Scammers pretending to sell used cars online can’t wait to get their hands on your money.

3 minute read

Legitimate online car buying platforms such as Carvana, Vroom and Carfax are more popular than ever, and the convenience of online shopping is even more apparent due to the COVID-19 pandemic. Many consumers turn to shopping for a new or used vehicle online for a stress-free, convenient car-buying option. So it’s not surprising that online auto sale scammers have also kicked into gear to get their hands on your hard-earned money.

Most people know to watch out for scammers on Craigslist. But did you know that you could also get scammed buying a car from a reputable online auto marketplace – or a site that seems legitimate, but isn’t – if you’re not careful?

These five tips will help put car-buying scams to leave in your rearview mirror…

Phony ads

Criminals may post fake ads for vehicles they don’t actually own on online auto auction and sales websites such as eBay Motors or similar legitimate auto marketplaces, according to the Federal Trade Commission (FTC).[1] They may offer to chat online, send additional photos or answer questions and might even falsely claim that the purchase is protected by a big-name retailer’s buyer protection program. The scammer may even send a fake invoice, demanding that you pay with eBay gift cards.

“Trusting buyers have lost hundreds of thousands of dollars over the past year alone,” says the FTC. To investigate whether an online car sale is fake, search online for the seller’s name and contact information, adding “review,” “complaint” or “scam” to your search terms.

Website impersonators

Fraudsters may hide behind fake websites that look legitimate until you dig a little deeper. For example, a few years ago, scammers used a fake website impersonating Edmunds, a car sales marketplace and auto resource.[2]The scammers had only one purpose in mind: To steal your money by promising to hold your cash until the vehicle is delivered, which never happens.

The fake website claimed that Edmunds was offering a cash escrow service in which the company served as a middleman between private-party car sellers and buyers. However, a closer examination of the actual Edmunds site would have revealed that Edmunds doesn’t assist with private-party buying or selling transactions or ship cars.

Before you buy or sell a car online, make sure the website you’re browsing is legit. Make sure the website domain name ends with the name of the company, such as Edmunds.com, not Edmunds.com.us.info-vehicle.com or some other fake domain name.

Title washing

Title washing is a common scam where crooks change or remove information on a used car title.[3] The missing information typically includes crucial history factors about the vehicle that could influence whether you buy the car.  For instance, if a car was wrecked and declared a total loss, the auto should have a “salvage title.” If the vehicle was damaged in a flood, it will have a water-damage title.

Most people don’t want to purchase a vehicle that’s been totaled or swept away in a flood. But crooked online car sellers will try to trick you into buying one anyway.

Demands for gift card payment

Back away from sellers demanding that you pay for a vehicle with prepaid gift cards or by wire transfer. Never pay with gift cards or wire transfer, warns the FTC: “If anyone tells you to pay that way, it’s a scam. Every time.”  With gift card payment scams, the scammer tells you to pay for the vehicle with prepaid gift cards and promises to deliver the vehicle in a specific time frame. But the delivery never happens.

“After the transaction is complete, the criminal typically ignores all follow-up calls, text messages, or e-mails from the buyer or may demand additional payments,” according to the FBI.[4] “In the end, the vehicle is not delivered and the buyer is never able to recuperate their losses.”

Urgency to complete the sale

If the seller tries to rush the sale, refuses to meet you or let you inspect the car, and uses high-pressure tactics to get you to purchase a vehicle without adequate time to perform due diligence, that’s a sign that something fishy is going on.

Online auto sale scammers have a laundry list of excuses why they can’t meet you in person, such as military deployment or living abroad. They may claim they had to move due to a job transfer or received the car they’re selling as part of a divorce settlement. If you suspect the seller is a scammer, slam the brakes on the deal immediately and keep looking for a legitimate seller.


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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

Published by Debt.com, LLC