The latest twist in the exportation of luxury cars: STRAW-CREDIT FINANCING. In the ever changing cat and mouse game of buying cars under different aliases, using innocent people targeted through Craig’s List ads offering $500.00 payouts, has escalated to auto loans and leases. Notice the ads insist on good credit, request a social security number so the credit score can be obtained, for the purpose of buying a luxury car: usually a BMW, Mercedes Benz, Porsche, Land Rover, Audi or Ferrari. While paperwork is signed indicating the business is completely legit and will prosecute anyone that fails to hand-over or “deliver” the car they signed for, but which the broker paid the dealer upfront, the car dealers are getting wise and holding title on cash deals, trying to catch the “fake” buyers. Enter the “fake” loan or lease.  The brokers are attempting to use the bank process of holding the title and then releasing it when the vehicle is paid off, as a means to get the title and thus the ability to send the car to it’s intended owner, the foreign buyer waiting in China, Russia or the Middle East. In order to follow this plan, the unsuspecting ad-answering buyer must have good credit, and using one’s credit to secure a vehicle for another party, be it for building credit, renting the car out or simple grabbing $500.00 bucks, seems to be too good to be true, and is technically a HUGE NO-NO in the auto finance world. This is NOT co-signing. The act of a direct family member, mom or dad, signing with their child on their first car. Straw Purchase or STRAW AUTO LOANS are two people that hardly know each other and have NO FAMILIAR relationship, trading a good credit score for profit, because the bank would not give this person/company a loan otherwise. Why can’t they get a loan on their own? Typically they do not want to reveal their income, revenue sources or personal information, they would rather use YOUR CREDIT, for $500 bucks. The banks are getting smarter, demanding that all documents be signed in person at the dealership, photos taken with the car, even fingerprinting the individual doing the signing to be sure they do not have identity theft, or can capture you in the event this purchase is associated with a crime/illegal activity. The bigger issue with STRAW PURCHASES is once the bank sees this, they are leery of giving you a loan or lease, so in addition to ruining your chances (and those of your family/residents) from buying a new luxury car in the future, if your name is now associate with STRAW PURCHASES, what’s that do for your ability to get a car loan in the future? If you have good credit why would you put that on the line for someone you don’t know? What happens when you sign a loan or lease document, hand over the keys to the car you just signed for and insured in your name at your address, maybe registered in your name, as the case may be, and these “PEOPLE YOU DON’T KNOW” fail to payoff the car? Then the loan goes into default and the repo guy comes to get the car? NO CAR… it’s gone? Straw Purchases involving auto loans or leases is considered an act of FRAUD in the banking world. YOU promise to use this car for your personal transportation, not buy it in your name to be shipped overseas the next week. AND GUESS WHAT, the authorities have the shipping documents to prove it!  Committing bank fraud, whatever the name of the specific infraction, the list goes on and the person signing the documents: YOU, are in the middle of it…  Worse still, you can’t report the car stolen, because you gave them the keys! All this for an “easy” $500.00 bucks… really?  Only to find out the “deal” go cancelled at the last minute or your check was short or worse, the long-term effects of the transaction will be far from painless. Most honest, ordinary citizens worry the IRS will “audit” them for no reason… So I imagine the IRS knocking on the door because they caught wind of luxury cars selling for double their street value overseas? ” Mr. Jones, where is that extra $150,000 you made on the five luxury cars you purchased this year, we notice they are not in your drive-way?” The latest call about this Craig’s List ad came from an enlisted E2 serviceman based in the Virginia area.  Having completed several transactions, his Googling brought my previous post to his attention, which resulted in a phone call. “Will this brokering deal bar me from future promotions in the military?” he asked. I ‘m not a lawyer, so I referred him to his Master Sargent and on base legal-aid, but with the caution to watch his credit reports and credit cards faithfully, “Who knows how secure their data is or where your social security number will end up?” I said. Is this illegal?” he continued. “Well if you have purchased and resold more cars than your state allows, without having a broker license, then it’s possible you are breaking the law.” I replied. “Well what about the brokers advertising this deal, aren’t they the ones selling the cars overseas?” “If their name is on the documents, they would not need you to SIGN ANYTHING, would they? I replied, “OR MAYBE they have documents, of which you have copies, showing they bought the car from you: vehicle identification number and all.  By paying you only once under $600.00, they don’t have to issue you a W2, but more than $600.00 they are supposed to issue the tax form, and YOU should be asking for their business EIN-Employer Identification Number, to be sure they are a real business. In either case, YOUR NAME is associated with the original sale of the vehicle which YOU told the dealer was for YOUR PERSONAL USE in the USA.” Long and short of this story is: There is no such thing as a free lunch. I share this with you because I don’t want innocent, law-abiding, proud to serve  military families taken advantage of by individuals with full knowledge of the repercussions these transactions, failing to disclose such issues on their websites, in their ads, paperwork or otherwise. For more information read here: $500 Craig’s List ads. ———————————————— Sarah Lee Marks is MyCarlady. She has over 23+ years of experience. She writes about cars, and is a staunch consumer advocate on car related subjects. MyCarlady offers free car buying advice, and private, auto-related services to help you maintain your personal or commercial vehicles. You may contact her at sarahlee@mycarlady.com,mvides422@gmail.com,carlady@cox.net for more information. Join the MyCarlady newsletter to be kept up-to-date on this and other important car information. ]]>