We'll run through various types of car shipping scams, reveal red flags you should look out for in providers and explain how to avoid falling for scams.

May 19, 2023

Key Takeaways:

IBISWorld, a leading international research database, found that the auto shipping industry increased in size by 3.4% in 2022. Unfortunately, this expansion means that there's more room than ever for scammers to make money by running illegitimate auto transport companies. Those who don't know how to properly identify these scams could lose money — or even their vehicle.

In this article, we at the MarketWatch Guides team will go through popular car shipping scams, mention red flags to watch out for and explain how to avoid falling for a scam. Whether you’re shipping your car a few states away or across the U.S., these tips will help you to find legitimate car shipping companies that could suit your needs.

According to the Merriam-Webster dictionary, a scam is "a fraudulent or deceptive act or operation" intended to obtain something in a dishonest way. In the case of an auto shipping scam, the thing that scammers are after is the hard-earned money you’re looking to spend on car shipping services.

As with many other illegitimate operations, car shipping scams can take on various forms. This means that as a customer, it's critical for you to perform thorough research and read through customer reviews before picking a provider. This can help you to choose an auto transport company that's both legitimate and of a high service standard.

Our team spoke extensively with Jack Savov, CEO of SGT Auto Transport, which is one of the leading car transport companies in the country. While he assured us that scams "[aren't] a widespread issue," you should still be vigilant when picking a provider. He offered insights on car shipping scams, red flags you should look out for and ways to avoid falling victim to scams.

Knowing the types of auto transport scams you should watch out for can keep you ahead of the scammers on the market. From fake carriers to the classic bait-and-switch, we’ll detail how some of the most common car shipping scams occur in the sections below.

Savov has taken note of a popular scam where fraudsters pose as shipping carriers on marketplace boards with the motive of stealing both your money and your car. He noted that they "often seem legitimate, offering competitive rates [while] making promises they can't keep."

If you’ve chosen to use an online marketplace rather than a car shipping broker, you could potentially be at risk. The thing to remember here is that prices that seem too good to be true probably are. Our team has researched typical car shipping costs to show what reasonable rates look like.

Another car shipping scam Savov shared with us involves "a fraudulent seller [who] advertises a vehicle at a low price to attract buyers." These fake sellers refuse to deliver the car to you in person, stating that they’ll have the car shipped to you instead. Then, they may ask you to send money in an untraceable way such as through gift cards or a wire transfer. Once they’ve received your payment, the scammers disappear without delivering the promised vehicle.

If an auto transport service asks for full payment at the time of your booking, that's a clear warning sign to move on and find another provider. Savov pointed out that "unscrupulous companies have been known to charge customers upfront for services, only to disappear without fulfilling their obligations."

Most reputable carriers require a deposit once a driver has been found to reserve your spot on the transport truck. You then pay in full once your car gets safely delivered to its destination. This removes the risk of a shipping provider simply taking all of your money and then failing to deliver the vehicle.

While market prices in the car shipping industry may fluctuate between your quote and the time of booking, a reputable company will let you know before you commit. "It's important for consumers to understand this aspect of our industry," Savov stressed. "This is not an attempt to overcharge but an unfortunate necessity due to market volatility."

The bait-and-switch scam tactic is slightly different. You’ll be offered an incredibly low price that's far below the going rate, only to be told when it's time to pay that the actual price is much higher. The vehicle transport company in question had no intention of keeping its initial word and failed to inform you of price increases before your commitment. In many cases, refusal to pay the new rate could cause the company to hold onto your car at pickup time.

Keep your eyes open for the car shipping industry red flags listed below. Being diligent about spotting these warning signs can help you avoid car shipping scams as you search for a reputable auto transport provider.

"Online reviews are a valuable resource for vetting businesses," Savov said. "If a company has no reviews across multiple platforms, this can be a warning sign." If you’re looking for reviews on reputable websites like the Better Business Bureau (BBB) and Trustpilot but are coming up empty, Savov noted that this company could either be "new, unproven or potentially fraudulent."

No company website — or worse yet, one that looks like it was hastily put together — is another red flag. If you’re struggling to find information on a provider's website or you spot spelling and grammatical errors, "this may indicate a lack of professionalism or legitimacy," Savov said. In addition, the Federal Motor Carrier Safety Administration (FMCSA) urges consumers to be suspicious of any website that's unclear about whether the company is a broker or a transporter.

One of the easiest ways to spot a fraudulent car shipping company is if it lacks a motor carrier (MC) number or a U.S. Department of Transportation (USDOT) number. All legitimate companies in the auto transport industry, from direct carriers to brokers, are required to have these numbers, which indicate that the company is registered with FMCSA.

Most companies display MC and DOT numbers on their websites, but if you’re unable to find them, a quick search on the FMCSA website will help you determine whether the carrier you’re researching is lawful and legitimate.

Savov pointed out that "a physical address provides a level of accountability and allows for potential recourse in the event of a dispute." A post office (P.O.) box or no address at all should be cause for concern, since it greatly reduces your ability to get in contact with the supposed provider.

Verifying contact information like email addresses and phone numbers can quickly weed out bad providers. Call the phone numbers listed on a carrier's website to ensure that they’re in service and then connect to the actual shipping provider. If you receive questionable emails from illegitimate online addresses, steer clear of that company.

Beware of car shippers asking for payment through services like MoneyGram or Western Union. Scammers like to use these payment methods because they involve untraceable wire transfers, which make it difficult for you to ever recover your money.

Reputable companies accept traceable payment methods like credit cards, debit cards, cashier's checks and secure payments through PayPal. Companies that accept these payment options are far more likely to be legitimate providers rather than fronts for scams.

Understanding the red flags associated with car shipping scammers is a great first step when choosing an auto transport provider. However, once you’ve settled on a certain company name, there are other actionable steps you can take to further confirm its legitimacy.

As mentioned earlier, the lack of an MC number or USDOT number is a huge issue that shouldn't be overlooked. You absolutely want the car carrier to be registered with the FMCSA. These numbers should be prominently displayed on a reputable carrier's website, so move on if you can't find them.

Even if an auto shipping company readily offers these numbers, it's smart to look the provider up. You’ll be able to see if the transport carrier holds the legally-required level of insurance coverage and whether or not its registration is active, suspended or has been revoked.

No customer reviews is one problem, but overwhelmingly negative reviews is a separate issue. It's best to read through customers’ thoughts on Trustpilot and the BBB, as you’ll find out whether the company offers high-quality services. Savov also mentioned that "word of mouth can be a valuable source of information, so consider asking friends or family if they’ve had any experiences with the company."

The BBB is a well-known and respected organization that offers accreditation to businesses that meet its standards of honesty and integrity. It reports on both accredited and nonaccredited business, so you’ll be able to find a rating for nearly any car shipping company.

In addition, updates on businesses are conducted regularly in alignment with the BBB's rating methodology. You can also view customer complaints that have been filed with the BBB.

This may seem like a no-brainer, but reading the fine print in your shipping contract is important. Signing a contract without first reading it leaves you open to additional fees, exemptions, limitations and other avoidable issues.

Researching the average cost of shipping services and getting quotes from multiple providers can keep you from falling victim to a car shipping scam. Even if it's low season for auto transport, you probably won't find a bargain that's "too good to be true."

If you’ve fallen for a car shipping scam, there are actions you can take to not only help yourself, but to prevent others from dealing with the same scheme.

Savov advised that "it's a good idea to report the incident to your local law enforcement agency," adding that "they may be able to provide further guidance and aid in an investigation." As car shipping scammers are adept at working to evade the law, the police can potentially offer you resources and a helping hand in making things right.

You should report the company or transporter behind the scam to the Federal Trade Commission (FTC) as soon as possible. While the FTC can't take steps to resolve the issue, it "can help in a broader investigation against the fraudulent entity," Savov said.

Provider reviews often play a large part in a person's decision to go with a certain car shipping company. Leaving a review about your own experience, whether good or bad, can help others as they search for information on a provider's shipping process.

If you paid by credit or debit card, your bank or credit card company can help in getting your money back from the fraudulent vehicle shipping service provider. Keep in mind that it may take some time to investigate your claim, but don't let this deter you from disputing the charge. Submitting requested information and evidence could potentially speed up the process and will help to prove that you have a legitimate claim.

While car transport scams may not be a rampant issue, it's still possible to fall for them if you aren't careful. By doing diligent research, learning about car shipping scams and checking for red flags, you’ll be able to separate legitimate car shipping companies from the fakes.

You can determine the legitimacy of a car shipping company by checking if it has a valid motor carrier (MC) number and USDOT number. A large volume of positive reviews through reputable websites like the BBB and Trustpilot can also point to a company being legitimate.

Thoroughly researching car shipping providers can help you avoid falling for a scam. If you come across a company with no motor carrier number, no USDOT number or fake contact information, it's best to look for car shipping services elsewhere.

Enclosed car shipping is the safest way to ship a car since it protects your vehicle from bad weather, road debris and other potential hazards. However, enclosed transport is generally far more expensive than standard car shipping services. Door-to-door shipping also prevents your vehicle from facing issues on the way from the shipping terminal to its final destination.