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6 Scams To Avoid When Selling Your Car

Online car sales offer great convenience and numerous benefits. But, at the same time, the internet and social media have become a haven for scammers. The number of people who would try to get their hands on your car without paying a dime has drastically increased. From phony wire transfers to identity theft, there are many types of fraudulent activity that could potentially lighten your account by thousands of dollars.

The good news is that you can avoid car selling scams by taking a few precautions. Here’s everything you need to know to avoid falling victim to fraud.

How to Identify Potential Car Sales Scams

Even though not all buyers will engage in car sale scams, it’s a good idea to keep an eye out for these warning signals to avoid potential issues:

The buyers insist on purchasing with a money order or check

Even though there are authentic money orders and checks, fraudsters will employ fake ones. Signing the title over before the funds are cleared only to find out they are fakes is something you undoubtedly want to avoid.

They want to buy the car before they've ever seen it

Such a proposal is a major warning signal that casts doubt on the payment's legitimacy. The con artist can assure you they will transfer the money or mail a fake check while someone else comes to pick up the car, hiding the fraudster’s identity.

They intentionally “overpay”

A fake overpaying attempt is one of the biggest scams in private car sales. It involves the dishonest customer sending you a cashier's check or money order for an amount greater than the purchase price. They'll then say they were mistaken and ask you to refund the excess. Any money you send them will be wasted because the initial money order was never valid.

They ask to pay in installments

Asking for regular payment installments is another popular scam. Because there is no way for you to get paid if the prospective car buyer fails a payment, it’s best to decline these offers.

They demand personal data

Scammers would promise to transfer your money and ask for your account details, Social Security number, or other personally identifiable details. This is one of the signs that there may be an attempt at identity theft.

The buyer uses a fake escrow service

Using an escrow service might initially seem secure. However, if the provider is one you don’t know about, chances are it’s fraudulent. If that’s the case, the money might be suddenly removed from escrow just after you transfer the title and the fraudulent buyer takes up your car.

Photo by Olya Kobruseva

How to Sell a Car Without Getting Scammed: Top 9 Tips

When selling a car, you must be careful to avoid becoming victims of common scams. Here are the top tips to help you protect your vehicle.

Screen the interested buyer — If you think the person you're talking to is a con artist, cut them off and block their number. Screen prospective customers carefully and ask them questions to help you determine how serious they are about your car and find out whether they have arranged finances.

Redact personal information — It’s expected that the prospective buyer may want to see the vehicle's service records. However, you should redact sensitive information that can facilitate identity theft.

Verify the escrow provider — Always do your homework on the buyer's proposed escrow provider and go via a reputed bank or lawyer to ensure the account is legit.

Register everything — Document important data such as the buyer's name, address, phone number, and any other important details that you may need if you find yourself in one of the car selling scams.

Never sign the title before the money is cleared — Wait for the buyer's payment to settle with your bank if they pay using a check, wired funds, or money order. If possible, go through the buyer's bank to get a quick answer as to whether the money is there.

Never accept payment in installments — Remind anyone who requests to pay in installments that you are not a financial institution and refuse to take their payment. After all, if the person doesn't complete the payments, you have no leverage and no legal enforcement options available to you. A legitimate buyer that doesn’t readily have the money can get a bank loan, make the payment in advance to you, and then repay the bank.

Be careful with the test drive — If you allow the potential buyer to take your car for a test drive before sealing the deal, ensure that you keep their driver's license. A real buyer won’t have a problem with this. Also, it's best to meet them in public. Choose a parking lot or a local park rather than your house.

Use common sense — One of the best ways to protect yourself from car selling scams is to utilize your intuition. Don't make a hasty decision. If the initial offer seems sketchy, it may be better to wait for a legitimate buyer to show up.

What to Do if You’ve Been a Victim of Car Sales Scams

If the worst happens and you become a victim of used cars scams, follow these steps.

  1. Jot down what you know about the bogus buyer — The authorities will need as much info as possible when you report the scam, so compile all the information you have on the con artist before doing so. You communicated with them to discuss the vehicle, so you should have their name and contact information.

  2. Alert the police — Contact the police as soon as you can to report the event. Call the local hotline for non-emergencies to inform the authorities of the event or go directly to the station.

  3. Call your financial institution — If you’ve deposited a check, call your bank to see if it has been received and cleared. Usually, you can get this information in two days. There is a good chance that you've been scammed if it bounces. Make sure to explain what happened to your bank, let them know you've informed the authorities, and ask them to waive any fees related to a bounced check.

Photo by Mikhail Nilov

The Bottom Line

Car selling scams are more common than ever but you can protect yourself and avoid scammers by taking your time and being cautious when speaking with potential customers.

That being said, selling your car to a reputable full-service salvage yard like Orthodox Auto Company is the safest option if you want to make sure that you won't unintentionally fall prey to scammers. You’ll get a top-dollar quote and get paid with a guaranteed company check as soon as it’s confirmed that your car meets your description.


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