Buying a Vehicle With a Tax Refund? Keep Scammers Out of the Driver’s Seat!

TDCI Urges Tennesseans to Be Vigilant: Conduct Research, Always Use Licensed Sales Professionals
Monday, February 07, 2022 | 03:56pm

NASHVILLE — With tax season in full swing, Tennessee consumers who have been waiting for the “green light” on buying a new or pre-owned vehicle may likely use their tax refund to go car shopping. Unfortunately, auto scammers are also on the prowl, and they’re angling to leave consumers in the dust.

The Tennessee Motor Vehicle Commission, which is under the Tennessee Department of Commerce & Insurance’s Division of Regulatory Boards, urges consumers to educate themselves, learn the red flags of auto scams, and spot a “can’t-miss-deal” that could actually be a scam before they sign any paperwork or buy a car.

“Tennessee’s Motor Vehicle Commission reminds Tennesseans to not let the excitement overshadow consumers’ common sense when buying a vehicle,” said Motor Vehicle Commission Executive Director Denise Lawrence. “If you are in the market for a car, first research your options carefully to ensure you are making the most of your money and to prevent being scammed by a bad actor. Slow down, ask questions, and always use a licensed motor vehicle seller when purchasing a vehicle.”

A prevalent scam tactic any time of the year is curbstoning. Curbstoning is the illegal sale of used vehicles under the false pretense of being the car’s owner in order to evade city or state regulations.

Curbstoning occurs when a person engages in the act of buying and selling used automobiles for profit but without a license, insurance, bond, sales tax number, Federal tax ID, proper local permits or legally established place of business. How do you prevent curbstoning? Always buy from a licensed seller. Tennesseans can check the status of the license of an auto dealer or an auto salesperson by visiting Remember, licensed  dealers are required to disclose that they are a dealer in all forms of advertising, including social media such as Craigslist, by including either their business name or license number.

Before Shopping:

  • Decide what you can afford. Don’t forget to factor in insurance, parking, gas and maintenance costs.
  • Research the car’s value. Check free online car evaluation websites to find out the average price of the car you plan to buy and trade in.
  • Look into financing before you choose a car. Ask about the financing terms (the number of months, down payment, interest rates and finance charges) if you plan to buy. If you plan to trade your existing car make sure to also research its fair trade-in value.
  • All Tennessee auto dealers must be licensed by the Motor Vehicle   Commission. Check a car dealer’s license status by visiting

At the Sale Site:

  • Examine the car carefully. Check the condition of the engine, tire wear, and any sign of an accident. Take the car for a test drive.
  • Get a vehicle history report at the National Motor Vehicle Title Information System.
  • If purchasing a used car, have an independent mechanic check the car before purchasing.
  • Do not buy a car if the dealer will not let you have it inspected. Many safety defects will not be identified during a standard inspection so you should also check for recalls.
  • Review the contract carefully. Make sure all agreed upon repairs, fees, taxes, and warranties are written on the purchase contract before you sign. Never sign a blank, incomplete, or unclear contract or buyers guide.
  • Get the mileage in writing and ensure it matches the vehicle’s odometer.
  • Get copies of all paperwork. Don’t leave without copies of everything that you signed.
  • If the dealer is to complete the title work for you, be aware that you may be asked to sign a Limited Power of Attorney authorizing the dealership representative to sign your name to the title and registration documents. Read this form closely and get a copy before leaving.
  • When purchasing a vehicle that will be subject to emission testing, the
  • purchaser must request evidence that the vehicle will pass emissions testing prior to consummation of the purchase contract. If the vehicle has not been tested or pretested within 90 days of the proposed purchase date, the potential purchaser should request a pre-test to ensure that it will pass prior to signing the contract.


  • Notify the manufacturer that you are the new owner when you buy a used car, or if your contact information changes. You can also subscribe for email alerts at for future safety recalls.
  • Unlike other transaction types, no right of rescission (aka “Cooling-off Period”) exists for vehicle sales transactions. When you drive it off the lot it is yours, so take the time to have it inspected and read all paperwork   closely before signing.
  • If you feel that you have been treated unfairly, and you have not been able to reach a satisfactory resolution with your car dealer, you may file a complaint with the Tennessee Motor Vehicle Commission is here to help. Visit us online or by calling 615-741-2711 and requesting the Motor Vehicle Commission staff.