• New data from the ACCC found that Australians have been cheated out of $288,000 by used car scammers in the first three months of 2021.
• A chronic shortage of new cars has resulted in surging used car prices, with values increasing by up to 40%.
• The ACCC says Australians are susceptible to lose even more if the trend continues.
• Visit Business Insider Australia’s homepage for more stories.

Australians have already lost over $288,000 to vehicle scams, according to a report by the ACCC, as a scarcity of new cars pushes buyers towards independent sellers.

The Australian Competition & Consumer Commission (ACCC) reported a pronounced uptick in scams in the first quarter of this year – more than all losses reported to Scamwatch in the entirety of 2019.

A chronic shortage of new cars – caused by production interruptions due to parts delays during the coronavirus crisis – has prompted an unprecedented surge in used car values across Australia, and is pushing those looking to buy toward cheaper offers online.

ACCC deputy chair Delia Rickard said that as second hand car sales increased during the pandemic, vehicle scams rose too, and suggested that evidence points to a continuation of the problem.

“If current trends continue, Australians could lose much more to vehicle scams this year than the $1 million lost in 2020,” Rickard said.

She added that the agency wants to ensure Australian consumers know about the risks.

“We want to raise awareness of these scams to reduce the number of people who may be vulnerable to them.”

Most commonly hosted on sites such as Facebook Marketplace, Autotrader, Carsales, CarsGuide and Gumtree, vehicle scams occur when fake listings are posted offering to sell in-demand cars at well-below market value.

Scammers then seek payment to secure the car for the buyer but never deliver the vehicle.

The unprecedented surge in used car values across Australia has been widely reported, with Carsales, one of Australia’s largest markets for second-hand cars releasing figures in February showing the average time to sell a vehicle through the site dropped 40% over 2020.

Data compiled by Moody Analytics estimate that used car values have surged between 30% to 48% since the pandemic struck in March last year.

However experts estimate the bubble will burst, and have warned finance companies would slam the brakes on loans for used cars that were overvalued, because of the slim chance of recouping their money if a lender defaulted on the loan.

Rickard said buyers needed to be wary of classified ads offering vehicles at low prices. She said one Scamwatch report showed a listing that advertised a car for nearly $10,000 below market value.

The report showed many scams occurred when sellers sought payment via a third party website, or requested payment methods using eBay, direct bank transfer or international money transfers.

“If the seller claims to be unavailable and insists on payment before meeting the buyer or allowing them to pick up their new car, this should raise suspicions,” Rickard said.

“It is relatively common for scammers to claim that they are travelling or moving away to avoid meeting buyers before payment.”

The report also found that of those who reported being scammed, 80% avoided losing money by identifying the scam early.

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