Buying or selling a car is one of the biggest financial decisions the average person is likely to make. Unfortunately, that makes the whole process ripe picking for scammers to take advantage of our good faith. Parties will pose as either a buyer or seller and use that pretense to get ahold of bank information or other data which they can use to siphon money illegally. These cons can be easy to spot, however, if you know the signs. So here are common scam techniques, and simple ways to suss them out.
The PayPal Scam
This one has already been encountered many times by The Starting Line's team. It starts with someone offering to buy a car like any other customer, but then the caveats start coming in. They can't check out the vehicle in person. They'll be sending someone else to pick it up, and they can only pay for it via online credit service like PayPal or Venmo.
Most likely these scammers never intended to collect the vehicle in the first place. They're simply using this as an opportunity to send the seller to a dummy lookalike PayPal site which can used to phish out their sensitive banking info. It's also possible, but less likely, that the scammer has hijacked someone else's legitimate account and plans to use their money to acquire a "free" car. The seller then legally has to refund the stolen money while the scammer is flipping the car three states over.
The "Widow" Scam
This one is very popular on less-regulated online markets like Facebook or Craigslist. It usually starts with a car that's only a few years old, and listed well below fair market value. The seller state's that it's going for a "too good to be true" price because their husband just passed away and they need to sell it quick while they move out of state. In reality, their probably is no car. The images are usually just copy-pasted from legit listings. The scammer will demand payment in the form of a wire transfer or even gift cards and then promptly cut off contact.
The Title Lein Scam
With this tactic, the con man will sell you a legitimate vehicle, but without disclosing that they were already underwater on car payments. If the financier has placed a lien on the title of the vehicle, that means that the new buyer could be on the hook for picking up the payments. They may even face risk of repossession by the bank. If buying a car from an individual, the safest thing is only look at ones which have already been paid off.
Now that we've gone over some common scam tactics, let's teach you the easiest ways to avoid them.
Meet Face to Face, Ask Questions
The quickest way to sniff out a scam is asking the third party if they'll meet in person. Grifters generally don't want to give their marks any identification which can lead back to them. So nine times out of ten, if they won't show you their face, they don't plan on making a legitimate transaction. Specialty vehicle sales like those conducted by The Starting Line are slightly different, since our customers may be states or countries away. In cases of long distance, ask them to conduct a Zoom or Facetime meeting. If the other party is willing to show themselves, it builds a lot more trust.
Also don't be afraid to get for more identifying info. Ask how they plan on using the vehicle. Check out any public social media profiles. The fake persona of a scammer usually doesn't hold up to much scrutiny, and they'll probably cut off all contact once you start asking more personal questions.
If you're looking to buy a car, also ask the potential seller for a couple new photos. Be sure to get a VIN if one isn't on the listing. If the other party keeps finding excuses not to provide you with a VIN, that's a surefire sign to walk away. You can also do a quick reverse image search on the listing photos to make sure they weren't just taken from another site.
Go Through Banks
Although PayPal and Venmo are quick and convenient for small money exchanges, we would not recommend using them for several thousand dollar transactions. Same goes for Western Union wire transfer. ACH direct deposit through reputable banks is one of the most secure methods of payment you can use, although it usually takes a few days for the money to clear. Lastly, if someone is demanding payment through iTunes gift cards, they are 100% trying to play you.
If the car is on the cheaper side, you or the other party may elect to pay for it in cash, which is the easiest way for money to physically change hands. When exchanging cash, you'll just want to be sure to do it in a secure public area where both participants can feel comfortable.
Get an Intermediary
For people that simply don't want to deal with the hassle of dodging scams and haggling prices, The Starting Line also offers our One Less Thing buying service. For a $1,299 fee, we'll personally vet third party sellers, inspect vehicle condition, and negotiate on price. So far, we've saved customers an average of $2,800 off of car listing. All you have to do is pick up your new car, and enjoy!