BALTIMORE - You've probably heard of house flipping, but now there's a new way to make a quick buck in a lagging economy. They call it car flipping but it could turn your finances upside down if you're not careful.
When Rebecca Riehl wanted a new car on a tight budget, she turned to craigslist. After a lot of searching, she found exactly what she thought she wanted from a dealer. Riehl says, "He said that the car was in immaculate condition."
Riehl checked out the vehicle's report on Carfax and paid $4,900 dollars to drive it away. She made sure a mechanic check it out but says things soon started to go wrong. Riehl explains, "I got the car back and then the car wouldn't start."
According to Rebecca, there were faulty belts, problems with the tires and brakes and the car needed a new transmission. It's a horror story that comes as no surprise to transmission repair shop owner Dave Riccio. He says, "On a regular basis, maybe once a week, we get someone in our shop and I tell them they need a new transmission and they tell me, ‘I just bought this vehicle'."
Riccio says he's never seen an increase in people coming in with newly-purchased cars that need thousands of dollars in repairs. And he's got an explanation. He calls it car flipping, "You can literally go buy a car right now on craigslist for $500 or $1,000; you can do a minor repair to it, wash it up and then go sell it."
The relatively new practice can end up costing consumers big time because it's so hard to recognize. Riccio says, "You just have to fix it enough to pass it off on the next guy."
With so many people buying used cars today, Riccio believes it's an easy trap to fall into if you're not careful, so buyers beware. If you want to protect yourself from potential car flipping that's gone bad, experts say you should definitely pull the Carfax report, but realize it may not catch everything. Many of these flipped vehicles have gone through numerous owners before they get to you. Before you hand over any cash, you should take the car to your own mechanic to be checked out and have them do a full inspection.