The Hidden Trap of Used Car Appraisal Sites: Unpaid 150M Yen Buyout

Troubles in the used car industry persist to this day. A fraudulent incident involving Company G in Iwate Prefecture at the end of last year revealed the pitfalls of bulk appraisal sites that connect customers with dealers. Automotive lifestyle journalist Kumiko Kato, who has been covering the used car sales industry for many years, reports on the issue.

Running off with cars through fraudulent practices

Even After the Bigmotor Scandal, Troubles in the Used Car Market Persist

Even after the series of scandals involving Bigmotor, issues surrounding used car transactions continue to arise. In December of last year, “G Company,” based in Morioka City, Iwate Prefecture, was involved in a fraudulent scheme where it purchased vehicles but failed to transfer payment to customers.

A victim, Mr. A, who had signed a sales contract with G Company, shared his distressing experience in an interview.

“In December of last year, I was looking to trade in my car and used a used car bulk appraisal site to find a buyer. That’s where I came across G Company. Their offer was overwhelming—50 million yen higher than the second-highest bid from another dealer—so I chose them without hesitation. The company’s owner explained, ‘It just so happens that we have a customer who urgently wants this car.’ That explanation made sense, as it justified the high price they were offering.

I prepared all the necessary documents for the title transfer as requested and handed over the vehicle by the specified date. The contract clearly stated that I would receive a payment of 3.5 million yen, so I naturally expected the money to arrive on the designated date.”

However, the payment never came.

“Even when the due date specified in the contract arrived, there was no sign of the money. The owner contacted me once to ask for a one-week extension, which I reluctantly agreed to. But then the payment deadline was postponed three times, and before I knew it, the year had ended.

Finally, he promised to make the payment by the end of January, so I even had him sign a written pledge. The owner insisted, ‘To prove my sincerity, you can even record this on video as evidence.’ That gave me hope that he would finally pay. But instead what I received while waiting for the payment was a ‘Notice of Representation’ from his lawyer.

The letter stated that the lawyer had been appointed by the owner and that he was filing for bankruptcy, meaning the payment for the car would not be made.”

It was later revealed that just hours before signing the pledge, the owner had already consulted his lawyer about filing for bankruptcy. Given the calculated nature of his actions, it’s hard not to suspect this was a planned bankruptcy.

G Company has since announced its closure. Later, Mr. A filed a criminal complaint with the Iwate Prefectural Police, which was accepted.

There are approximately 20 confirmed victims, like Mr. A, who handed over their cars to G Company but never received payment for over a month. The total damages are estimated to reach 150 million yen. A common factor among the victims is that they all used a used car bulk appraisal website.

To clarify, a used car bulk appraisal site is a service that emerged around 2000 with the spread of the internet and smartphones. The pioneering platform in this space is said to be “Carview,” which launched in May of that year and is now operated by LINE Yahoo Corporation. For sellers, these platforms provide a convenient way to quickly compare purchase offers from multiple used car dealers.

Currently, about 30 such sites are in operation. Recent refinements, such as limiting negotiation rights to only the top three or four highest bidders, have reduced the overwhelming number of phone calls users receive, making the experience less stressful.

However, these services also come with pitfalls. In this case, Mr. A used the major appraisal site “MOTA.” This platform allows small local used car dealerships like G Company to register with only a simple screening process. By offering an unrealistically high bid, such dealers can easily claim the top spot in the appraisal rankings and secure negotiation rights. In fact, Mr. A stated that “G Company’s bid was 500,000 yen higher than the second-highest offer.”

Insurance does not cover the damages

In fact, when the author interviewed the 20 victims of G Company, all of them had used MOTA and stated, “I signed the purchase contract because the appraisal price was overwhelmingly high.” Additionally, G Company had nearly perfect ratings on other major used car listing sites such as Car Sensor. Believing it to be a trustworthy dealership, they signed contracts—only to have their cars taken without receiving any payment, and then receive notices from lawyers informing them of G Company’s bankruptcy proceedings.

Of course, the primary party at fault in this case is G Company. However, used car bulk appraisal sites mainly promote high-value purchases, while few emphasize safe and secure transactions. These services merely function as a platform connecting customers and businesses, meaning that in cases of non-payment like this, they typically do not offer compensation.

When asked about this situation, MOTA responded with the following statement:

“We take the issue of customers who have used our appraisal platform reporting damages extremely seriously. (Omitted) While we do not directly intervene in the financial status of our affiliated dealers, we are committed to strengthening our management system to prevent recurrence. We have also consulted with the police regarding this matter.”

Many victims have also reached out to the National Consumer Affairs Center and local consumer service centers, but fundamental resolutions remain difficult. The Japan Automobile Purchase Association has set up a consumer consultation office to handle buying and selling disputes, but since it is a self-regulatory organization, full support is only available to members.

Car purchase fraud is even more malicious than outright theft. This is because, in the case of theft, auto insurance (comprehensive coverage) may help recover the car’s value, whereas no insurance policy covers damages from purchase fraud.

To reiterate, the biggest issue in this case is that G Company failed to make payments. However, it is also essential to understand the risks that come with the convenience of bulk appraisal sites.