before you buy the car.
What is the curbstoning law in Florida?
The law in Florida on Curbstoning prohibits the parking of any vehicle on public right of way or on private property for the purpose of sale without the permission of the property owner.
Does flipping cars make good money?
Yes, you can make good money flipping cars on the side, but you generally have to find cars that need some fixing and be good at dealing with the general public.
How many cars can you legally sell in Florida (before you need a dealer license)
In Florida, you are allowed to sell only three cars in a 12-month period. Any more than that, and you are considered a dealer by the state.
Curbstoning is a serious issue in the used car market. It’s a deceptive practice that can leave buyers with a car that’s worth less than they paid for it, or worse, a car that’s unsafe to drive.
By understanding what curbstoning is, recognizing the signs, and knowing how to protect yourself, you can navigate the used car market with confidence.
Remember, the best defense against curbstoning is knowledge.
Always do your research, inspect the vehicle thoroughly, and don’t be afraid to walk away from a deal that seems suspicious. With these tips in mind, you’ll be well-equipped to avoid curbstoning and make a safe, informed, used car purchase.