So, y'all want a little Curbing 101 (Curbstoning to our friends south of the border) do you? I could be here all day with this one, but I will try to help out a bit with some of OPs initial questions. This is all in regards to people buying and selling cars privately, not anything related to actually having a dealers license.
I don't know what the tax situation is like in your state, but where I live, if I buy a used vehicle from my neighbor, I have to pay 12% tax on the purchase price when I register the car into my name. Now, if I am buying that car strictly to resell it, that's 12% of my potential profit gone right off the bat. So instead, I pay my neighbor for his car, get him to fill out all the seller's portions of the transfer paperwork, then just leave the buyer's portion blank. I put the car up for sale for say $1000 more than I paid, and someone comes to look at it. They decide to buy it, and ask to see the paperwork. "Oh, well my cousin went to Japan to teach English and left his car for me to sell for him as he didn't have time, but here's all the signed paperwork, feel free to check the VIN number, it's all legit." Which it is. Kinda. The car isn't stolen, it's just not being sold by the registered owner and taxes haven't been paid on the previous transaction. Here it's called "bridging" the registration. So if the guy buys the car from me, he fills out the purchaser part of the transfer papers and the car goes from my neighbors name to his, and I never show up anywhere on paper. I save the 12% tax, any profit I make is tax free, and have zero liability in case of any future issues as hey, my name ain't on the papers now is it?? And yes it's illegal. I don't know how illegal it is in your part of the world, but generally anytime you stick it to the tax man they frown upon it.
Another reason you might see the "it's my cousin's car" thing going on is a group of people will get a hold of a car with a know issue, or say really high mileage. This used to be way easier to do before things like Car Fax came along, but it still happens a lot. The car will get transferred between 3 or 4 people that all know each other, and in the process something odd might happen, like suddenly it went from 250,000 miles to 150,000 miles. The person that ends up "selling" it will have a straight face when he says it's 150k miles because it was when he got it (from his cousin or whoever). So average public buyer buys the car and finds out a year later that the mileage has been changed. You have any idea how hard it is to try and figure out who to go after for restitution in that situation? Everyone points at everyone else, and good luck ever getting any money back. Private sales are just that, private. You are on your own to do your research BEFORE you buy the thing. Dealerships charge a premium for vehicles, but the one thing they do offer is someone to go back to if there does turn out to be something fishy with the thing.
Also, depending on the dealer licensing rules for your area, there is generally a limit on how many vehicles a private individual can sell over the course of a year before they are considered to be doing it as a business and require a license. In my neck of the woods it's 6. Of course I have NEVER exceeded that number as that would be illegal, but if you get someone that does it a lot he will be using the "it's my cousin's car" line as well just to avoid putting a car into and then out of his name and attracting attention from the licensing board. Or he'll sell 6 from his name, then 6 from his sisters name, then 6 from his dog's name, whatever. The record holder in my province for cars curbed in a year by an unlicensed individual was 647! That's 1.7 cars a day! I need to meet this guy!
As far as finding a decent, honest car on CL, I never search the whole Vancouver area as I get all the shrapnel from all the roachy areas. This will sound harsh, but just pick 3 or 4 of the richest/nicest areas of your city, and just search those. Rich people take their stuff to the dealership for oil changes, just pay to fix whatever it needs, and when they want to sell it's generally just "an old car" to them by then so you can get surprisingly good deals, they just don't want the headache of dealing with more people. Would you rather buy a Prius from a sketchy looking yard surrounded by chainlink fence and razor wire, or out of the driveway of a nice house with the owners brand new Prius parked beside it? I have bought older Hondas and Acuras out of North Vancouver for literally a 1/4 of the amount of the total of the last service bill the owner paid at the dealership. '89 Civic, new struts, ball joints, master cylinder, full exhaust - all so new they still had the Honda part number stickers on them, for $500? It was cheap because it had a broken mirror and a scratch on the door... Ya, I'll take that deal alllll day long ha ha.
