Protecting Yourself: 6 Common Types of Auto Fraud and How to Avoid Them



Auto fraud is a serious concern for consumers when purchasing a vehicle. Unscrupulous practices by dealerships or sellers can lead to financial loss and legal complications. To protect yourself from falling victim to auto fraud, it’s crucial to be aware of the common types of fraudulent activities and take preventive measures. In this article, ¬†Nathan DeLadurantey¬† will discuss six common types of auto fraud and provide valuable tips on how to avoid them.

I. Odometer Fraud: Verifying Mileage and Vehicle History

Odometer fraud involves tampering with the mileage reading to make the vehicle appear less used and more valuable. To avoid this, request a comprehensive vehicle history report that includes mileage records. Additionally, inspect the vehicle’s condition for signs of excessive wear and tear that don’t align with the reported mileage.

II. Title Washing: Checking Vehicle Titles for Accuracy

Title washing refers to altering a vehicle’s title to conceal its true history, such as salvaged or flood-damaged status. Always obtain a vehicle history report and review the title carefully. Look for any inconsistencies or branding that suggests the vehicle has undergone significant damage. Verifying the title’s authenticity helps prevent falling victim to title washing scams.

III. Salvage Fraud: Inspecting for Hidden Damage

Salvage fraud involves selling vehicles that have been declared total losses due to severe damage or theft. To protect yourself, inspect the vehicle thoroughly for signs of hidden damage, such as mismatched paint, misaligned panels, or inconsistent gaps. Consider hiring a professional mechanic for a comprehensive pre-purchase inspection to uncover any potential salvage-related issues.

IV. Yo-Yo Financing: Reviewing Financing Terms Carefully

Yo-yo financing occurs when a dealer allows a buyer to take possession of a vehicle before the financing is finalized, only to later inform them that the financing fell through and imposes unfavorable terms. To avoid this, carefully review and understand all financing documents before taking delivery of the vehicle. Consider securing pre-approved financing from a trusted lender to have more control over the financing process.

V. Spot Delivery Scams: Being Cautious with On-the-Spot Deals

Spot delivery scams involve dealerships allowing buyers to drive off with a vehicle under the assumption that the financing is approved, only to later notify them that the financing was denied or needs to be renegotiated with unfavorable terms. Be wary of signing any documents without thoroughly understanding the terms and having confirmation of approved financing in writing.

VI. Warranty Scams: Researching Extended Warranty Providers

Warranty scams often involve sellers offering bogus or misleading extended warranties that provide little to no coverage. Before purchasing an extended warranty, research the provider’s reputation, check customer reviews, and carefully review the terms and coverage details. Avoid purchasing warranties from unknown or untrustworthy sources.


Protecting yourself from auto fraud requires awareness and due diligence. By understanding the common types of auto fraud, such as odometer fraud, title washing, salvage fraud, yo-yo financing, spot delivery scams, and warranty scams, you can take preventive measures to avoid falling victim to these fraudulent practices. Always obtain comprehensive vehicle history reports, conduct thorough inspections, review financing documents carefully, and research warranty providers before making any commitments. Remember, if a deal seems too good to be true, it’s essential to exercise caution and seek professional advice. By staying informed and taking proactive steps, you can safeguard your interests and make informed decisions when purchasing a vehicle.

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