When it comes time to buy a car, consumers are more empowered than ever thanks in large part to the Internet and its offerings of car reviews, online vehicle history reports, detailed car listings, and more. The Internet has also given scammers a new venue to find auto-buying victims. There are many advantages to using sites such as Craigslist to find and purchase vehicles, most notably cutting out the middlemen but unfortunately, this site in particular is raft with scams. Con artists are among some of the more inventive criminals out there but common sense and following a few helpful tips can help prevent you from becoming a victim of scams such as:
The “Price Too Good to Be True” Scam
In this scam, a prospective buyer sees an attractive-looking car (often a classic or exotic car) for a price well below market value. When the buyer contacts the seller, he or she is notified that the seller and the car is outside of the country and will arrange for shipment of the car upon receipt of payment, most often via wire transfer (such as Western Union) or bank-to-bank transfer (for very large payments). When the money is transferred and collected, the “seller” breaks contact and the buyer is out the money.
The Overpayment Scam
A legitimate seller posts a car for sale. He or she is then contacted by a prospective “buyer” (really a scammer) who offers to send a cashier’s check immediately plus additional funds to cover shipment of the car overseas. When the check arrives, the seller is instructed to deposit it and wire the overage to the “shipper.” When this is done and the wire transfer picked up, the “buyer” breaks contact and the seller is left on the hook to their bank for the fraudulent check and the missing funds.
Many consumers are rightfully wary of sending large amounts of money to someone they’ve never met. Scammer frequently recommend the use of fake “escrow” services that will hold funds involved in the transaction until both parties are satisfied that the transaction has been completed. In a typical scam, a legitimate buyer will be approached by a scammer selling a car (again, often an exotic or classic car priced, but usually priced well below market value). The scam seller will offer to ship the car and that there is no risk of fraud due to the “escrow” service (purportedly eBay, PayPal, or another service). Once the money is transferred, contact is broken (or sometimes additional funds are requested to cover “unforeseen” events). In any case, the legitimate buyer never receives a car and loses their money.
PaySAFE is an online closing table providing buyers and sellers a convenient one-stop location to create, negotiate and close trades with financial protection. PaySAFE is well aware of the scammers out there and offers this advice to consumers:
Know the car’s market value
Be suspicious of a vehicle priced significantly below market value. If it sounds too good to be true, it probably is.
Obtain a vehicle history report
A vehicle history report can provide useful information, such as who holds the title to the car and whether the car has been in an accident reported to authorities. You’ll also find out whether the car was ever reported stolen, salvaged or damaged.
Inspect the car
Schedule an inspection with a professional mechanic. An early inspection can help you identify problems. If the vehicle is out of your state use an independent, third-party, vehicle-inspection company service such as InspectMyRide.com, InspectMyRide provides added confidence for both seller and buyer by documenting the condition of the vehicle.
Confirm contact information
Before you send payment, verify the seller’s street address and phone number- an email address is not enough. ZIP codes, area codes and addresses should match up. Be wary if the seller is located overseas.
Use email wisely
Avoid sending sensitive personal or financial information (such as your social security number, credit card number or checking account number) to a seller via email. Remember that email communications are not secure and can be easily forwarded to others.
Get a detailed receipt
Ask the seller for a receipt that states whether the vehicle is being sold with a warranty or “as is.”
Get title to the vehicle
Make sure you know what’s required in your state to transfer title to the vehicle you’re buying. DMV.org takes all the information found within state DMV sites and puts it in one convenient easy to understand site.