Buying a used car in the Philippines? Here’s how to dodge scams

Buying a used car is an excellent option for first-time car buyers/drivers or those on a budget. First, it will save you a lot of money, and second, the occasional damage in the form of scratches, wear, and tear won’t hurt as much.

However, buying a second-hand car is as painful and laborious as buying a new car; sometimes even more. One has to go through the same process -

• Setting a budget
• Checking the vehicle’s history
• Inspecting the vehicle
• Taking a test drive
• Investigating car ownership documents
• Negotiating
• Getting a car insurance

In addition to all this, a prospective used car buyer must always stay protected from fraudulent sellers. Such fake/corrupt sellers make it difficult for buyers to find a legitimate deal, especially in this growing online marketplace.

It doesn’t matter if you are a first-time buyer or someone looking for an upgrade, here are some tips to stay safe and ensure you can find the best deal possible without any nasty surprises.

Also Read: Used car loan: Common mistakes to avoid

#1 Do your homework Research the market

Before setting off in your new used car, it is important to do some groundwork. Look up the car’s make, model, and the year of the vehicle you are eyeing and understand its price range. In case, the deal seems too good to be true, it probably is a scam.

Note, that scammers usually lure buyers with surprisingly low prices, only to vanish after receiving payment. We suggest cross-checking prices at reliable online platforms like Carmudi, thus avoiding sketchy sellers.

#2 Inspect the documents carefully

One of the biggest indicators of a potential scam in a used car transaction is its legal paperwork. Our suggestion is to always ask for the car’s Original Receipt (OR) and Certificate of Registration (CR). Do ensure, all the submitted documents are legitimate, up-to-date, and cross-verified by LTO.

A useful tip is to use LTO’s online and text inquiry service to check the vehicle’s history for potential theft and misconduct. Also, be cautious of sellers who do not possess these documents and even the ones without original papers. Remember these are major red flags, especially if they claim they’ll provide the proper paperwork after the sale.

#3 Beware of ‘Curbsiders’

In the Philippines, ‘curbsider’ refers to unlicensed dealers who pose as private sellers to avoid taxes and other legalities. Such dealers do not put the car under their name and often hide crucial details about the car and its condition. Tampering with the odometer is a common practice among such dealers.

Remember, if the seller isn’t the registered owner of the vehicle, just walk away.

#4 Never pay before seeing/inspecting the car

One of the most common used car scams involves the seller asking the buyer for a deposit or full payment before even showing the car in person. Completely avoid making any such payments. First, thoroughly inspect the car and the documents.

Remember. If a seller is insisting too much on paying a reservation fee or deposit upfront, especially via an online transfer, consider it a major red flag.

#5 Check the vehicle’s history

It is a fact that most used cars sold in the Philippines are ex-taxis, rental cars, or fleet vehicles. Such vehicles are often exposed to harsh working conditions leading to wear and tear and in some cases even accidents. It is recommended to check the service record of such cars and if possible also run a check with the Philippine National Police (PNP) Highway Patrol Group to ensure there is no criminal activity involved.

Also Read: How to calculate your used car loan payments: Tools and tips

#6 Get a trusted mechanic

It doesn’t matter how savvy you are with cars, bringing along a trusted mechanic for a pre-purchase inspection is a smart move. As they can detect signs of damage that might not be visible to an untrained eye, such as previous accident repairs, flood damage, or worn-out parts. A mechanic can also spot odometer tampering, a common scam tactic.

#7 Test drive the vehicle thoroughly

Always request the seller for multiple test drives. Take the car for a spin on different terrains and pay attention to how it handles each. Here’s a checklist -

• Does the engine sound smooth?
• Do the brakes respond well?
• Are there any unusual noises?

Remember, a test drive not only helps identify potential mechanical issues but helps give a better look & feel of the car.

#8 Inspect the car physically

Don’t just rely on the pictures shared by the seller, it is always better to inspect the car in person. Here are a few tips -

• Check for the signs of rust
• Check for mismatched paint
• Check for uneven wear & tear
• Look under the hood
• Inspect the undercarriage for leaks & rust

#9 Ask for a Deed of Sale

What is a Deed of Sale? It is a legal document that transfers ownership of the vehicle from the seller to the buyer. Make sure this document is notarized and includes photocopies of the seller’s government-issued IDs. Never agree to purchase a car if the seller refuses to provide this document

#10 Verify the seller’s identity

When buying from a private seller, always verify their identity. Scammers can create fake listings and fake identities to trick you into thinking they're legitimate.

​#11 Be cautious of no-picture listing

No pictures and vague descriptions of a used car in an online listing is a red flag. Stay away from such posts. A legitimate seller, on the other hand, always provides detailed information and images of the car’s interior, exterior, and engine.

#12 Always opt for reputable sources

Always remember to buy a used car from a certified dealership or a well-known used car marketplace. Several reputable dealerships in the Philippines offer certified pre-owned cars that are inspected and come with warranties, thus making them a safe option.

#13 Watch out for odometer tampering and flood damage

One of the oldest tricks in the book is odometer tampering, where sellers roll back the mileage to make the car appear less used. Thus inflating the car’s price significantly in the used car market. Here are a few tips to check for odometer tampering -

• Compare the car’s condition with its stated mileage
• Check the seat, pedals, and steering wheel condition

As for the flood-damaged cars, they are sold at a cheaper price compared to the rest because such vehicles have long-term issues. Here are some common signs of water damage -

• Musty smell
• Rust under the dashboard
• Discoloured upholstery

#13 Thoroughly inspect the cabin

Apart from the car’s exterior, the interior gives clues about its history and condition. When inspecting the interior, do check the following -

• Wear on the seats, pedals, and steering wheel (see if it matches the car's mileage)
• Inspect the dashboard and electronics (ensure everything works as it should)
• Check for any unpleasant odors (moldy smells)
• Check for stains on the seats and carpets

#14 Know your rights as a buyer

A consumer in the Philippines has certain rights when purchasing a used vehicle. Under Republic Act No. 7394, or the Consumer Act of the Philippines, the buyer is protected against deceptive, unfair, and unconscionable sales practices.

What to do if you encounter a scamster? If you encounter a seller engaging in fraudulent behavior, file a complaint with the Department of Trade and Industry (DTI) or the LTO.

#15 Negotiate, but be realistic

Once you've completed the inspection and are satisfied with the vehicle, it’s time to discuss the price. Negotiating the price is a common part of buying a used car, but be realistic in your expectations.
However, don't expect to get an overly generous discount. While it's reasonable to ask for a fair price reduction.

Bottom line

Buying a second-hand car in the Philippines requires awareness and a bit of know-how on the buyer's part. By following the above-mentioned pointers —like verifying the vehicle’s documents, avoiding suspicious sellers, and ensuring a thorough inspection—you can avoid falling into a scam. Whether you're buying from a private seller or a dealership, always prioritize safety and transparency.

Also Read: Should you insure your old car? Let’s find out