Car Shipping Scams – How Do They Work?

The car shipping industry is a very competitive business. Since car shipping services are mainly booked online, auto transport scams became a common problem. Let’s discuss how to avoid auto transport scams and what are the most common scams on the internet.

What are the most common types of auto transport scams?

Scam car shipping companies can get very creative when it comes to potential customers. These companies are usually unlicensed and uninsured. Typically they have a very poor reputation or operate their business in a very unethical manner. They tend to steal or buy potential customers’ information such as email and phone numbers and use it without authorization with the intent to attract these customers.

Scammers use different techniques to make money. They bait-and-switch prices after providing low car shipping rates.

Up-sell auto transport scam is another way to collect money from a potential customer. After the customer will receive a cheap quote and will pay a deposit he will be offered to pay more for the same service, otherwise, the deposit will not be refunded. The scammer will list additional charges and fees in the contract that were not discussed when they gave the customer an original quote.

Some scammers pretend to be another reputable car shipping company and collect money on the company’s behalf. Then they disappear and become unreachable.

Or they pretend to be a car seller on a website like Craigslist or Autotrader.com. After they find interested out-of-state buyers they are offering a “good deal” shipping service and collect the money before the fake sale will be finalized.

1. The bait & price switch scam

The most common auto transport scam is bait-and-price switch scams. In simple words, customers will receive a “good to be true” shipping quote, but last minute the car shipping company will call to raise their shipping rate or will cancel the order.

2. The up-sell auto transport scam

Up-sell scams are common in many industries. When it comes to auto transport service 50% of all transport companies will practice up-sell scams.

It is important to find a reputable company that is offering a rate lock guarantee as ShipCar24, otherwise, you will most likely become a victim of the up-sell auto transport scam.

3. The same or similar company scam

Another form of auto transport scam is when a car transport scammer pretends to be a reputable auto transport company. They will introduce themselves as agents of a reliable auto transporter. They will be offering a shipping service for a very affordable rate and will collect an upfront deposit or even full payment. After this customer will not be able to get a hold of them.

It is important to ensure you call or email the company by using information from reliable sources such as Better Business Bureau, Yelp, or direct company websites such as shipcar24.com.

4. Fake car selling and shipping scams

Another one is a car selling and shipping scam. These scams can impact people who are looking to buy a vehicle online. Scammers post a vehicle for sale on the websites such as Craigslist, OfferUp, Facebook Marketplace, or Autotrader.com.

Some of the fake sellers will be offering very budget-friendly car shipping services and will collect the money for shipping upfront before the fake sale will be finalized. Then this person will ignore any phone calls and emails from the buyer.

5. Car shipping hostage scam

Some car transport scams can involve vehicle hostages. This is a very unpleasant and stressful experience for the vehicle owner. Usually, the car shipper will give you a very low quote and after your vehicle will be picked up they will not deliver it until you will pay them more money.

Scammers may request money to be sent by non-refundable money transfer services such as Money Gram, Western Union, Zelle, Cash App, Venmo, or even wire transfers or bank deposits.

They will store your vehicle in an undisclosed location and will claim that you need to pay storage fees and redelivery fees.

Most often this may happen when you hire a carrier directly. Usually, carriers will not offer any formal contract that will not lock your car’s shipping rate. This can lead to a change in the car shipping rate later. Most of the carriers do not advertise and you can’t even leave them a review or file a complaint with BBB.

How does the auto transport industry work?

When you will start looking for an auto transport service, the journey will start on the internet. You will google a key phrase such as “shipping my car from California to Florida” and this will lead you to different car shipping companies. Some companies are auto shipping brokers, some are motor carriers and some are scammers that will collect your information and will sell it as a transport leads to multiple companies. It is important to understand the difference between a broker, carrier, and lead provider so that you share your information only with the company you trust.

Should you hire a car shipping broker?

The safest way to ship your vehicle is through licensed and bonded car shipping brokers such as ShipCar24. A reputable broker will make sure your vehicle is transported by a reliable car carrier company that is fully licensed, insured, and has a great performance rating.

The broker will offer you a contract and will schedule your vehicle’s pickup within the requested time frame. Brokers will usually provide you with timely pickup and delivery updates and will be your guide through the entire car shipping process.

In case of a car shipping damage claim, they will provide you with the carrier’s insurance information or will help to settle a claim with the carrier directly.

Brokers are charging broker fees but you get professional, hassle-free car delivery service. Broker fees vary depending on the route, vehicle type, and payment terms. Most brokers accept electronic payments such as credit and debit cards. Some, like ShipCar24, are offering a rate lock guarantee and no upfront payment option until the shipping will be secured with a carrier.

Can you trust car shipping carriers?

Shipping your vehicle with a car carrier directly can become a negative experience. Most of the carriers do not offer a formal contract. Since you will not have a formal contract, that means they will not guarantee rate lock or any specific shipping time frames or terms. They can refuse to transport your vehicle at any time, as there are no obligations. Just a verbal agreement is not providing you with any form of security and can lead to a disappointing car shipping experience.

Since customers are not experts, they may have a hard time checking on the carrier’s license and insurance. This may lead to an unpleasant circumstance where the vehicle can be shipped without insurance. The vehicle can even be stolen or held hostage. If something will happen to your vehicle during transport, it is very unlikely that the carrier will share their insurance information.

How to avoid car shipping lead providers?

The most unfortunate car shipping experience can happen when you get a quote on the website of the car shipping lead provider. After you will insert your information, it will be sold to multiple car shipping providers that are usually practicing auto shipping scams and have very bad reputations.

It is important to check if the company you intend to hire has a physical location and has good reviews from trusted platforms such as Google, Yelp, or BBB. If you cannot find this information, do not get a quote on this website, because your information will be sold to scammers and your phone and email will be spammed.

How to avoid auto transport scams?

Now let’s discuss auto transport companies to avoid and how to avoid being scammed by them. It is very challenging to distinguish a car shipping scam from a legitimate car shipper. Because auto transport scammers have very professionally made websites and agents that have excellent communication skills, they may sound very knowledgeable about the car shipping process.

However, if to conduct proper research about the service provider there are good chances of being able to make the right selection and ship your vehicle with a reputable car transport company. Some tips will help you to make the right decision.

1. Do your research

The first step once you launch a car shipper’s website check on the auto transport services they offer. Check if they are car shipping brokers or carriers.

If you cannot find this information, most likely this is a third party that is gathering information for auto transport leads. You want to avoid those.

2. Gather all possible information about the car transport company

First of all, any legitimate auto transport company will have a name, logo, address, and phone number listed on their website. A good company will always disclose if they are brokers or carriers. If you can’t find this information, then better leave the website immediately as you reached out to the car shipping lead provider.

3. Check for MC # or USDOT # on FMCSA website

Every carrier must have MC or/and USDOT numbers. The broker is required to have an MC number and active broker bond of file on the FMCSA website. Every carrier is required to have a USDOT number.

Some carriers who are operating within one state are not required to have an MC number, but still are required to have a USDOT number. In addition to the USDOT number, local carriers might be required to be locally licensed. For example, in the state of California, they are required to have a CA number. This is a special number assigned by the CHP department.

USDOT and MC numbers can be used to search carriers on the FMCSA website. You will be able to see if the carrier is active, inactive or if his authority is in the process of cancellation or revocation. You can also check on his safety score and if he has insurance on file.

Now, when it comes to insurance this get’s a little bit tricky. Carrier is required to file only liability insurance with FMCSA, however, the cargo insurance policy that covers vehicles is not public information and you will not see it on the FMCSA website.

The only way to check on the carrier’s cargo coverage is to request a certificate of insurance from the carrier. Carrier’s insurance agency will disclose his coverage only if the carrier will approve this request. Usually, carriers share their insurance information only with brokers, not with customers. Therefore it is safer to ship your vehicle through the broker, as they will have access to the carrier’s insurance policy.

4. Check reviews on different review platforms

When it comes to choosing a service provider most people prefer to hire somebody reputable with a history of many positive reviews or by referral. One of the ways to avoid transport scams is to check if the company is registered and has reviews on Yelp, Better Business Bureau, and Google.

If you can’t find the company on any of these review platforms and can find it only on a platform similar to TrustPilot, this is not an auto transport service you want to use. Many scam companies are registered on TrustPilot. This is not a very reliable resource for reviews. Trustpilot doe not verify the company’s address or phone number. There are plenty of fake reviews from unregistered and unverified people. On the other hand, Google, Yelp, and BBB do call and check if the company is not fake.

5. Check on the company’s website

Most car shipping websites including shipcar24.com will have a car shipping quote calculator with an instant car shipping quote feature.

This is how it works. After you will type in all the required information, the calculator will display a car shipping rate and will allow you to book the service online. If this feature is not available there is a chance the company is a car shipping lead provider that will sell your information to multiple companies.

6. Сheck for contact information and physical address Google

Any licensed and insured company must have a physical address. Usually, after you google a company’s name you will find their information including, address, phone number, and online reviews on Google, Yelp or BBB. If the company is not registered with Google this is direct sign that you better avoid using their services..

7. Check if they are registered with Better Business Bureau

Better Business Bureau is another platform where any reputable company will have a profile. BBB will display any complaints ever filed against a business. If the potential car mover is not registered with BBB this is another reason to look for other options.

8. Check payment methods and conditions

Since most car movers are brokers, they are usually offering two payment options. One is payment in full via credit card and the second option is a split payment option.

Payment in full via credit card is normally collected after the vehicle shipping service has been scheduled with a carrier. Some brokers, however, still collect full payment before they even found a carrier.

The split payment option is structured a little bit differently. A smaller portion of the total balance due is usually collected once the broker finds a carrier for the customer’s vehicle and provides the customer with an available schedule. The remaining balance will be due on delivery to the driver in form of certified funds such as cash or a cashier’s check

ShipCar24 is not collecting credit card details until we schedule a service with an actual carrier. This gives their customers a piece of mind and develops more trustful relationships.

9. Ensure that the transport company is bonded and has a cargo insurance

Depending if you are hiring a car shipping broker or direct carrier you will be dealing either with broker bond or carrier’s cargo insurance.

You can easily check on a broker’s bond on the FMCSA website by entering the broker’s MC number. However, you will not see the carrier’s cargo insurance information because this is not public information.

Every licensed carrier is required to have a minimum of $750,000 in liability insurance coverage. And it can be checked on the FMCSA website. However, liability insurance does not cover your vehicle. Cargo insurance does. Therefore you will not be able to check on the carrier’s insurance unless you will hire a licensed broker or the carrier will provide you with their insurance certificate.

Be cautious of guaranteed and quick pickup and delivery

One of the very common auto transport scams is an empty promise about a super quick and convenient schedule for a “good to be true” shipping rate.

We are all used to convenient and guaranteed services provided by Amazon, FedEx, and UPS. Unfortunately, car transport service is structured in a completely different way and guaranteed pickups and deliveries are almost impossible.

This is because most of the carriers are small individual companies that have one truck and one driver on a particular route. If something will cause a delay to this driver, such as traffic, weather, or vehicle maintenance service, your vehicle’s pickup may be delayed and even postponed for the next day. Normally at least a two-day pickup and delivery window are requested for any vehicle relocation service.

Exact day pick up is possible and sometimes is provided for an extra charge. In case the carrier will have a delay, a broker will hire a local towing to pick up your vehicle to ensure it is picked up within the requested day.

If you are looking for a more convenient schedule it is always a great idea to hire a local broker company that is offering a local drop-off option.

10. If the car shipping price is too low, it’s likely a scam price

Vehicle shipping companies are providing quotes based on the current market rates. However, some companies prefer to provide quotes that are below market rates. This usually attracts people who never shipped a car before. They believe that there can be car shipping deals.

The car shipping industry is very dependent on the market, therefore shipping rate margin should be within a similar range. It is like a home loan interest rate. If the national average is 5% you cannot buy a house with a 2 % interest rate. If you received a car shipping quote that is 20%-30% cheaper than all other quotes, this is a warning sign.

11. Avoid paying upfront before the car is scheduled for pickup

Once you book your car shipping service, most reputable companies will not collect any money until they will secure your shipment with a carrier and will provide you with a pickup and delivery schedule. Then they will send you a payment request based on agreed payment terms.

If the car transport company is requesting upfront payment even before they found you a carrier, this might be an auto shipping scam. Stay away from this company.

12. Review the contract to determine the terms and nature of the service

Once you book your auto transport service, car shipping brokers will usually offer you to sign their shipping contract. It is a wonderful idea to review all the details and check on their shipping terms and conditions.

Important things to look at in the car shipping contract:

Who is your service provider? Broker or somebody else? Is there an MC number listed?
Is insurance coverage included in your shipping rate?
What are order cancellation terms and conditions
Make sure the shipping dates are listed
If all your shipping details such as address and commodity details match?

After reviewing contractual terms you can always contact your shipping agent and ask additional questions related to the agreement to ensure you both are on the same page.

13. Avoid car shipping brokers that don’t provide you with carrier’s information once service is scheduled

After the car shipping company collected your credit card details or payment, they are required to provide you with carrier information. If you did not receive it, this might be another car shipping scam sign.

Before processing a payment, we highly recommend verifying if you will receive a carrier’s information right after this payment will be processed. If otherwise, look for another reputable car shipper.

14. Avoid car shipping companies that collect only full payment

Most car shipping service providers do offer partial and full payment options. If the company of your choice offers only payment in full option, this might be another auto transport scam. If they allow partial payments this is a good sign.

If you choose to proceed with a partial payment option you can pay a small portion of the total balance due via credit card and the remaining balance on delivery in form of cash or a cashier’s check.

Some people do not feel comfortable paying in cash, therefore they choose the full payment option. However, if you will choose to pay in full via credit card, be prepared to process full payment when the car shipping agent will contact you with an available pickup and delivery schedule. After you will process the payment a reputable car shipping broker must provide you with the carrier’s information.

15. Avoid companies who are claiming that they have $1,000,000 or more in cargo coverage

When you ship an expensive vehicle you do care about the carrier’s cargo insurance limits. Very few companies have a cargo insurance limit of $1,000,000 or more. These are usually companies that are offering enclosed auto transport services for exotic vehicles. Expect to pay 40%-50% more for the shipping if you wish to use this type of high-end carrier service. These carriers are not always available, therefore it takes longer to schedule a pickup and delivery with them.

These companies who promote that they hold $1,000,000 in cargo insurance coverage are most likely providing misleading information. This figure applies to liability insurance coverage, not cargo. Liability insurance does not cover your vehicle. Cargo insurance does.

Typical cargo insurance coverage for an open car carries is:

1-3 car hauler: between $100,000 and $150,000

4-7 car haulers: between $150,000 and $250,000

7-10 car haulers: between; $150,000 and $350,000

Typical cargo insurance coverage for an enclosed car carries is:

1-3 car hauler: between $250,000 and $350,000

4-7 car haulers: between $250,000 and $500,000

7-10 car haulers: between; $250,000 and $1,000,000

As you can see the most common insurance coverage for open and enclosed car carriers is $250,000. Some may have a higher cargo coverage between $350,000 and $500,000 but this is not very common.

Another factor to look at when you choose a car carrier is their insurance deductible. The typical deductible for car haulers is between $1000 and $5000 per claim. That means that if you will file an insurance claim, the carrier has to pay this amount to activate their coverage. If they will refuse to pay, their insurance will not pay for the damage.

When you hire a good carrier damages are very unlikely to happen, but if this unfortunate situation will happen, a car shipping broker such as ShipCar24 will be your guide and will help you handle the claim.

What to do if you become a victim of a car shipping scam?

There are some steps you can take if you become a victim of a car shipping scammer.

File a customer complaint with BBB
Leave negative reviews on Google, Yelp, and BBB
File FMCSA company against the company if they are licensed carrier or broker
File a complaint with the local Attorney’s General Office
File a complaint with Federal Trade Commission
File a small claims court complaint
Report the company to the local police department

Conclusion

Unfortunately, almost every third customer who is looking to ship their vehicle is under threat of being scammed. This is because many people ship their vehicles once in a lifetime and do not have enough information about how car shipping works. By educating yourself about the car shipping process you decrease the chances of being scammed.Therefore, here at ShipCar24 we take our time to educate our customers to ensure they receive the best car shipping experience and excellent customer service. Get an instant quote online by visiting shipcar24.com or call us at 916-701-2701.