Does Under-Invoicing Affect the Car?
2 Answers
Under-invoicing does affect the car. Below are the reasons why under-invoicing impacts the vehicle and the potential rights and benefits that may be compromised: Reasons for the impact: Under-invoicing during car purchase is essentially an act of tax evasion. The purchase amount on the invoice does not match the actual payment (the invoice reflects the purchase amount). If vehicle issues arise, the car seller has the right to compensate based on the invoice amount. Reduction in coverage amount: Under-invoicing leads to a decrease in the overall coverage amount when purchasing car damage insurance. In the event of a major accident resulting in a total loss, the insurance company will use the invoice amount as the compensation standard. Similarly, if the owner purchases theft insurance, the invoice amount will also serve as the basis for calculation.
When I bought the car, the salesperson told me that under-invoicing could save on taxes, and I agreed out of greed for small gains. Later, I had a minor accident, and the insurance company only compensated based on the invoice amount, which was much lower than the actual value of my car, resulting in a loss of tens of thousands. The repairs were also troublesome because the dealership gave me the runaround on warranty claims due to the low invoice amount. When I went to sell the car as a used vehicle, buyers saw the low invoice price and bargained even harder. I realized this practice has significant consequences—not just tax risks but also impacts on rights protection. I’ll never do this again. Legitimate transactions are the way to go to avoid regret later.
