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How to avoid online car buying scams Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial choices by offering interactive tools and financial calculators as well as publishing unique and impartial content. We also allow users to conduct research and compare information at no cost and help you make sound financial decisions. Bankrate has agreements with issuers, including but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this site come from companies that compensate us. This compensation can affect the way and when products are featured on this site, including, for example, the order in which they be listed within the categories of listing and other categories, unless prohibited by law. Our mortgage home equity, mortgage and other home loan products. But this compensation does have no impact on the information we provide, or the reviews that appear on this website. We do not cover the vast array of companies or financial offers that may be available to you.



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5 min read published on October 13, 2022.
Writen by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers with the details of taking out loans to purchase an automobile.







Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping readers gain confidence to manage their finances by providing concise, well-studied and well-researched content that break down complex topics into manageable bites.









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The ability to purchase a car from the convenience of your home just a couple of clicks has its perks however, it comes with some risk. Similar to the rest of the online world there are scams that have slipped into the online world. Beware of the common scams to ensure you don't make a loss while shopping for a new vehicle. Most common scams when buying a car online These are the scams FTC (Federal Trade Commission) provides guidelines for online vehicle sales --but there are several common scams to look out for when . Identity theft Some scammers aren't just looking to swindle you out of your money , but they also want to collect your personal data. They may ask for information such as the details of your Social Security number, birthdate or bank account numbers. Don't share your personal information with potential buyers, excluding your name and number. If you do apply for a position an opportunity, ensure that the seller is authentic, licensed and has positive reviews. Otherwise, it may be more beneficial to apply outside of the dealership -or visit a place where to verify you are above board. Fake ads When you are searching for an auction You may come across advertisements that don't include the VIN, or the number that identifies the vehicle. If you're not able to verify the authenticity of the vehicle is actually present -- that is, seeing it personally and verify you are sure that the VIN is valid Don't pay. It's not unusual for scammers to present vehicles in ads but not have it. And even if the vehicle exists, confirm that it is not reported as stolen and it is clean on its history report. The Curbstoning scam occurs when a dealer pretends to be a private seller with the intent to sell a vehicle that doesn't comply with the normal regulations of dealers -- meaning it has a salvaged title or has been damaged in any way. A salvaged title can cause major headaches when it concerns insuring the vehicle. Avoid this fraud by staying away from vehicles sold online from vacant lots, on the side of the road, or at the home of the seller. And as with any private sale, make sure you confirm that the seller and VIN are authentic prior to signing a contract. If you are buying a car sight-unseen, never agree to purchase a vehicle without having seen it. Not only is it best to take your car to a test drive purchasing it without seeing it could mean that the car may not be as pictured or, even worse, may not exist in any way. If the seller pressures you or asks you to complete a fast sale before you can see the car in person, it's likely to be a fraud. Ask for wire transfers or gift cards If the prospective seller demands wire transfer in exchange for car payment, do not accept it. This is a tactic that scammers use to take your money , but with no return vehicle. Wired money isn't trackable and is very difficult to retrieve. This means you may be left with no car , and there is no possibility of reimbursement. Similar to scammers that want to make payments via wire transfer, a few sellers will request gift cards for the payment. Don't be fooled. Gift cards cannot be traced and indicate that the seller is likely attempting to scam you. Title washing Title washing is a strategy to cover up damage caused by the wreck or other issues with the car's history. If you do have to pay for it make sure you get a car history report to the VIN. It's not guaranteed to reveal everything the car has gone through but it can help you avoid falling prey to a scammer seeking to sell a risky car. Fake escrow account Although this scam can take place in two ways, be aware of the use of an escrow account that is fake when purchasing a car on the internet. Using an escrow account is legitimate method to keep both parties safe from fraud. However, scammers may use an escrow account that is fake to trick you into depositing funds directly into the account of the seller. When it comes time to pick up the vehicle and to transfer the title the seller has stopped being in contact with you -- and you are left with no way to recover your money. Is online car buying a good idea? If you go through an authorized service, buying a car on the internet is exactly as secure as buying from the dealership. Even if you go with an individual seller, don't be a victim of a scam happening deter you from buying. By being an informed consumer You'll have a lower chance of be fooled and will be more likely to walk away content with your purchase. Benefits of buying a car online If you know the types of scams to look out for and look up a reliable source, purchasing a car online has its benefits. First, it helps save time. You don't need to go to numerous dealerships and spend time physically browsing through inventory on a lot. Shopping online gives you endless possibilities for shopping. As you're not limited to the selection of a dealer, you may be able to find a more precise suitable match to your needs. No sales pressure because, at the end of the day, you'll be browsing through websites via your computer or phone without having to deal with professional salespeople. If you decide to purchase something similar to Carvana or Vroom and you'll be able to access to delivery across the country. There might be a small charge, but if find the right car, it might be worth it. There are some disadvantages to buying cars online. In addition to fraud, there are a few reasons people still choose traditional dealers: Big online sources don't mean that there is no negotiation. You will be able to negotiate with a private seller, though you will run the risk of being victimized by fraud. Some lenders will not provide financing for a private sale when you search online. Should they, then you could be surprised to find the costs are higher than with the purchase of a used or new vehicle loan. You may not be able to do an in-person inspection until you meet with the seller or have the car delivered. It could be even harder to get a mechanic to inspect the car when you buy it on the internet. What to do if you've been scammed If you suspect that you've fallen victim to an online fraud, there are a few steps you should do. Make a formal complaint directly to the fraud center. Call your local attorney general. Report the fraud to the FBI . The FBI will report the fraud to the . It could be difficult or impossible to receive your money back if you sent the money via wire transfer or transferred gift cards. However, keep track of your bank activity if you entered any information on a fraudulent website. If you see any activities, notify your bank about the fraud and reset any usernames or passwords linked to the account. The bottom line If the price of a car seems too amazing to be real, it probably is. The purchase of a car online could be a safe method to get a used vehicle. But you need to be aware of frauds that are common and trust your instincts. If you notice something that seems suspicious there's a good chance it's. In all times, there's a lot of used cars on the market. You are able to opt to walk away from a deal and locate a different, authentic seller via trustworthy websites, or go with the used car dealership. Find out more


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Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the details of taking out loans to purchase an automobile.



Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping readers gain confidence to manage their finances through providing concise, well-researched, and clear information that breaks down otherwise complicated topics into bite-sized pieces.






Auto loans editor




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