10 Worst States for Auto Fraud [2021 Case Study]
What You Need To Know!
The two leading businesses behind auto-related scams are auto maintenance shops and car dealerships.
The last thing you want is to be scammed into purchasing a lemon or signing a lease with undisclosed charges when buying a car. However, if you live in one of the worst states for auto-related fraud, you are at risk of being scammed when buying a car or having it repaired.
Even if you know how to get cheap car insurance to save on repairs or a new car, the money saved still might not cover the exorbitant charges a car repair shop might tack onto your bill.
To avoid being scammed or falling victim to fraud, it's essential to familiarize yourself with common scams.
That's why in this article, we will cover the following topics in addition to the worst states for car-related fraud:
Auto fraud and scams in America
Advice from the experts
Frequently asked questions
If you are ready to find out what the top scamming states are for vehicle fraud, read on.
States with the Most Vehicle Fraud and Scams
Researchers used data from the Federal Trade Commission (FTC) to discover what states had issues with car-related scams and fraud.
Calculating the total number of cases from the percentages given, our researchers then divided the resulting numbers by the number of residents from the Census Bureau to find the rate per one million residents. Many cases of auto-related fraud involve dishonest business practices scamming customers.
You can see the final results in the graphic below.
The 10 top states for auto-related fraud average 315 cases per one million residents
So what are auto-related cases? While not always hard fraud, many auto-related complaints are about soft fraud cases, such as scams and dishonest business practices.
The FTC defines auto-related cases in its data study as the following:
“Misleading or deceptive claims regarding auto prices, financing, leasing or warranties; repair/maintenance issues with newly purchased used or new cars, including dissatisfaction with service provided by auto mechanics; price fixing and price gouging concerns against gas stations and oil companies; etc.”
Many of the things on this list count as deliberate scams, which means these complaints could be filed for unfair and deceptive business acts and practices. While there are laws protecting consumers, consumers aren't always aware they are being scammed.
That's why after we go more in-depth into the states with the most auto-related fraud, we are going to go over common scams and what you can do to protect yourself when buying or repairing a car.
#10 – Virginia
Annual Auto Fraud Cases: 2,376
Auto Fraud Cases Per 1M Residents: 278.4
Number 10 on our list is Virginia, with a total of 278 auto-related cases per one million residents. Auto-related fraud and scam cases make up 3% of total fraud cases in Virginia.
Since the majority of fraud cases are identity theft or imposter scams in each state, 3% is a significant percentage of auto-related cases for a state.
#9 – New Hampshire
Annual Auto Fraud Cases: 404
Auto Fraud Cases Per 1M Residents: 297.1
New Hampshire has a total of 297 auto-related cases per one million residents, placing it as 9th on our ranking of the worst states for car fraud. While there were only 404 auto-related cases, they made up 4% of total fraud cases in New Hampshire.
#8 – Georgia
Annual Auto Fraud Cases: 3,221
Auto Fraud Cases Per 1M Residents: 303.4
The state of Georgia had over 3,200 auto-related cases, making up 3% of total fraud cases in the state. With so many drivers being scammed, it's no surprise that there is a total of 303 auto-related fraud cases for every one million Georgia residents.
Even if Georgia didn't have a high scam rate, it's still important to have the best car insurance to cover any pricy auto shop charges.
#7 – Ohio
Annual Auto Fraud Cases: 3,554
Auto Fraud Cases Per 1M Residents: 304.0
Ohio has a total of 304 auto-related cases per one million Ohio residents, which places it as No. 7 in America. With 3,554 cases making up 4% of fraud cases, Ohio residents need to be careful when buying cars and visiting auto shops.
#6 – Maryland
Annual Auto Fraud Cases: 1,893
Auto Fraud Cases Per 1M Residents: 313.1
Maryland has 313 auto-related cases per one million Maryland residents. This number placed the state rank as 6th in America for auto-related fraud and scams.
To protect yourself from high auto repair bills, make sure you have good Maryland car insurance coverage and vet auto repair shops before bringing your car in.
#5 – Missouri
Annual Auto Fraud Cases: 1,940
Auto Fraud Cases Per 1M Residents: 316.1
Missouri ranks 5th in America for auto-related scam cases. With almost two thousand auto fraud cases in a year, Missouri had a total of 316 auto-related cases per one million residents.
This is a high rate of auto-fraud cases, so drivers in Missouri should make sure to familiarize themselves with warranties and leases at dealerships before signing.
#4 – Connecticut
Annual Auto Fraud Cases: 1,137
Auto Fraud Cases Per 1M Residents: 318.9
Connecticut drivers should make sure they are reading the fine print or leases and auto-shop bills, as there is a total of 319 auto-related cases per one million Connecticut residents. With over a thousand reports of possible auto-related fraud, Connecticut ranks as No. 4 on our list.
#3 – Florida
Annual Auto Fraud Cases: 7,238
Auto Fraud Cases Per 1M Residents: 337.0
Florida drivers have more to watch out for than just alligators crossing the road. Drivers need to be aware of scams that might happen at their local dealerships or auto repair shops.
With over seven thousand auto-related cases in just one year, there are plenty of scam artists waiting to take advantage of Florida drivers. Per just one million Florida residents, there are 337 auto-related cases of fraud.
#2 – Delaware
Annual Auto Fraud Cases: 329
Auto Fraud Cases Per 1M Residents: 337.9
Delaware comes in at 2nd with an average of 338 auto-related fraud cases per one million residents. Because Delaware is such a tiny state, these many auto-related cases mean that residents should take the time to background check dealerships.
Hopefully, most of these complaints are related to just a few auto shops and dealerships, not the majority in Delaware.
#1 – Nevada
Annual Auto Fraud Cases: 1,066
Auto Fraud Cases Per 1M Residents: 346.1
The state of Nevada ranks as No. 1 on our list of the worst states for vehicle-related fraud. With almost 350 cases of auto-related fraud per one million Nevada residents, Nevada has quite a few scammers.
Nevada drivers should keep this in mind when leasing new cars or getting car repairs. Check reviews and recommendations before visiting a dealership or auto repair shop, and always read what you are signing.
Beware! Auto Fraud and Scams Across America
Auto fraud and scams happen all across America, not just in the 10 worst states for auto fraud. In 2020, there was an estimated 2,670,873 auto cases related to fraud and scams in America.
How are drivers scammed out of their hard-earned money? Take a look at the graphic below to see the most common types of scams that drivers fall victim to every year.
The two most likely ways that drivers get scammed are through auto repair shops or car dealerships. Unless you are a savvy mechanic or lease expert, it is easy for scammers to slip in confusing technology to add on fraudulent charges.
For example, most car manufacturers do the vehicle prep work of preparing a car for sale, such as performing road tests, vacuuming and washing the car, and removing protective plastic. The cost of the service is usually included in the price of the car, but some dishonest dealerships will charge for this service as if they did it themselves.
While this isn't illegal, it's not a great sign that a dealership is charging a customer twice for a service. Unless you can be sure that a dealership did the prep work themselves, you might want to consider buying a car elsewhere if you see this charge tacked onto your bill.
The best way to avoid being scammed is to do your research beforehand. Read reviews and ratings to see what other customers think about a company's service and prices, or check Better Business Bureau (BBB) ratings if available.
If an auto shop or dealership has any history of hiking up prices or fraudulent dealings, doing a bit of research beforehand will usually reveal this. It's also prudent to familiarize yourself with the financial aspects, such as fair interest rates and terminology.
Avoiding Fraud at Car Dealers!
To help you feel confident when shopping for a new car here are some tips from an automotive expert and founder of Car Leasing Concierge and My Best Car Price Paul Maloney.
“When the car salesperson introduces you to the finance/business manager to do the paperwork, they’re introducing you to the money-extracting machine of the car dealerships and this person is not just going to tally up everything and send you on your merry way in a hurry!
Get comfortable, because this person is going to try and sell you everything from the Brooklyn Bridge to warranties that cover absolutely nothing along with the window etching, pinstriping, rust-proofing, paint sealant, etc., that will only end up siphoning all the money out of your wallet.
This is where the most money is made on just about every deal. Don't be pressured into something you’re not certain you will need. Before you know it, your car payment can quickly turn into a mortgage payment.
These finance people all work on commission and to make their quota they must sell on average $900 to $1,200 in accessories, as well as bump up your interest rate to total somewhere around $3,000 in extra profit. So guess why it takes so long to sign everything. They must go through their mandatory pitch.
They will try to make it sound like if you don’t take these coverages, you may be at risk of forking out thousands of dollars if something goes wrong.
Another way they try to convince you is to tell you, ‘You don’t have to pay for it all upfront. You can conveniently put it in your monthly payment to spread out the cost for only a few dollars more.’
This is when they jack up the cost without you knowing, in some cases making you pay almost double! Save yourself some time and money. If you really want these extras, you can easily buy them on the outside for a fraction of the cost.
Price is always key to buying a car, but if you don't have to know how to go about it the right way it's very easy for car dealers to steer you in the wrong direction.
Buyers should use tools that help them uncover the TIP or True Invoice Price, rates, and hidden incentives dealers try not to disclose. These amounts can save buyers hundreds to thousands of dollars below the actual invoice price.
Here are some fake fees that often get added unnecessarily to car transactions:
Documentation fees $100 to $800+
Processing fees $200 to $700+
Delivery fees $300 to $1,000+
Destination fees $500 to $1,300+
In addition, high-interest rates can also be a scam, forcing you to pay more for your car than it is worth.”
Frequently Asked Questions: Car Theft, Purchases, and Repairs
When it comes to car fraud and scams, a lot of people have questions about stolen vehicles. After all, a customer may unwittingly buy a stolen car or a car with stolen parts. Read on to see what the most common questions are about car fraud and stolen vehicles.
#1 – What state has the most stolen vehicles?
California. As one of the largest states in America, it makes sense that California has the most stolen vehicles. With so many drivers in California, there are plenty of cars for thieves to snatch.
#2 – What city in the US has the highest rate of car theft?
What city has the most carjackings? In our study of the 10 most stolen cars in America, we found that the metropolitan area with the highest rate of car theft was Albuquerque, New Mexico.
#3 – How many days do you have to cancel a car purchase?
You should always check the contract you sign, as it will state how many days you have to return the vehicle if there's a major issue (usually 2-3). You may have to pay extra to add this return period to your contract.
Asking about the car's return policy is vital, as a car starts losing value the instant you drive it off the lot. If you miss the return window, the car will be worth less than what you bought it for.
#4 – Why do car dealers rip you off?
Car dealers try to rip customers off to earn more in profits. They may try to pressure you into buying unnecessary services or signing up for a high interest rate. It's important to remember there are plenty of cars and plenty of dealerships that have better prices.
If you feel pressured, walk away, especially if you live in one of the most scammed states in America.
#5 – Can you sue an auto repair shop?
You can sue an auto repair shop if the work they did was defective and caused injury to you or other people. It is best to talk to a lawyer to see if you have a case before embroiling yourself in suing an auto repair shop.
Methodology: Finding the Worst States for Vehicle Fraud
To find the states with the most vehicle-related fraud, our team of researchers looked at 2020 FTC data released in 2021.
Since the FTC only listed percentages, not the exact number of auto-related fraud cases by state, our team calculated the number from the listed percentage and the total number of fraud cases for each state. This allowed us to get an accurate number of auto-fraud cases for each state rather than using percentages.
Because larger states with more residents will naturally consistently rank first as the worst states for auto fraud, our team pulled resident data from the United States Census Bureau to calculate the rate of auto-related cases per one million residents. This allowed for a more accurate depiction of which states have the highest rate of auto-related scams.
Regardless of where you live, it's essential to keep an eye out for suspiciously high pricing and shady contracts. If something seems off to you, don't use the shop or buy the car. It's better to have to spend some more time shopping around than being scammed out of your hard-earned money.
References:
Read the complete article from the link below
https://clearsurance.com/blog/worst-states-for-auto-related-fraud
Links that will help you get through the car buying, servicing, and insurance process a little easier
https://www.autoinsurance.org/best-insurance-providers-telecommuters/