Could Your Vehicle be a Clone?

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Are you buying a used vehicle for your business? If so, it's important to ensure that the vehicle is not a clone. The following scenario demonstrates how cloning can affect an unsuspecting business owner.

Example

Freida owns Freida's Flowers, a retail flower business. About two years ago the old van Freida had been using to make deliveries broke down. The van was too old to fix so Freida bought a replacement vehicle from a used car dealership.

Freida had been pleased with her purchase. The van was only a few years old when she bought it and was in very good condition.

Two days ago a police officer appeared in Freida's shop. At first Freida thought he was a customer but soon learned otherwise. After handing her a copy of a police report, the officer informed Freida that the van she had purchased had been stolen in another state. He was confiscating it!

Freida was in shock. She had bought the van from a reputable dealership. How could it have been stolen? The officer explained that the van was a clone of a legitimate vehicle. A clone? Freida was  mystified. How can a vehicle be cloned?

What is a Clone?

Cloning is a type of identity theft, but the identity that is stolen belongs to a vehicle rather than a person. The cloning process typically involves the following steps:

  • Theft of a high-value vehicle, often a luxury model or one that includes many options. The vehicle may be stolen off the street or from a dealership's lot. We'll call this vehicle Auto A.
  • Copying the Vehicle Identification Number (VIN) from another auto that is the same make and model as the stolen vehicle but is located in a different state. We'll call this vehicle Auto B.
  • Removal of the VIN plate from Auto A. The VIN plate is a metal plate installed by the manufacturer that contains the VIN.
  • Replacement of the VIN plate on Auto A with a fake one that contains the VIN copied from Auto B.
  • Sale of Auto A to a buyer. Because of the fake VIN, the buyer believes that he or she is purchasing Auto B.

Once the VIN from Auto B has been affixed to Auto A, Auto A becomes a "clone" because it appears to be an exact duplicate of Auto B.

Buyer Beware

In the previous scenario Freida purchased her van from a dealership. Will the dealership replace the van or indemnify her for its value? The answer is probably not. Most states do not require dealerships to reimburse customers for vehicles they purchased that later turn out to be clones. Unless Freida can prove that the dealership was somehow negligent when it sold her the van, she will likely have no recourse against it.

Suppose that Freida had purchased comprehensive coverage for the van under a commercial auto policy. If Frieda files a physical damage claim under her policy, will her insurer pay her the value of the confiscated vehicle? Again, the answer is probably no. Repossession of a vehicle by law enforcement does not constitute auto theft. Moreover, Freida never had legal ownership of the vehicle so she has no insurable interest in it.

How to Avoid Buying a Clone

Any business that purchases a used vehicle bears a risk that the vehicle could be a clone. However, you can reduce your chances of being swindled by taking the following steps:

  • Beware any vehicle that is priced too low. If the price seems too good to be true, it probably is.
  • Obtain a Vehicle History Report on any vehicle you consider purchasing. The report provides valuable information regarding the vehicle such as the number of previous owners, dates of purchase, dates the vehicle was serviced and its accident history. You can also learn whether the vehicle has been reported stolen.
  • Inspect the vehicle's VIN plate. Damage or scratch marks on or near the plate may indicate that the plate has been removed and replaced.
  • Be sure VIN's match. The VIN often appears in multiple places on a vehicle. Be sure the numbers are consistent.
  • Check documents such as the title and registration for inconsistencies. Names and the VIN should be the same on all documents.

Has your Vehicle Been Cloned?

Have you received a parking ticket or traffic violation notice from a place you haven't visited? This may be a sign that your vehicle has been cloned. You may also learn your vehicle has been cloned when you try to sell it. A Vehicle History Report obtained by a prospective buyer may list auto accidents that never occurred (with your vehicle, anyway). If you suspect your vehicle has been cloned contact your local police department.