Four steps to avoid buying a stolen car

How do you avoid buying a stolen car when buying a second-hand car is one of the issues you have to deal with when getting new wheels. Your new second-hand car could even contain stolen parts, which could create a headache as well.

Before the Consumer Protection Act (CPA) came into operation in 2011, you had even bigger problems if it was found that the car you bought was stolen.

It was repossessed and if you borrowed money to finance buying the car, you had to continue paying the back the bank even though you did not have the car anymore.

Your rights when buying a second-hand car

Section 44 of the CPA protects the rights of consumers to assume a supplier is entitled to sell the goods offered for sale, stipulating that every consumer has a right to assume and it is an implied provision of every transaction or agreement that the supplier has the legal right, or the authority of the legal owner, to supply those goods.

In addition, the supplier is fully liable for any charge or impediment pertaining to the goods in favour of any third party unless it is disclosed in writing before the transaction or agreement is concluded. If the goods are supplied as a result of any transaction or agreement that infringes a right or claim of a third party, the supplier is liable.

Although the supplier will be in trouble if he sold you a stolen car, it is still better to avoid all the administrative issues that you will have to attend to.

Take precautions to protect yourself

The high level of crime in South Africa means that stolen cars do end up for sale and therefore second-hand car buyers are encouraged to take precautionary steps to avoid the implications of buying a stolen vehicle, Karen Rimmer, head of distribution at PSG Insure, says.

“Consumers must beware of neglecting their ‘due diligence’ before closing a deal to buy a second-hand car. In my experience, when buyers are too trusting and unaware of the prevalence of car theft, they could run the risk of having their cars impounded or confiscated without compensation or having their insurance claims rejected.”

She urges customers to only buy cars from reputable dealers.

“Before agreeing to the purchase, you should do research on the dealership by searching for reviews on social media and review websites. Reputable dealers must also be contactable in a number of ways, including email, phone and at a physical and verifiable address.”

Rimmer also warns consumers against car salespeople who seem ‘pushy’ and are overly willing to negotiate on price.

“If a deal sounds too good to be true, it is often because it is.”

She says consumers can take various steps to verify that the car is not stolen.

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Step 1:

The first step is to check that the seller’s address, whether it is a dealership or a private seller, matches the address on the registration and roadworthy documents. It is also important to check the car’s service history, as it is not recommended to buy a vehicle that is sold without a logbook of repairs or a full service history along with approved confirmation from the service provider.

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Step 2:

It is also important to conduct a basic background check on the car itself. Rimmer says you can verify the legitimacy of the vehicle and its parts by using its Vehicle Identification Number (VIN). Every VIN in the world is unique to a specific vehicle and is composed of 17 characters that serve as its identifier. You can use the VIN to verify multiple aspects of the car, as well as its licensing history and parts.

“The VIN should be consistent across all roadworthy and owner registration documents. The chassis number should be the last six digits of the VIN and both the engine and chassis numbers should correspond with those on the car registration papers. If they do not, those parts could have been pirated or stolen.”

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Step 3:

Rimmer recommends checking whether the vehicle has been fitted with microdot technology. Since September 2012, all new motor vehicles registered in the country are required by law to carry microdot technology.

“Microdots are virtually indestructible particles featuring unique UV identification codes that are readable only by using a special magnifier. Each code is registered in the department of transport’s e-Natis system for tracking and tracing purposes.”

Service providers such as DataDot made significant headway to deter theft, counterfeiting and product diversion. “If a VIN is thought of as a car’s fingerprint, you could think of a microdot as the car’s DNA.”

She says microdots are most commonly used to identify your car when it is recovered after being stolen, but this technology is also an incredibly useful way to check whether a car has been stolen before agreeing to the sale. It is therefore a highly recommended as a personal risk management strategy.

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Step 4:

Once the car has been thoroughly checked for legitimacy, you must remember to insure your car. “At this point, it is vital to obtain an accurate valuation of its worth, particularly in the case of second-hand vehicles which may contain custom sound systems, body modifications or other fixtures that may increase its replacement value.”

Rimmer says that you must also review the insurance every year. “Check in with your adviser about the condition of cover for your vehicle, as factors such as changes to where you park it overnight, whether it is designated for business or personal use, as well as the risk profiles of the nominated drivers may influence your premium and the conditions of your policy.”

She says making a habit of reviewing your car’s insurance policy every year is part of developing a sound financial wellness regime.