Curbstoning: The Shady Sidewalk Sales of Used Cars

Curbstoning: The Shady Sidewalk Sales of Used Cars

Curbstoning. The word probably conjures up images of a shady character in a tracksuit standing on a street corner, waving their arms and shouting about crazy used car deals. And you wouldn’t be completely wrong. Curbstoning refers to the practice of selling used cars on the street or in parking lots rather than at licensed dealerships. While not inherently illegal, curbstoning is often associated with unethical sales tactics and puts buyers at risk of purchasing unsafe vehicles. Let’s take a deep dive into the curbstoning underworld and shed some light on these dodgy deals.

What Exactly is Curbstoning?

  • Curbstoning refers to selling used cars either on the street, in parking lots, or really anywhere outside of a licensed dealership . Curbstoners are typically unlicensed dealers who sell cars and pose as private sellers to avoid regulations and oversight, out to make a quick profit.

  • Transactions are quick and informal – the curbstoner has the car, you have the cash, and boom, you drive off the lot, no paperwork or pesky contracts involved. In contrast, car dealers are licensed and have to follow strict consumer protection rules.

  • Vehicles sold via curbstoning are often titled under the seller’s name rather than the dealership’s, further obscuring the car’s history and provenance.

  • It’s like those impromptu garage sales where your neighbors sell their kids’ old toys and knickknacks at a folding table in the driveway – except it’s with used vehicles and can involve thousands of dollars.

Why Do People Curbstone?

  • Easy money – curbstoners can purchase vehicles wholesale from dealer auctions, do minor touch-ups, then flip them for big profits without the overhead costs of a licensed operation. Their lack of facilities and dealer’s license keeps expenses low.

  • Avoiding regulations – by posing as private sellers, curbstoners skirt laws governing dealerships. No license, registration, or oversight required! A quick sale without all the paperwork.

  • Anonymity – with no official sales records, it’s harder for customers to track down curbstoners if issues arise with the vehicle. There’s less accountability.

Is Curbstoning Legal?

  • It’s…complicated. In most states, curbstoning exists in a legal gray area. It’s not explicitly illegal, but does violate laws around dealership licensing and sales tax collection.

  • When it comes to private party sales, most states allow individuals to sell a few of their personal vehicles per year without needing a dealer license. However, some local laws have more specific limitations in place. For example, under Colorado law, private sellers can only sell up to four vehicles in a single calendar year. The sale count applies to all private party sales, whether sold to dealers, wholesalers, or directly to owners. Selling any more than four vehicles in one year requires obtaining a Colorado used motor vehicle dealer license. This aims to crack down on unlicensed dealers, flipping cars and posing as individuals to skirt regulations. Those caught illegally operating as a car dealer without a license in Colorado face hefty fines. Private sellers in Colorado should be familiar with these annual limits and carefully track their transaction count.

  • Local governments often turn a blind eye until complaints roll in. Some states like Michigan have enacted “Anti-Curbstoning Laws” imposing hefty fines.

  • Bottom line: law enforcement tends to tolerate curbstoning until it becomes a rampant public nuisance. But make no mistake – it flies in the face of regulations governing auto sales.

The Telltale Signs of Curbstoning

Curbstoned cars may seem tempting with their low prices and convenience, but buyers should beware. Here are some red flags to watch out for:

  • Random locations – residential areas, empty parking lots, side streets. Reputable dealerships sell in car lots zoned for commercial activity.

  • Makeshift “offices” – the seller’s car, a folding table, even just a cell phone. Legit dealerships have…well, actual dealership facilities.

  • No business signage or branding – curbstoners want to remain incognito. No logo t-shirts or banners here.

  • Prices in spray paint – a dead giveaway of curbstoning is vehicle prices crudely painted on windshields. Real dealers use professional stickers or magnets.

  • Idling cars – curbstoners keep their goods running to mask potential mechanical issues. Let a car sit idle and problems may surface.

  • No paperwork – you won’t find purchase orders, vehicle history reports, or financing options with curbstoners. Just cash and keys.

Risks of Buying Curbstoned Cars

Tempting curbstoner prices can quickly turn into money pits once you’ve signed on the dotted line. Beware of these hazards:

  • Mechanical issues – without access to service facilities, curbstoners cannot thoroughly inspect or repair vehicles. Cars may be unreliable “lemons.”

  • Tampered odometers – shady sellers often roll back odometers to exaggerate mileage. The car you buy may have 100k+ unreported miles.

  • Washed titles – curbstoned cars may have had major damage or even been totaled and rebuilt without disclosing this history. Their true past is hidden.

  • No financing options – curbstoners deal strictly in cash. No exchange, returns or payment plans. What you see is what you get.

  • No legal recourse – if your curbstoned car turns out to be a junk heap, you have little power to hold the seller accountable or get compensation. Shady as they seem, these guys know how to cover their tracks.

Protecting Yourself from Curbstoners

If you’re in the market for a used car, follow these tips to avoid being hustled:

  • Verify licenses – check that the seller’s dealer license and registration are valid and up to date. Search public databases for complaints.

  • Inspect thoroughly – take it for a rigorous test drive and have a trusted mechanic examine it. Look for red flags of accident damage or odometer tampering.

  • Request vehicle history – a reputable seller will provide maintenance records and VIN reports detailing accidents, miles, repairs and owners. Review carefully. Or, skip the hassle and head to your nearest car dealership.

  • Pay by cashier’s check – this offers more fraud protection than cash or personal check. Make it out to the registered dealership, not an individual.

  • Consider legal action if issues arise – your state may have special Lemon Laws or consumer protections regarding car sales. Don’t hesitate to contact an attorney about your options.

“When a deal seems too good to be true, it probably is.” An old adage warns shoppers to be cautious of unbelievably low prices and smooth-talking salespeople. No truer words for curbstoning! Don’t let the lure of a bargain blind you to warning signs.

Curbstoning in the Digital Age

The internet and sites like Craigslist and Facebook Marketplace have become fertile ground for curbstoners to peddle their wares unseen. Here’s how to stay vigilant:

  • Vet online listings – search the dealer’s name, look for telltale signs like mismatched phone area codes, analyze photos for clues of curbstoning.

  • Insist on seeing in person – don’t buy purely online. Inspect the car, test drive it, have a mechanic review it.

  • Google image search pictures – this can reveal if seller copied stock photos or is using images from previously totaled vehicles.

  • Ask for video – request a walkaround video chat to view the car from all angles. Look for overspray or paint lines indicating repairs.

  • Require verified ID – only deal with sellers who provide valid, corroborated identification so you can hold them accountable if issues arise. Snap a photo of their ID in case you need it later.

The Bottom Line

Curbstoning creates attractive opportunities for bargain hunters, but offers few protections for consumers. It may be a good deal, but it comes with risks. Plus, these street-corner sales raise ethical and legal questions. With no facilities, licensing, personnel checks, or duty of transparency, curbstoners have little obligation towards buyers.

While not outright illegal, caution is advised. As the saying goes, “buyer beware.” Know the risks, check for red flags, and verify details when shopping curbstoned vehicles. An ounce of prevention is worth a pound of transmission repairs down the road.

Curbstoning FAQ

What are some other terms for curbstoning? 

Curbstoning goes by many aliases in the shady car sales realm, including:

  • Curbsiding

  • Curbing

  • Unlicensed car flipping

  • Gray market auto sales

  • Off-site dealerships

  • Open-lot sales

Whatever you call it, it refers to selling used cars outside of legal dealer car lot.

What are the origins of the term “curbstoning”? 

“Curbstoning” comes from the practice of dealers parking cars along the curb to sell, often in prohibited areas. They would stand on the curb peddling their goods to passerby, much like old-timey newspaper salesmen.

How widespread is curbstoning? 

It’s difficult to quantify precisely, but estimates suggest 10-30% of used car sales may happen via curbstoning rather than properly licensed dealers. Higher demand for pre-owned vehicles coupled with internet sales makes curbstoning appealing.

Why is curbstoning so hard to regulate? 

Several factors allow curbstoning to slip through the cracks:

  • Difficulty tracking transactions – with no formal paperwork, curbstoning leaves few traces.

  • Weak enforcement – fines are mild and rarely imposed and little risk of jail time. Not a high priority for law enforcement.

  • Online loopholes – internet sales create new ways to curbstone anonymously.

  • Lack of public awareness – many buyers don’t realize the risks or unlawfulness.

What are the risks of buying from a curbstoner?

You may end up with an unreliable lemon, paying more than it’s worth. Curbstoned vehicles could be stolen, damaged, unsafe or have rolled-back odometers. And you likely have no legal recourse against an anonymous seller.

How can you spot a curbstoned car?

Warning signs include makeshift lots, handwritten prices, cars idling for hours, lack of branded signage or personnel, and missing vehicle history reports. Too-good-to-be-true prices are also a red flag.

What precautions can you take when buying curbstoned cars?

Insist on thorough test drives, independent inspections by a trusted mechanic, verified IDs from the seller, and cashier’s checks instead of cash. Also get history reports run by an unbiased third party.

Should private individuals be allowed to sell used cars they personally own?

Yes, selling vehicles isn’t a crime. And individuals generally have the right to sell their own personal vehicle and even a few cars. This is legal private party sales, different from posing as a private seller when actually operating as an unlicensed dealer, selling cars on the street.

Is it possible to curbstone ethically?

While curbstoning itself violates regulations, sellers can take steps to ensure safety, transparency and fair pricing: thoroughly servicing vehicles, documenting history, offering warranties and return policies. However, full compliance requires official licensing, which includes a surety bond, a physical facility to display inventory, liability insurance, record keeping, safety requirements and ongoing compliance.

What are the alternatives to buying curbstoned vehicles?

Your best bet is to purchase from reputable licensed dealers who provide transparency, accountability, warranties, and legal protections lacked by curbstoners. Maintain diligence even at lawful dealers.

Do other states have limitations on how many cars can be sold privately without having a dealers license?

Yes, many states have restrictions on the number of motor vehicles that can be sold privately without obtaining a dealer license, though the specific limitations vary:

  • Florida – Limit of 3 private party sales within a 12-month period.

  • Iowa – Up to 6 sales per year before requiring a license.

  • California – May sell up to 5 cars without a license per year.

  • New York – No more than 5 sales within a 365 day period for private sellers.

  • Oregon – Only allowed to sell 4 or fewer vehicles in a calendar year.

  • Pennsylvania – Limit of 5 private sales annually.

  • Illinois – No more than 6 sales per year for individuals.

  • Texas – Up to 5 non-wholesale sales allowed annually.

  • Virginia – No more than 4 sales per year without obtaining a license.

Some states like Wisconsin have no clear annual limits outlined in laws. Others like Ohio and Michigan prohibit any more than 1-2 sales per year before requiring a license. 

Plus, local rules may further restrict sales in certain cities and counties. So private sellers should always verify the latest annual sales limits in their state before assuming they can freely sell vehicles. Exceeding these thresholds generally prompts hefty penalties.