This Is the Worst State for Auto Fraud

Last year was a rough one for the car industry as sales plunged from March until the autumn because of the COVID-19 pandemic. Sales began to pick up in the final quarter of the year. Sales in the first quarter of 2021 have been particularly robust. One thing that has not changed is the high level of auto-related fraud in the United States.

Auto fraud takes place in repair shops and at dealerships, according to a study by Clearsurance, which reviewed Federal Trade Commission (FTC) data. The agency describes the issue:

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.

Clearsurance lists the most common scams as inflated prices for simple repairs, unnecessary repairs, use of counterfeit parts, lying about customer credit reports to get higher finance rates on car loans, selling “useless” extended warranties and charging to prepare cars for delivery when the manufacturer already has done the work.

Clearsurance looked at state fraud rates based on a “per million drivers” number and a raw count of cases. “Per million” allows for an apples-to-apples comparison from state to state. Using this yardstick, Nevada had the worst record by far at 346.1 auto-related fraud cases per million drivers.

The Clearsurance experts wrote:

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 was followed by Delaware at 337.9 and Florida at 337.0.

Clearsurance had advice for all drivers who visit repair shops and dealerships. Spend more time shopping and researching dealers and repair shops to screen for earlier complaints. It is worth the time.

Click here to see which is America’s slowest-selling car.


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