Used car dealers posing as private sellers online

Man thought he was buying a car from a student, but it was from a Galesburg dealer

Used car, Craigslist
A used car for sale on Craigslist includes the phone number for Speedy Auto Sales in Galesburg even though the listing doesn't mention the dealership (Dec. 8, 2017)


GALESBURG, Mich. (WOOD) — Like a lot of used car buyers, Dave Knoth was desperate for reliable wheels but worried about getting ripped off.

“I’m just trying to get my family something that’s dependable,” the Plainwell husband and father of two explained.

He was excited when he spotted a 2003 Saab listed on Craigslist.

“I don’t like dealing with (used car lots),” he told Target 8. “I trust an individual more than I trust a company or corporation. I’m a person-to-person kind of guy.”

Knoth met the seller, a Western Michigan University student, in a grocery store parking lot in Kalamazoo. A mechanic by trade, Knoth checked the car over before buying it for $2,000. But one month and 500 miles later, the Saab died. Knoth forked over another $1,600 to replace the ignition coils and timing belt, among other problems.

He also called the seller to complain. That’s when the student revealed Knoth had really bought the car from Speedy Auto Sales, a tiny used car lot off I-94 in Galesburg.

It was at that point that Knoth read over the vehicle title his wife had signed.

VICTIM’S ADVICE: READ EVERYTHING

“Speedy’s Auto,” read Knoth, pointing to the seller’s name on the title. “If I had looked at the title, I would have realized it wasn’t coming from a college kid.

“So pay attention, read everything,” he continued.

“I didn’t deal with the garage down there,” he added. “I never talked to them. I was buying this car from the kid that goes to Western.”

Knoth told Target 8 he would not have bought the Saab if he knew it came from a dealership.

“I don’t trust ’em,” Knoth said of used car lots. “I kind of feel taken advantage of.”

When Target 8 investigators called the college student to get his side of the story, he told us to take our questions to Speedy’s.

DEALER CLAIMS HE DIDN’T KNOW ABOUT SALE

The dealership’s owner, Gil Gonzalez, confirmed the student worked for him, buying cars at auction under Speedy’s dealer’s license. But Gonzalez said he had to fire the student for not following the rules.

“I didn’t know anything about that deal,” Gonzalez said, referring to Knoth’s case. “I told (the employee) cars have to be sold here at the car lot and you have to make sure the customer knows that it’s being sold at a car lot.

“He wasn’t doing things by the book, and I say everything has to be done by the book,” he said.

Gonzalez claimed he had no idea the student was selling cars online and off the lot until after the fact.

But his signature is on the title for the Saab.

“I mean, there’s a bunch of titles that I sign,” Gonzalez said when confronted with the paperwork. “I mean, I can’t keep track of every car that comes through.”

The car lot owner also said his other salespeople make it clear any vehicles they post online come from Speedy’s. However, Target 8 discovered listings on Craigslist and Facebook that had the dealership’s phone number on them even though they made no mention of Speedy’s. Those ads were under the “for sale by owner” section.

“The reason why they do that is because if you’re a dealer, most people don’t look to the dealer stuff,” Gonzalez explained. “Dealers are usually more expensive and a lot of people don’t trust dealers.

“Once somebody’s interested, we make sure they know that it’s coming from Speedy’s Auto Sales,” he continued.

STATE: MISREPRESENTATION NOT UNCOMMON

The Michigan Secretary of State’s Office, which licenses and oversees Michigan automotive dealers, plans to investigate the Saab deal.

“We’ve been finding that it’s not uncommon for dealership to misrepresent themselves online on platforms such as Craigslist,” said Fred Woodhams, spokesperson for Secretary of State Ruth Johnson.

“A licensed auto dealer should be selling vehicles from their location. It should be very clear who’s selling that and any attempt to misrepresent who’s selling the vehicle would be very problematic for us,” he continued.

Woodhams declined to comment further on the disputed Saab sale because the department has yet to investigate that case.

“We encourage anyone who thinks they were taken advantage of to file a complaint with us,” he said.

“I think it’s clear that we’ll have some (investigators) out to talk to the dealer about the transaction that occurred,” he added.

It won’t be the first time the state examined a Speedy’s deal. In 2015, the state cited the dealership for failing to apply for a vehicle’s title within 15 days of the sale.

“I had another employee,” Gonzalez told Target 8 when asked about the prior violation. “He was doing things that are shady, and that’s why I got rid of him also. … I guess he allegedly rolled back on odometer.”

But Gonzalez insisted his dealership does things legitimately and said he wants to make things right with Dave Knoth.

“If you come to Speedy’s, we take care of the customer. If there’s a problem with your car, bring it back and we’ll try to work it out with you,” he said.

HOW TO PROTECT YOURSELF WHEN BUYING A CAR

The Secretary of State provides clear, step-by-step guidelines on how to buy a vehicle.

In a private sale, it’s critical that you review the vehicle’s title carefully, in part to ensure that the seller is the actual owner of the vehicle.

In addition, the state says it’s best if you and the seller go together to a Secretary of State branch to complete the title transfer.

If that’s not possible, then before you buy and leave with the vehicle, make sure:

  • The seller gives you the title. If you don’t have the title, you don’t own the car.
  • There is no outstanding loan against the vehicle. A title cannot be transferred until the vehicle loan is fully paid.
  • The odometer reading entered by the seller and vehicle identification number (VIN) on the title match the vehicle’s odometer reading and VIN.

Also, before you buy, make sure to get the vehicle inspected by a mechanic and be sure to check its VIN number.

Services like Carfax can run a VIN number and provide you with the vehicle’s history, including the number of owners, maintenance history and any crashes.

“I just don’t want this to happen to anybody else,” Dave Knoth said. “I thought I was getting a good deal, and that good deal ended up costing me twice what I paid for the car. So instead of $2,000, now I’m $4,000 into it. Now I’m stuck with it.”

Knoth was able to get the Saab running again after the initial breakdown, but the car has since died on him again.