Selling Your Car? Beware of These Scams

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Is the guy buying your car a con artist?

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There are few things worse than being cheated out of your hard-earned money. Sadly, there are people in the world who make it their mission in life to cheat us, lie to us, and steal from us, making these fears a reality. These tricksters make use of a variety of notorious mediums, such as scams for selling cars, life insurance, money transfer schemes, lottery payouts, emotional manipulation, and credit card fraud.

Nowadays, as almost everything moves online, we can't even rely on our intuition to help us spot these fraudsters. Instead, we are bombarded with phony spam emails promising us the world and feeding on our desperation and fears. Unfortunately, while some of these scammers are foolish and uneducated, all too easily giving themselves away, others are cunning and smart, oiling their way into our good graces and wallets. Luckily, we live in the age of information, and all the tools for dealing with these snake oil salesmen is at our fingertips. You simply have to know where to look.

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1. How do Car-selling Scams Work?

While the most common scammers try to sell us fake goods, there is a select sub-species that use the reverse tactic. There are loads of online used-car buying scams, taking advantage of people at their most vulnerable. Generally, it is safest to buy through dealers, though not all have your best interests at heart. People who sell their cars privately are usually those that need money the most, making them even more susceptible to online car buying scams.

Scammers operate by contacting the seller telephonically or via email, expressing an interest in buying the vehicle as soon as possible. Often, they will offer alternative forms of payment that are harder to authenticate, such as PayPal. The transaction is always faked, however, with the trickster sending a phony email notifying you that the money has been deposited. They then request that you ship them the car, and once it is out of your sight, it is almost impossible to track it down when you realize you've been duped.

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2. Types of Scams

Con artists are always coming up with new ways to scam unsuspecting individuals. To date, there are a number of different internet car sales scams you might fall victim to, so it is more important than ever that you know what to be on the lookout for. Here are some of the most common dangers to be aware of:

  • Sight-unseen buyers - Nobody should ever purchase a vehicle without seeing it, so if a buyer seems willing to do so, the alarm bells should be ringing (read more about buying cars sight unseen here). You can be certain that the check is going to bounce the moment you try to cash it, and if you've already begun the shipping process, it may be too late to do anything about it.
  • Bogus checks or money orders - Following on from the point above, scammers never actually pay for the car you are selling in car sales scams. Just because you have the check in hand, that does not mean you have the money.
  • Overpayment - Another clear warning sign is an overeager buyer. If the person you are interacting with seems happy to pay more than your asking price to expedite the transaction, you should be very wary.
  • Payment plans - Even if a buyer is legitimate, you should never consider a payment plan. The risk that the new owner of the car will simply stop paying is very real.
  • Escrow services - Any offer to pay using a third-party service is suspicious, as only a select few are actually reliable and it is all-too-easy to fake when running a used car-buying scam.
  • Identity theft - It is not uncommon for a con artist to promise a payment in order to gain access to your personal information, such as bank account information, your social security number, or your credit card info.

3. Safe Tips for Vehicle Sellers: How to Avoid Car Scams

In the event that you encounter any of these warning signs, there are steps you can take to avoid or minimize risk.

  • Know where the money is - The best way to finalize a sale is with the cash in hand. But, if you are willing to accept a money transfer or check, always ensure the money has cleared and is in your account before you hand over the keys.
  • Don't start shipping without finalizing the sale - This follows on from the above. The car should never be out of your sight until you have the money in your account.
  • Only use reputable escrow services - Be sure the third-party platform you are using has a good reputation, such as PayPal.
  • Know who you're dealing with - It is important to know as much as possible about a potential buyer. This means confirming their phone numbers and asking to see legal identification such as a driver's license and/or proof of address.
  • Keep documentation - Following on from the above, you should keep careful notes of every step in the sales process. If something does go wrong, you can then give a detailed account to the authorities.
  • Trust your instincts - If, at any point in the interaction, you get the feeling that something is off, rather just cut ties and move on. There will be other buyers, so there is no risk to feel pressured into doing something that makes you uncomfortable.
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4. Where to Report Fraud or Who to Contact for Help

Internet car-selling scams are crimes, just like any other fraudulent activity. As such, there are certain actions you can take if you suspect you are being targeted, or if you have already suffered from internet used car-selling scams. In the USA, you should always report any potential scam to your local government at the state consumer protection office as well as the Federal Trade Commission. If you have already lost money or your vehicle, it is also a matter for the police so they should be informed, too.

More broadly, you can also report potential scammers to the US Federal Government. However, due to the large number of reports they receive, you will likely not receive any follow-up communication, so ensure that your report is detailed. Even if you do not receive feedback, do not feel discouraged. Your information could help others avoid the same troubles you have been through.

FAQs

What can I do to avoid used car scams?

If you want to know how to avoid scams when selling a car, there is a lot of information on the internet. Most online automotive resources deal with this problem and give the top tips on avoiding these con artists. Essentially, you need to keep your wits about you and trust your instincts. If something feels wrong or too good to be true, it probably is. Do not accept money orders or checks without verifying the availability of the funds, and do not accept payment plans.

What is the safest way to pay for a car privately in 2021?

While it may seem like a cliche, there is a certain amount of truth to the old adage that cash is king. Hard currency can be forged, but this is usually far beyond the capabilities of the common online scam artist. In the event that a direct exchange of money is not possible, you can rely on certain third-party organizations such as PayPal. However, the onus is upon you to ensure that the money is truly in your hands before you allow someone to drive off with your vehicle or ship it to them.

Are car dealerships scams?

For the most part, car dealers are reputable businesses. However, some of their practices do border on scam-like behavior, while some online dealerships may be entirely fabricated. Some car dealer scams to avoid include: lost financing, fake credit check results, failure to pay off trade-in loans, and overcharged dealer prep fees. While not technically illegal, these "scams" can cost you a lot of stress and money in the long run. There are also some car rental scams to avoid, such as: mandatory insurance fees, fake car damage reports, inflated overdue charges, and deposits that are fully charged rather than held. You are strongly urged to look into these and other similar malpractices when buying or renting a vehicle. For more guidance on smart car buying tactics, be sure to read our post on here.

What other car scams should I be on the lookout for?

There is a lot of research on scams around the world, and the people who perpetrate this crime are constantly adapting and changing their M.Os. Some of the most common car-related scams to be aware of include: title washing, fake escrow accounts, "push, pull, or tow" scams, negative equity, and dealer addendum scams. These are certainly worth taking a look at when buying or selling a vehicle.

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