Digital Curbstoning a Growing Concern
Curbstoners are now ubiquitous on Craigslist, Facebook Marketplace, Ebay, but the results are usually the same….a customer with a bad title, no title, lien, or salvage or other undisclosed damages. Some reports indicate up to 80% of used cars sold through online classified ads are orchestrated by curbstoners. 80%! That is taking away a lot of business from licensed dealers and may dilute your online advertising budgets and SEO spending.
Members from the Texas Independent Automobile Dealers Association recently met with representatives of other states at the National Independent Automobile Dealers Association Annual Convention to discuss curbstoning and how to better regulate these rogue dealers and better inform state regulators about this issue and how to enforce applicable laws.
Consumers may now research vehicles for sale by owner through online platforms such as Craigslist, Facebook Marketplace, and even traditional online listing services. Obviously buying a vehicle through a private party car sale may seem like a relatively fast and easy option, consumers should be aware that they might be buying from a curbstoner.
“Curbstoning” is the illegal sale of used cars for profit, commonly by unlicensed dealers who make a profit by repeatedly “flipping” cars. A curbstoner may put dealer plates on the car to make the sale seem authentic and lure customers who are wary of buying cars from a dealership. Alternately, some curbstoners are actually licensed dealers who pose as private sellers in order to make a profit on the side. According to Texas state law, anyone who sells more than five cars in a twelve month period is considered a dealer and must have a GDN dealer's license. Yet many curbstoners are able to gain access to auto auctions to purchase vehicles at the same site as licensed dealers. Dealers should take precautions about who is authorized to attend an auction on their behalf.
If a consumer buys car from a curbstoner, there could be consequences:
If the car is unsafe, has mechanical problems, or has been written off as a total loss by an insurance company due to collision, flood, or other damage, they may not even know about the danger. Aside from potentially putting the safety of buyers at risk, their passengers, or fellow motorists at risk, curbstoners can be difficult to track down and you may risk losing the protections under the law.
If a consumer buys a vehicle from a curbstoner you could have title problems at the Texas Department of Motor Vehicles.
Curbstoners are illegally avoiding paying the licensing fees and overhead costs that are required for all legitimate Texas dealers, as well as required sales tax and registration fees. Therefore, curbstoning causes state and local governments to lose millions of dollars in revenues and fees.