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You should have 'backed out' for one reason: he did not follow through and pay you.
What he does with the VIN, after you make a legal sale, is not your business. Although, he is an idiot to tell you he intends to alter the VIN. The reality is this is a fairly common practice.
He broke the deal, not you. Move on.
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"A machine you build yourself is a vote for a different way of life. There are things you have to earn with your hands."
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