If you’re in the market for a new or new-to-you car, you may be considering purchasing one online. If this is the case, you’re not alone. Auto shopping online has been gaining popularity in recent years and has become even more in demand during the COVID-19 pandemic.
While there are many legitimate opportunities to find vehicles online, the Better Business Bureau recently released a report highlighting an increase in online car buying scams, as well. To help you distinguish between a good deal and a fraudulent seller, we’ve compiled information about online car buying scams and how to avoid becoming a victim.
An online car buying scam operates similarly to an undelivered goods scam. In an undelivered goods scam, the scammer sets up an online store advertising a product or good (i.e. cleaning products or medical supplies). They take your credit card information as payment and never deliver the goods.
In an online car buying scam, the scammer advertises a vehicle for sale, often at a price that seems too good to be true. Once a potential buyer says they’d like to purchase the car, the scammer directs them to send the money, typically via a wire payment. After payment, the scammer says they’ll arrange to have the vehicle shipped or delivered to the buyer, but the buyer never receives the car.
According to the Better Business Bureau, it’s common for scammers in online car buying scams to have the payments sent to a third-party escrow company, claiming that this company will hold the funds until the buyer receives and accepts the car. However, in these fraudulent cases, scammers typically create their own fraudulent third-party escrow company for this purpose. This means that they receive the money as soon as it’s wired, and it’s very difficult to get it back.
The best way to protect yourself from an online car buying scam is to know the red flags to watch for. We’ve listed some common red flags below.
While it can be disturbing to hear about online car buying scams, there are many legitimate ways to shop for a car online, but you must be committed to doing a bit more legwork than if you were buying in person. Follow these tips to get started on the path to a positive online vehicle purchase.
For more information on common scams and how to keep yourself safe, visit the security section of our blog.