Avoiding Online Car-Buying Fraud

online car buying fraud

Buying Used is Buying Smart, When Done Right

Everyone likes to save money and get discounts, but when buying a used car online sometimes what you think is saving money can cost you big.

With car sales taking place online there is a new market for car-buying fraud. We’ve all heard of craiglist horror stories.  Fortunately, the same tool that is being used to scam can be used for research. There are steps you can take to avoid being a victim of online car-buying fraud.

Types of Scams

The “Price Too Good to Be True” scam

This is when you see a car priced well under market value. When you reach out to the seller you then are told that both the seller and their vehicle are out of the country, but will arrange to have it shipped. The seller will ask for a payment to ship the car, more than likely a wire transfer or bank-to-bank transfer. Once the money is sent, the seller will break the agreement and you take a loss.

Escrow scams

This is when a you’re approached by a scammer selling a car, priced far below market value, and he recommends the use of a fake “escrow” service when the you are reluctant to send money to them for the car. The scammer offers to ship the car and claims there is no risk for you, because of the escrow service (usually eBay or PayPal). Once the money is transferred, you never hear from the seller again.

How to Avoid Car-Buying Scams

Here are some tips from the National Consumers League:

  • NEVER wire money or use a bank-to-bank transfer in a transaction
  • ALWAYS try to deal locally
  • DO NOT sell or buy a car from someone who is unable or unwilling to meet you face to face
  • NEVER buy a car that you have not had inspected by a professional. A vehicle history report may also be a good idea.
  • NEVER trust a seller or buyer who says that the transaction is GUARANTEED by eBay, Craigslist, PayPal, or other online marketplace. These sites explicitly DO NOT guarantee that people using their services are legitimate.
  • BEWARE sellers or buyers who want to conclude a transaction as quickly as possible. Scammers want to get your money before you have time to think or have a professional examine the deal.
  • CALL the buyer or seller to establish phone contact. If the buyer or seller seems to neglect details agreed to via e-mail or is unable to answer questions about their location or the location of the automobile in question, it is likely to be a scam.
  • ALWAYS trust your gut.

 

Sources:

http://www.nclnet.org/avoiding_online_car_buying_scams

https://cars.usnews.com/cars-trucks/used-cars/avoiding-used-car-scams