myautoloan color logo for desktop
accredited: trusted:
back to articles

Author:

Categories:   Tips & Insights For Car Buying    Auto Loans & Financing    Buying & Selling Cars   

Online Car Buying: The “Price Too Good to Be True” scam

Car scams are becoming a modern-day pain in the neck. What starts as an exciting shopping journey, can end up a complete disaster! The advent of technology has made our life easier. Unfortunately, it’s also made life easier for online fraudsters. So, what are the different types of car scams and how can you ward against them? Read on to find out.

content article banner image


Car scams are becoming a modern-day pain in the neck. What starts as an exciting shopping journey, can end up a complete disaster! The advent of technology has made our life easier. Unfortunately, it’s also made life easier for online fraudsters. So, what are the different types of car scams and how can you ward against them? Read on to find out.

Scams for Buying Cars Online

Online car transactions are quite common. This includes wire and bank transfers. These online methods are susceptible to hacking. Also, popular shopping forums like Craigslist are ripe for car-buying fraud. Sellers know that buyers are eager to find a good deal. As eager as you are to buy, they are just as eager to defraud. They prepare elaborate stories to defraud the innocent. It is quite sad.

Getting the right vehicle is very important, figuring out how to pay for it and getting a car loan are also critical parts of the car-buying process. Figuring out your budget and financing can help you gauge how much car you can afford, helping you narrow your choices.

What is the “Price Too Good to be True” Scam?

This is the scenario: a buyer sees the car of their dreams priced ridiculously low. They get excited. Next, the buyer discovers the seller and vehicle are out of the country. They are then duped into transferring funds across borderlines. The promise is that the seller will have the vehicle shipped over. The reality is that buyers will never see the car. In most cases, they never get to see their money again either.

The rise of Escrow Scams

When used correctly, escrow is an efficient and secure service. It’s meant to provide protection to both buyer and seller. Either party may request the release of the funds after the parties have met all conditions.

Yet, unscrupulous fraudsters misuse this to their advantage. They use the existence of this service as a tool to gain a buyer’s trust. In actuality, they never intend to use it. Instead, they set up a counterfeit and abscond with your funds. Cars priced under market value are red flags for this type of fraud.

Identity theft is often a common thread in the above scenarios. There are many ways identity theft happens. Consider engaging an identity protection service. This conducts credit and non-credit identity monitoring services. It does so through public records and the internet. An identity protection service could be your life-saver!

How to Detect & Avoid Scams

There is good news. You don’t have to live in fear at the thought of buying a used or new car. The National Consumer Leagues provides the following tips:

  • In a transaction, NEVER use bank-to-bank transfer or wire money. These methods are highly susceptible to online scams.
  • Deal locally AT ALL TIMES when buying or selling a car. This is true for other high-value merchandise as well.
  • If someone is unwilling or unable to meet you in person, DO NOT sell or buy a car from them.
  • If you have not laid eyes on a car or had it inspected by an expert, DO NOT buy it. Consider doing a vehicle history check. Unfortunately, these have also been subject to scams. Fraudsters have even used bogus vehicle identification numbers.
  • DO NOT transfer the title until the method of payment from the seller has cleared. This is true for all types of checks; certified or not. Ask your banks how long it will take for the check to clear. Even where a bank makes funds available, it does not mean the check is legitimate. Be careful to verify this with your bank.
  • DO NOT believe anyone who claims that a 3rd party platform guarantees a transaction. That would not be true at all. Forums like PayPal and eBay cannot guarantee that a transaction is not a scam.
  • BE WARY of sellers in a rush. Don’t let them put you under pressure to complete a deal. You need to take as much time as you need to examine all factors before closing.
  • To establish phone contact, CALL the buyer or seller to establish phone contact. BEWARE of anyone who neglects details agreed to beforehand. If they are cagey with answering specific questions, it is likely to be a scam.
  • ALWAYS have faith in your gut. There is usually a fire where there is smoke. If something sounds too good to be true, you better consider that it probably is. Online classified ads get a flood of buyers and sellers every day. There is no shortage of buyers and sellers. It will be worth the wait for the right deal.

In the distant past, we used to worry about physical theft. We were either going to get robbed in broad daylight or under the cover of night. Thieves have become so much more sophisticated. They manipulate the very technology that was created for our benefit. This is true with online car transactions. Thankfully though, knowledge is power. With the right information, you can avoid online car buying scams.

Apply Now