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How to avoid online car buying scams Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial choices by providing you with interactive financial calculators and tools as well as publishing unique and impartial content. We also allow users to conduct research and compare information at no cost and help you make sound financial decisions. Bankrate has agreements with issuers, including but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this site are from companies that compensate us. This compensation could affect how and when products are featured on the site, such as for instance, the order in which they may be listed within the categories of listing and other categories, unless prohibited by law. Our mortgage, home equity and other home lending products. This compensation, however, does affect the information we provide, or the reviews that you read on this site. We do not include the universe of companies or financial deals that could be open to you.
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5 minutes read. 13 October 2022.
Authored by Rebecca Betterton Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the ways and pitfalls of borrowing money to purchase the car they want.
The edit was done by Rhys Subitch Edited by Auto loans editor
Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers gain the confidence to take control of their finances with concise, well-studied and well-researched content that break down complicated topics into bite-sized pieces.
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Making a purchase from the comfort of your living room just a couple of clicks can be a good thing however, it comes with some risks. Like the majority of the world of online frauds have made their way into the space. Be aware of common cons to avoid losing money when you purchase the latest car. The most common online scams for buying cars These are the scams FTC (Federal Trade Commission) has for online car sales, but there are some common scams to look out for when . Identity theft Scammers are not only looking to swindle the victim out of their money , but they also want to collect your personal data. They may ask for information such as you Social Security number, birthdate or bank account numbers. Don’t share your personal information with prospective sellers, other than your name and number. If you do apply for a position an opportunity, ensure that the seller is licensed, legitimate and has a good reputation. Otherwise, it may be preferential to make an application outside the dealershipor go to a location where you can verify that the seller is honest and trustworthy. False advertisements When searching for a private sale there are advertisements that don’t list the VIN, or the number that identifies the vehicle. If you are not able to confirm that the vehicle is actually present — that is, see it personally and verify you are sure that the VIN is accurate Don’t pay. It’s not unusual for scammers to present vehicles in advertisements without having it. Even if the car exists, make sure it’s not listed as stolen and that it has a clean history report. Curbstoning This scam is where a dealer claims to be a private seller with the intent to sell the vehicle in violation with normal dealer rules which means it has a salvaged title or is damaged. A salvaged title will be a major problem when it comes to insuring the vehicle. You can avoid this fraud by staying away from vehicles sold online from empty lots or on the side of the road or even at the home of the seller. Like any private sale, ensure you check that the seller and VIN are authentic before you sign a contract to purchase. Buying sight unseen Never agree to buy a car without having seen it. Not only is it best to take your potential car to a test drive purchase it sight unseen, but it could mean that the vehicle might not appear as the photos suggest or even exists in the first place. If the seller is quick to sell you the car or asks you to make a speedy purchase before you view the car in person, it’s likely a scam. Ask for wire transfers or credit card gift cards If the prospective seller demands an electronic transfer to make the vehicle payment, walk away. This is a common technique used by scammers to take your money , but with no guarantee of a vehicle. The money you wired isn’t traceable and very difficult to recover. It means that you could be left with no vehicle and no chance of a refund. Similar to scammers who want payment via wire transfer, a few sellers will ask for gift cards for the payment. Again, walk away. Gift cards are not traceable and means that the seller is likely attempting to make money off you. Title washing washing is a method to hide damage from a wreck, or other problems with the car’s history. Even if you must pay for it yourself make sure you get a car history report for the VIN. This isn’t guaranteed to show you everything the car has gone through but it can assist you in avoiding falling victim to a scammer seeking to sell a risky vehicle. Fake escrow account Although this scam could go both ways, you should be aware of the possibility of using a fake escrow account when purchasing a car on the internet. Escrow accounts are a legitimate way to keep both parties protected from fraud. However, fraudsters may make use of fraudulent escrow accounts to trick you into depositing funds directly into the seller’s account. When the time comes to collect the car and transfer the title the seller is no longer accessible to contact and you’re left with no way to retrieve your money. Are online car purchases an excellent idea? If you use an authorized service, buying a car online is the same as purchasing a car from the dealership. If you choose to go with an individual seller, don’t let the chance of a scam happening deter you from buying. If you are a savvy buyer you’ll be less likely to be duped and more likely to drive away happy with your vehicle purchase. Benefits of purchasing a car online If you are aware of the frauds to avoid and look up a reliable source, buying a car online has its benefits. First, it helps save time. It isn’t necessary to go to several dealerships and have to deal with physically searching inventory on a lot. Shopping online gives you endless shopping opportunities. Because you don’t have to limit yourself to what you can find at a dealership and you can be sure to find a more precise suitable match to your needs. There’s no pressure to sell because, in the end, you’ll be browsing through websites via your smartphone or laptop and not exposing yourself to sales representatives from a professional. If you choose to go with a brand similar to Carvana or Vroom, you’ll have access to national delivery. There may be a small cost, but if you locate the perfect car, it may be worth the cost. The drawbacks of buying a car online In addition to scams, there are couple of reasons why people prefer traditional dealers: Big online sources don’t mean that there is no bargaining. It is possible to deal with private sellers, though you will be at risk of getting involved in fraud. The lenders may not be able to offer financing for a private sale when you search online. Should they, then you might be surprised to find the costs are higher than those for an used or new vehicle loan. It is possible that you won’t be able perform an in-person inspection until after you talk to the seller or have the car delivered. It could be even harder for a mechanic to check the car when you buy it online. What should you do if you’ve been scammed If you suspect you’ve been a victim of an online fraud There are a few steps you should take. File a complaint directly with the fraud center. Get in touch with your attorney general of the state. File with the FBI’s . Inform the FBI of the . It may become difficult, or even impossible, to obtain your money back if you sent it via wire transfer or handed over gift cards. But, be aware of the transactions you made with your bank when you have entered any data on an illegitimate website. If you spot any suspicious transactions, inform your bank about the fraud and reset any usernames or passwords linked to the account. The bottom line If you think a deal on a car is too appealing to be true It’s probably true. The purchase of a car online could be a perfectly safe way to buy a secondhand vehicle. But , be aware of common scams and trust your instincts. If something seems off, it probably is. In time’s end, there’s plenty of used cars on the market. You can always opt to walk away from a deal and find another, authentic seller via trusted websites — or go with a used car dealership. Learn more
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Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the details of taking out loans to purchase the car they want.
Editor: Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping readers gain confidence to manage their finances by providing precise, well-researched and well-written facts that break down complex topics into manageable bites.
Auto loans editor
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