What You Need To Know About Buying a Car Online
Buying used cars over the Internet is convenient—and it’s also a great place for scam artists, looking to get their hands on your money.
In recent years, along with the increase in online car purchases, there’s been a huge rise in online fraud. According to the 2012 Internet Crime Complaint Center annual report, online auto fraud accounted for over 17,000 complaints, adding up to $64 million in consumer losses.
The scam usually begins with a used car being advertised on a respectable website – with some urgent-sounding reason for an incredibly low asking price. Before you decide on buying the type of car you want, get a quote on car insurance for the vehicle to see what it’s going to cost you.
Online car-buying scams are getting more sophisticated; increasingly, they are using website designs that look very similar to the legitimate companies’ websites, sometimes even displaying the legitimate companies’ logos.
Scammers are even going so far as to include 800 numbers and live-chat with unsuspecting buyers to provide more detailed information on the fake buyer-protection programs they play up.
So, what can you do to prevent from becoming a victim? First, watch out for these red flags.
Avoid sellers who:
• Advertise cars at too-good-to-be true prices.
• Want to move transactions from the original website to another site.
• Claim that the transaction is guaranteed by PayPal, Craigslist, eBay, or other online marketplace. These sites do not guarantee that people using their services are genuine.
• Refuse to meet in person or allow potential buyers to inspect the car ahead of time.
• Ask for funds to be wired ahead of time. (Scammers use wire transfers because it’s the same thing as sending cash in the mail. Once the money is gone, it’s lost for good.)
• Demand immediate payment due to some phony reason, such as military deployment or a tragic family emergency.
• Require that the money be sent to a specific escrow account. You should choose the escrow service.
Actions to protect yourself:
• Call the seller to establish phone contact. If the seller ignores details agreed to via e-mail or is unable to answer questions about their location or the car’s whereabouts, it’s probably a scam.
• Get your own CARFAX report (Scammers pull real CARFAX reports of real cars to represent fake listings.
• Check with the National Insurance Crime Bureau. Their free database includes flood damage and other information about a car’s history.
• Verify that the online escrow company you are using is legitimate. Check their Web site for spelling or grammatical errors – they may have been copied from real sites.
• Visit the escrow’s Web site directly, not through a link sent to you by the seller.
• Research the escrow company through the Better Business Bureau.
Remember, the crooks cast a wide net for potential victims, sending out millions of e-mails in hopes that someone bites. Do your own research before you do any business online and make sure you know how much your car insurance will cost before you buy your new car.
Have you bought a car online? Feel free to share your thoughts in the comments section below.