Consumers Need To Do More Homework Before Buying A Car

Written by: Viraf Baliwalla, President Automall Network Inc., 2021-01-20

(Back to list)

In 2019, Walter Gaudet wanted a classy yet sporty luxury vehicle. He found just what he was looking for in a used Audi S3 being sold through a franchised Audi dealer. Like many people these days, Walter asked the dealer for the CarFax vehicle history report which stated "Accident reported involving front impact with another motor vehicle. Light damage reported". The Insurance Claims section of the CarFax report stated "No claims found". Further, the vehicle had passed the Certified Pre-Owned requirements from the Audi dealer and Walter was provided with the Audi Certified Plus report. The average person would most likely interpret that as nothing to worry about. Walter certainly interpreted it that same way.

Fast forward one year and the world is in the middle of COVID. Like most people who found themselves spending their time for the foreseeable future not having to commute and working from home, Walter decided it was time to sell the S3. So he approached Automall Network, an auto broker, who offered a consignment program to sell it on his behalf.

"It was a great looking car" said Viraf Baliwalla, President of Automall Network. "We were happy to bring this vehicle into our inventory".

The first steps in Automall Network's consignment program are to have the vehicle independently inspected and to review the VIN history and lien reports.

"When we are representing the vehicle to potential buyers, we take on the liability of that vehicle" says Baliwalla. "So we have to be sure of the condition and history".

Outside of the inspection and VIN history, which sellers need to do anyway, Automall Network charges sellers a flat $600 to find a retail buyer on their behalf, with $300 as a deposit and the balance upon successful sale.

The vehicle passed the inspection with minimal work required and the up-to-date CarFax still stated "light damage reported". However, Automall Network dug a little deeper and found that the "light damage reported" was actually $24,258.

"Despite the huge marketing dollars spent conditioning the public to 'know the (Car)Fax' about a vehicle before purchasing it, the data is only as good as the people entering it - garages and insurers included" says Baliwalla.

"It is our understanding that not all insurance companies report their claims to CarFax, nor do garages or bodyshops for repairs and service" say Baliwalla, who ran the insurance claims division of Automall Network for 18 years. "As a result, if you only run the CarFax, then you may not see the whole picture if an accident happened while under a policy by those insurers.

"In addition, it is also important to check the lien history on a vehicle, especially if buying privately, or you may one day see the vehicle get repossessed. If buying through a dealer, there is additional protection, but still who needs the hassle?"

Automall Network ran the Audi vehicle specifications and claim details through their online diminished value calculator called to find that the S3 should have sold for over $5,000 less due to the accident at time of purchase.

The message in all of this is that consumers need to do more homework before purchasing a used car. Never simply take any seller's word for it that the car is fine. And remember that a safety certificate only means that the vehicle passes the minimum set of requirements to put it on the road as of when that safety was signed.

Automall Network is an auto broker. They have a dealers license, however don't work like a normal dealer - they work for the consumer. Just like hiring a real estate broker to help you buy or sell a home, those that hate car shopping can hire Automall Network to help them buy (or sell) a vehicle.

For media inquiries, contact Viraf Baliwalla at [email protected], (416) 249-5474 x303.

(Back to list)
© Automall Network Inc., 2017. Helping car buyers and sellers since 1999.
OMVIC Auto Dealer License #: 4989752.
Member: Used Car Dealers Association.
Privacy Policy

Automall Network Inc is a BBB Accredited Business. Click for the BBB Business Review of Automall Network