Used car scams in Australia: how to protect yourself

Used car scams are a growing problem in Australia

Buying a used car is one of the largest financial transactions most Australians make outside of property. Unfortunately, it is also one of the most targeted by scammers. The ACCC's Scamwatch receives thousands of vehicle-related scam reports annually, with losses running into the millions.

The shift to online marketplaces like Facebook Marketplace, Gumtree, and Carsales has created new opportunities for fraud. Scammers can create convincing listings, impersonate legitimate sellers, and target buyers across state lines — making it harder to verify what you are buying and who you are buying from.

This guide covers the most common scams targeting Australian used car buyers, how to recognise them, and the practical steps you can take to protect yourself.

Fake online listings

This is the most commonly reported used car scam in Australia. The scammer creates a listing for a vehicle that either does not exist or that they do not own. The listing typically features stock photos or images stolen from legitimate ads, an attractive price, and a compelling story about why the car is being sold cheaply.

Red flags to watch for:

• Price is significantly below market value with no clear explanation
• Photos look overly professional, like stock images, or do not show the registration plates
• Seller claims to be interstate or overseas and cannot meet in person
• Communication moves quickly to email or messaging apps outside the platform
• Seller asks for payment or a deposit before you have viewed the vehicle

Deposit and advance payment scams

Deposit scams follow a common script. The seller advertises a vehicle at an attractive price, engages the buyer in conversation to build rapport, then asks for a deposit to "hold" the vehicle. The reasons vary — another buyer is interested, the seller needs to cover transport costs, or a small deposit shows the buyer is serious.

Once the deposit is paid (typically via bank transfer, which is nearly impossible to reverse), the seller disappears. The vehicle either does not exist, or the seller never had any intention of selling it.

A variation involves third-party escrow scams, where the seller suggests using an "escrow service" that is actually a fake website controlled by the scammer. The buyer sends money to the fake escrow, and the scammer collects it directly.

• Never pay a deposit before inspecting the vehicle in person
• Be suspicious of urgency — legitimate sellers do not need immediate deposits
• Do not use escrow services suggested by the seller — if you want escrow, choose the service yourself

Fake seller identity

In this scam, the person selling the vehicle is not the registered owner. They may have stolen the car, obtained the keys through a relationship with the owner, or be selling a vehicle on behalf of someone who does not know about the sale.

To protect yourself:

• Ask to see the seller's photo ID and compare the name to the registration certificate
• Insist on meeting at the vehicle's registered address — not a public car park or neutral location
• Run a stolen vehicle check to verify the vehicle has not been reported stolen
• Be cautious if the seller cannot answer basic questions about the vehicle's service history or recent use

Hidden damage and flood-affected vehicles

Some sellers deliberately conceal serious damage to sell a vehicle for more than it is worth. This includes vehicles that have been in major accidents but not properly repaired, flood-damaged cars that have been dried out and cosmetically cleaned, and vehicles with hidden rust or structural damage.

Flood-affected vehicles are a particular concern after major weather events. Water damage can affect electrical systems, promote hidden corrosion, and create mould problems that are expensive or impossible to fix. Sellers may dry the vehicle out, shampoo the interior, and list it without disclosing the flood history.

• Check for musty or mould smells — flood damage often leaves a persistent damp smell, especially in the boot and under seats
• Look for waterline stains — mud or silt residue in hard-to-clean areas like behind the dashboard, inside door panels, or in the engine bay
• Test all electrics thoroughly — intermittent electrical faults are a hallmark of water damage
• Run a vehicle history report — a RegoVerify report will show if the vehicle was declared a write-off due to flood or other damage

Odometer fraud and vehicle rebirthing

Two of the most financially damaging scams involve misrepresenting the vehicle itself rather than the sale process.

Odometer tampering involves winding back the displayed kilometres to inflate the vehicle's value. Despite the shift to digital odometers, the problem persists — diagnostic tools that reprogram odometer readings are inexpensive and easy to obtain. Look for mismatches between the displayed kilometres and physical wear on pedals, steering wheel, and seats.

Vehicle rebirthing is an organised crime where a stolen vehicle is given the identity of a written-off car. VIN plates from the write-off are transferred to the stolen vehicle, which is then registered and sold. If police later identify the vehicle as stolen, it is seized from the buyer with no compensation.

Both of these scams can be detected through a combination of vehicle history reports (which flag kilometre discrepancies, write-off history, and stolen vehicle data) and physical inspections. See the dedicated guides linked above for detailed detection methods.

Curbsiding: unlicensed dealers posing as private sellers

Curbsiders are unlicensed dealers who buy and sell vehicles for profit while posing as private sellers. This is illegal because it avoids the licensing requirements, consumer protections, and statutory warranties that licensed dealers must provide.

Buying from a curbsider is risky because the vehicles are often problem cars they have bought cheaply — with mechanical issues, hidden damage, or unclear histories. You get none of the protections you would receive buying from a licensed dealer. Red flags include the seller having multiple vehicles for sale, reluctance to meet at their home address, and cash-only transactions.

How to protect yourself from used car scams

Most used car scams rely on the buyer skipping basic checks. These steps significantly reduce your risk:

• Run a vehicle history report. A RegoVerify check covers stolen vehicle data, write-off history, PPSR/finance status, and registration details — catching most vehicle-level fraud in one step.
• Never pay before inspecting. No deposit, no bank transfer, no payment of any kind until you have seen and inspected the vehicle in person.
• Verify the seller's identity. Check their ID matches the registration certificate. Meet at their home address, not a car park.
• Get a pre-purchase inspection. Pay a qualified mechanic to inspect the vehicle before you buy. This catches hidden mechanical and structural issues.
• Be sceptical of bargains. If the price seems too good to be true, investigate why before handing over money.
• Trust your instincts. If the seller is evasive, pushy, or something feels off about the transaction, walk away. There are always other cars.

For platform-specific advice, see the Facebook Marketplace safety guide.