Did you know that about 40 million used cars are sold in the United States every year? If you’re planning to sell your vehicle, and have never been scammed before, keep in mind that car buying scams happen more often than you imagine.
Websites like Gumtree, Craigslist, and eBay have simplified the way people buy and sell cars. That’s why you’ve probably chosen to sell your automobile online rather than placing an advert in a newspaper, before buying your new car from a dealer. However, you should be prepared for the most common frauds and accept them as something that happens – there are always buyers trying to take advantage of naive and unsuspecting sellers.
We’ve put together a list of the most common types of scams, outlining what they are, how they work, and what you should look out for when selling your car. So, if you decided to buy a new motorcar or plan to hire professional movers and prepare a car for shipping, we’ve provided you with handy tips on how to avoid being ripped off yourself.
Why Sell a Car Online?
One perk of selling a vehicle online is that there are less or no emotions involved. It’s easier to stay neutral when exchanging messages with someone, and when details and potential discussions may be solved through email. Having everything in writing means you can make all decisions in your own time and without a buyer nearby. All in all, there are plenty of pros when selling a car online, but you need to be cautious.
Be Aware of Scammers – Find Out Warning Signs
Of course, there are a lot of genuine buyers, but also the ones pretending to be. Scammers usually make up different stories, such as needing your help to pay a third party or an agent for preliminary expenses (insurance or transportation). Even more, they will always promise you reimbursement for these costs.
Other swindlers may send a cheque for more money than you agreed, and they can invent excuses like overpayment or only human error. You can expect to be asked to refund the surplus quantity through online banking or a wire transfer before you actually discover that it was the cheque without funds.
But before something bad happens, find out warning signs that can clarify the whole situation and prevent much bigger financial loss.
Sellers Should Look Out for These 4 Car Buying Scams
Selling and buying a used car is a stressful experience, and it’s even worse when the purchaser (or dealer) is trying to run a scam to you. So, what should a seller do to avoid possible fraud? The best defense is to arm yourself with knowledge before a sale and figure out what types of scam you shouldn’t ignore.
#1 Consumers Who Don’t Want to See Even New Cars
If the potential buyer tells you he would like to buy a car without viewing it in person first, that should be a red flag for you. That might bring you more complications in the future. For example, if a buyer damages the car on purpose, he can claim that it was already damaged when he bought it. You can avoid this kind of scam by presenting your vehicle accurately online, including all shortcomings and damages if there are any.
#2 “Trying to Buy and Pay Online” Scam
Fraudsters are ready for anything, and most of them sound very professional and genuine. When it comes to payment, you can expect suspicious emails, such as a fake receipt masked as an authentic one from your potential buyer. Also, your purchaser will claim he already paid, but the provider is holding the money that will be released after you ship the automobile. The only thing to prevent possible cheating is to receive your money at your bank account.
#3 “Overpaying By Mistake” Scam
We already mentioned the possible situation when dealing with a potential buyer who can’t meet with you and pay in person. So, he usually says that he sent you a cheque and overpaid you, unintentionally. Of course, the check is false, and the payment has never happened. Refunding shouldn’t be your move until your money reaches the bank account or you realize that the whole story is just a trick.
#4 Underpricing-Related Issues
Some scammers will try to play on your emotions, undervaluing your vehicle, and convincing you that the car is not worth the money. Even if they bring “a car expert,” you should stand firmly behind your decision and price because scammers’ goals are not just to bring down the price, but there’s something more: they want to put the car back on the market and sell it for much more money than they paid you. But, performing car service and evaluating its real condition before a sale is a move you should undertake for extra peace of mind.
Tips to Help You Avoid Fraud and Scam
Keep in mind that the Internet attracts many positive people. Still, it also attracts grifters who’ll disappear for good after the fraud. Luckily, not everything is black as it might seem – there are several ways to avoid falling prey to an online scammer:
- Check out a potential buyer and speak with him on the phone
- Insist on paying with cash, and don’t accept a cashier’s cheque
- You will recognize a real buyer easily – he will have questions about the vehicle and probably want to make a good bargain
- Meet in a “safe zone” with video surveillance or in a well-lit and crowded public place
- Scammers often have too many stories, asking for help or shipping a vehicle out of the country
Know Also: Act Wisely When It Comes to a Test Drive
The most important words of advice are – trust your instincts. If any aspect of a potential purchaser makes you uncomfortable, you are not required to let someone drive your car. If you’re not sure whether to allow people to take your vehicle for a test drive, you should follow these steps and save your car from potential theft:
- Start and end test drives at a police station – the potential scammers will give up the idea of meeting you there
- Check with your insurance agent what your insurance policy allows
- Take a photo of the test driver and his driver’s license and email another person as an additional layer of protection
- Inform your potential buyer about the time he can have for the test drive if you accompany him, or if he insists on driving alone
- Ask a friend to join you for a test drive and make the whole process safer and comfortable
How to Report Scams and Fraud
If you’ve been scammed, you can report car buying scams to the Federal Trade Commission (FTC). First things first, gather emails, phone numbers, and receipts so that you can be ready to complete your report. The FTC accepts most complaints about different types of scam, such as:
- Phone calls
- Computer support scams
- Imposter swindles
- Fake checks
- Demands for you to send money
- A student loan or scholarship frauds
- Prize, grants, and sweepstakes offer
If you decided to sell your motorcar, keep in mind that car buying scams are all around you. Be cautious, check your prospective buyers, and believe your gut – if you get a bid that is too good to be true, then it probably is. The simple advice is: don’t do anything that seems strange to you or just because someone promised you something.