Consumer Alert: Be Wary of Unlicensed, Online Auto Sales

May 02, 2022 at 12:07 pm by Voice Wire


Consumer Alert: Be Wary of Unlicensed, Online Auto Sales

State Agencies Remind Consumers to Always Buy from Licensed Auto Dealers, Salespersons

NASHVILLE – The Tennessee Department of Commerce & Insurance (“TDCI”), the Tennessee Motor Vehicle Commission, the Tennessee Attorney General’s Office, and the Tennessee Department of Revenue are alerting consumers to the recent increase in consumer complaints related to online purchases of vehicles in Tennessee.

Vehicle sales by unlicensed companies in Tennessee are prohibited. However, complaints show that Tennessee consumers are buying vehicles online from unlicensed individuals or unlicensed out-of-state companies. Consumers have filed complaints related to using online sites to purchase vehicles without first inspecting or driving the vehicles beforehand. Those vehicles arrived with damages not previously disclosed in the online advertisements. Additionally, some buyers experienced problems obtaining a clear title and registering the vehicles purchased online.

The licensing system administered by the Tennessee Motor Vehicle Commission is designed to promote responsible business practices and protect Tennessee consumers. Unfortunately, there are few remedies for frustrated consumers after purchasing a vehicle from an unlicensed seller who operates online and may not be located in Tennessee.

“We understand the urgency some buyers feel while searching for used vehicles online,” said General Herbert H. Slatery. “With increased demand comes increased risk of dealing with a dishonest broker. Take your time, check for a license before you buy.”

“As we head into graduation season and summer vacation, shoppers will want a new vehicle for students to take to college or for family vacations,” said Motor Vehicle Commission Executive Director Denise Lawrence. “We've discovered that some consumers are frustrated because they’ve given their hard-earned money to online salespeople who do not have either a valid Tennessee dealer’s or salesperson’s licenses. While it might be inconvenient to wait and buy a vehicle from a licensed salesperson in person, consumers will be glad they waited in order to avoid the bitter aftertaste of a supposedly good deal.”

It seems some dealers, in a rush to make quick sales, are offering cars before they have even acquired the title to vehicles. This problematic practice is compounded by a prevalent tactic found both online and or in-person called “curbstoning,” when a seller or dealership pretends to be a private seller.

Curbstoning occurs when a person engages in the act of buying and selling used automobiles without a license, insurance, bond, sales tax number, Federal tax ID, proper local permits or legally established place of business. By curbstoning, a dealership attempts to avoid the regulations governing used car sales so that it can move inventory quickly.

How do you prevent being the victim of a curbstoner? Always buy from a licensed seller. Tennesseans can check the status of the license of an auto dealer or an auto salesperson by visiting verify.tn.gov. Remember, licensed dealers are required to disclose that they are a dealer in all forms of advertising (including social media) by including either their business name or license number. If you are experiencing an issue regarding a motor vehicle transaction, you may file a complaint with the Tennessee Motor Vehicle Commission or call (615) 741-2711.

Additionally, consumers who believe a business, including a dealership, is engaged in deceptive practices can file a complaint online with the Tennessee Attorney General’s Division of Consumer Affairs or call (615) 741-4737.

The Tennessee Department of Revenue advises that the following options are available for consumers who are not able to resolve title issues with a dealer.

  1. The surety bond process, which the Department of Revenue handles, or 
  2. The certification of ownership process, which is done through the local county clerk. This questionnaire can help you determine what to do.

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ABOUT THE TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE
Fostering fair marketplaces, public safety, and consumer education that promote the success of individuals and businesses while serving as innovative leaders. Our divisions include the State Fire Marshal’s Office, Insurance, Securities, Regulatory Boards, Tennessee Law Enforcement Training Academy, Tennessee Emergency Communications Board and TennCare Oversight.


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