Steer clear of fraud: Verify your car’s ownership before purchase

There’s a growing problem with vehicle fraud in Ontario where criminals create fake vehicle identification numbers (VINs) for stolen cars and later resell them to unsuspecting buyers. 

Police estimate that around one-third of stolen vehicles are being resold in Canada after being re-vinned. Individuals are purchasing these seemingly legitimate cars, only for them later to be taken away when police determine that the vehicles were stolen from their original owners.  

Re-vinning can leave victims with serious holes in their pockets. Let’s explore how to verify a car’s ownership before purchase and identify some common fraud tactics to watch out for.  

Every vehicle is assigned a unique 17-character alphanumeric code known as a VIN that provides important information, such as its make and model, year, where it was manufactured and more.  

A car that has been re-vinned has had its original identity hidden to make it easier to sell to unsuspecting buyers. Purchasing one, even unknowningly, can result in legal troubles, safety concerns, and of course significant financial loss. 

Owning a re-vinned vehicle means law enforcement could seize it at any point, leaving you without a car. There’s a chance you might not get the money back that you spent on the vehicle, either. If your insurance provider learns a vehicle has been re-vinned, they’ll void your coverage and may also deny any claims you have made. 

You could face serious financial loss if you buy a car that was stolen and re-vinned. That vehicle could be seized by police and will be denied insurance coverage in the event of a collision or incident. Sometimes these vehicles pose safety concerns as well, which could put you and all your passengers at risk.  

Since insurance will not cover re-vinned vehicles, you could be financially responsible for any liabilities, damages, or even legal expenses that may arise. During a period of investigation, claims made by the owner of the car could risk being denied. Sometimes, re-vinned cars will be fought out by law enforcement, but other times they can be found

Is there any compensation available for victims of auto fraud or re-vinning? Well, if you’ve purchased your vehicle from a licensed automobile dealer then you may be able to seek recourse through the Ontario Motor Vehicle Industry Council (OMVIC). 

OMVIC might be able to help find a resolution with the dealer. If that’s not possible, then you may be able to access OMVIC’s Motor Vehicle Dealers Compensation Fund, which assists car buyers in the province who may be left financially impacted by illegal activities. In 2022-2023, this fund paid out $842,000 to over 120 claimants—almost double what was paid out in 2021-2022. 

But what if the stolen vehicle was purchased from a private or unlicensed dealer? This is the much riskier route as you never know if these entities are making true claims about the vehicle’s condition, its past repairs, etc. OMVIC cannot assist if you buy a car through these means and it later turns out to be stolen.  

When you’re on the hunt for a new vehicle, it’s important to be cautious. Re-vinning is a more common scam than you might think, and sometimes not even the dealer is aware that the car was re-vinned. Here’s some tips to help avoid auto sale fraud: 

If you back out of a vehicle sale because you suspect it might be a re-vin, consider reporting the incident to the police to have the matter checked out. You can also submit an anonymous report to Crime Stoppers Ontario at 1-800-222-TIPS. 

If you’ve recently purchased a new vehicle and you’re certain it was a valid sale, you’ll need to get car insurance before you can hit the road. Give us a call and one of our brokers will help you find a great deal on your insurance without sacrificing coverage.