How to Avoid Getting Scammed While Selling a Car
It is just as dangerous to be the seller of the goods, as the buyer, in a digital marketplace
According to the Department of Motor Vehicles, there are eight tips to help individuals avoid getting scammed when selling a car. Additionally, there are six common vehicle sale scams sellers should be aware of. The Denver Post reports, one-third of all vehicle sales by private owners occur through sites like EBay and Craigslist. In many cases, it is just as dangerous to be the seller of the goods, as the buyer, in a digital marketplace.
Colorado Department of Motor Vehicle
Common vehicle sale scams
Urgency seems to be the biggest scam of all, when it comes to the transfer of goods through digital platforms. When a potential buyer offers to buy a vehicle prior to seeing it, a red flag should go up, because the inspection of a vehicle is the responsible thing today before investing in a big-ticket item. The Better Business Bureau has issued a warning to consumers of an increase in scams found on digital platforms like Facebook Marketplace.
Another example of urgency, usually involves overpayment for the goods, to allow for the expedited shipment of the goods. This can also lead to the request for banking information to make direct deposits, but this involves the seller trusting the person enough to give them this personal information. People asking for personal information is another red flag, because there is little need for this information, especially prior to any transaction potential.
Payment by check or money order has become a popular scam, because they usually look like official checks and money orders, which should both be viewed “like cash.” Offers of escrow services are also potential scams, because there is a chance the escrow service itself is a scam. Payment-plan offers are never a good idea, because there is now way to enforce the payment plan until some time has passed, and a proper contract stating the payment plan is in place.
Always verify checks prior to deposit and never ship car before payment clears
All payments should be verified prior to the transfer of the title. Road and Track claims, Craigslist scammers like to do their business face-to-face, to help put the potential victim at ease. Even though a face-to face meet occurs a check should be verified prior to depositing into the bank. If the check bounces in the account, the owner of the account is responsible, not the check writer. Not only did the seller lose out on a sale, but they incurred a fee from the bank to boot.
When the potential buyer claims to be unavailable prior to the sale, questions need to be raised, because if the person lives overseas, there is more work involved than if the person lived nearby and could pick up the vehicle in person. If the buyer’s check is able to be verified it is okay to deposit, but it is not okay to ship the vehicle anywhere until the check has fully cleared. This process can take anywhere between seven to ten business days.
Once the check has fully cleared, the seller if able to complete the sale process, which is why it is always better to take cash for these types of transactions. Insufficient funds is one reason for a check to bounce, but the check writer can also pay their financial institution to place a stop payment on the check. A stop payment implies they feel the check ended up with someone it did not belong to. This reality is why it is important to wait the proper number of days to ensure there was no funny business going on.
NBC Chicago discusses the use of EBay Gift Cards in car buying scams. In one case, the victim bought the gift cards and provided the numbers to the scammer right over the phone. Sellers should always be concerned if a buyer is offering gift cards as a method of payment. Gift cards have numbers like a debit, or credit card, which means the funds on the card can disappear at a moments notice.
Document Everything and Escrow Services should be Decided by the Seller
While selling a vehicle it is important to document everything. This is especially useful if an investigation is needed later on. Information that should be kept includes, phone numbers, names, town of residence, and other relevant information provided by potential buyers. Remembering information about potential buyers is good for business, because it shows the buyer you are interested in their business and value the potential transaction.
Once the vehicle sale process has moved from potential to upcoming, it is important for seller to decide on escrow services if needed. It is important for the seller to control this aspect of the sale, because they need to protect their goods. It is recommended to use a reputable lawyer, or financial institution if the services are needed. The escrow service could incur yet another fee, but a necessary fee if the buyer is also trying to protect themselves from a scam as well.
Screen Callers and Ask for Driver’s Licenses to Filter Potential Buyers
Screening calls can help any seller avoid as much unnecessary time on calls, as possible because many people do not feel comfortable leaving messages, or their contact information over the phone. If the person is not willing to leave a message and a contact number, they might not be as serious about the vehicle as needed to complete the sale. Additionally, it also helps with the documentation process, if the seller takes time to document the individual phone numbers, the messages they apply to and if there are any inconsistencies. Scammers tend to have multiple methods, so it is important to keep people honest.
Asking for a driver’s license is a good way to filter through the potential buyers earning a call back from the initial screening process. Some may argue it is unnecessary to ask for a driver’s license prior to any transaction, but this can be combated with the premise no one is allowed to drive the vehicle without a proper license. This is essential prior to letting anyone take the vehicle for a test drive, because it also lets the seller know exactly who they are dealing with. It is also recommended to go on the test drive with the individual, you never know.
Always Meet at a public place
Meeting up for test drives and transfer of sale
It is just important for the seller, as it is for the buyer to have test drive occur. Yes the buyer needs to make sure the vehicle works properly, or doesn't have any undisclosed damage they were previously unaware of. The buyer can even as to reconsider the price based on any discoveries. The meeting place for a test drive should be at a public location. This helps protect the seller from potential buyers knowing where they live, or work.
This is why it is important for the seller to be upfront and honest about their vehicle. This includes any documentation proving the maintenance of the vehicle, proof of vehicle inspection. Additionally, the seller is also able to document the buyer came and inspected the vehicle. This is important for the transfer of sale aspect, because the transfer of sale doesn’t end with the transfer of the title, but should also include a bill of sale, and a release of liability.
Selers should check with their local Department of Motor vehicles to determine what is specifically needed for a vehicle sale in their state. The release of liability is why it is important to have the buyer inspect the vehicle, because this usually focuses on the sale being “as is,” which means the buyer cannot come back later if something happens to break on the vehicle. In many cases lemon laws are unable to protect consumers once the car is older than a few years old, so buyers should be extra careful when making purchases. Once the transfer of documents has occurred, it is important to make sure that all unncessary personal information is blacked out to make sure there are no risks for identity theft in the future.
When selling a vehicle expect your car to be compared to others
The Blinker App Helps Minimize the Threat of Scams for Buyers and Sellers
Blinker announces, their easy-to-use app helps buyers and sellers meet in a secure setting, which promotes transparency during the car buying process. This app can link potential sellers with potential buyers, while offering flexible payment plans for approved buyers. The seller gains the opportunity to sell their vehicle without having to pay any fees like traditional digital marketplaces like EBay. Blinker verifies the information about the vehicle, individual parties, and completes the paperwork.
By Kristina Lasher
Denver Post: Used-car app Blinker takes aim at market dominated by Craigslist, eBay
NBC Chicago: High School Student Loses $1,200 in New Gift Card Scam
The Better Business Bureau: Scam Alert: Shoppers Beware of Facebook Marketplace Cons
Road and Track: How to Avoid This Common Craigslist Car Buying Scam
The Balance: How to Recognize Common eBay Scams Against Buyers
The Blinker App: Blinker FAQ