Under The Hood

How To Avoid Scams When Selling Your Used Car Online ( 4 Steps)



Selling your used car to a private buyer online is a great way to do things:


  • It’s fast: You’ll get offers much sooner listing online than posting a sign in your neighborhood or bothering your friends, family, and co-workers.

  • You’ll get more $: Private buyers will pay more for your car than auto dealers since they aren’t flipping it for a profit, or paying sales tax on the transaction.


But while selling online is great, it can also be risky if you don’t know what you’re doing. The internet is an anonymous place, which makes it susceptible to scammers.


But never fear. Follow these 4 steps and your  online car selling experience will be safe, smooth, and scam free.


  1. Verify the identity of your buyer


Never do business with an anonymous person who offers to buy your used car sight unseen. Any legitimate buyer is going to want to check out your car and make sure everything is in working order before they purchase.


A good way to verify your buyer’s identity is to ask for their drivers license and insurance card  before they test drive your car.




Confirm that the information on their drivers license and insurance card match ( especially if they are claiming to be Thor).




  • This will ensure that they can legally drive your car ( assuming their DL and insurance are not expired ).

  • It also lets you verify that the person in front of you is the same person you’ve been talking with online.


If the buyer lets you, take photos of their drivers license and insurance card. If they don’t let you take pictures, at least jot down the pertinent information, like their DL number, and insurance card company and policy number.



2.  Accompany them on the test drive


Worried about your buyer taking a test drive and never coming back? While this is a highly unlikely scenario (especially after giving you all their personal information) it never hurts to take extra precautions.


This also gives you an opportunity to sell your buyer on the features of your car as they drive. For example, perhaps it has bluetooth capability and a great sound system.  Find out what kind of music they like, and play it as you drive.



Extra safety tips:


If you go on the test drive alone with the prospective buyer, it’s also a good idea to let a friend know the route you plan to take, and approximately how long you’ll be gone.


In fact, the ideal situation would be to have a friend physically present during every step of the buying process.


Remember, there’s safety in numbers!


3. Complete your transaction at the bank


Specifically, the bank of the buyer.


The majority of scams occur through fake cashier and personal checks. If a buyer offers to write you a check, verify with their bank that they have available funds in their account for the transaction.


Never sign over the title to your car until you have the cash in hand. The reason for this is that it takes a bank a few days to clear a check. You won’t know if your check is a “rubber” one until then.


Other scams to watch out for:


  • Shipping Scam  


The premise behind every successful scam is using the victim’s own greed against them.  In this scam you’ll receive a check for far more than your car’s selling price. They’ll say that the “extra” money is to compensate you for shipping the car to them, and ask that you send the money to their shipping service.  


You wire the money ( shipping costs between $600- $1000),  only to find out the check is bad a few days later. Yikes.


  • Paypal Scam


In this scam, the buyer will offer to purchase your car sight unseen, and ask you for your paypal address so they can send you money. Since Paypal is known for being secure, lots of people fall for this. You’ll receive a message from the buyer  saying that they’ve already sent you the money through Paypal, and to ship them your car.


Upon checking your email, you will see an email that looks like its from paypal. It will say that the buyer has deposited money into your Paypal account.


Don’t be fooled. This is a fake email, and you can tell by the sender address, which will not be from @paypal.com.


If you say that you don’t see the money in your paypal account, they will make up an excuse, and say that the payment is pending, and will be completed once they received confirmation of your shipping tracking number.


This excuse sounds like it might be plausible, but it’s completely false- and not how Paypal works.


The only way to know if you’ve received money is to verify that it’s in your Paypal account. No exceptions. Ever.


  • Fake Escrow Service Scam


Escrow services make sure that both parties hold up their end of the deal. If the car buyer does not pay, they don't get the title.  If the seller doesn't deliver the vehicle and title, they don't get paid.

Escrow services are very useful for mediating online transactions, but only if they are legitimate. A common scam is for the buyer to direct you to a website ( their own) where you will fill out fake paperwork, “close the deal”,  and soon be out shipping fees- or a car, depending on what the scammer is trying to get from you.

If you use an escrow service, conduct research on it beforehand and make sure it has plenty of positive reviews from objective third party review sites.


4. Fill out a Bill of Sale and Release of Liability form


  • Bill of Sale


When selling your car, you should always fill out a Bill of Sale. The purpose of it is to document the transfer of the title from the old owner to the new, and also serve as evidence of a contract. You can download a Bill of Sale  template created by the DMV here


  • Release of Liability Form


This will ensure that any of the tickets or violations created by the new owner will be solely their responsibility, and not yours. Here’s an example of the form from Illinois. If you are selling your car in a different state, just google “Release of Liability form” + your state and you should be able to find it easily.


Recap


While there’s lot of way to get scammed online, if you follow the steps in this guide, you’ll have nothing to worry about.


If you want to make things even easier, sell your car online through Swap Motors. We pre- verify all our buyers so that you only deal with trustworthy people.


Plus, We'll send a certified mechanic to evaluate your vehicle, take pictures and videos, and create a listing in our marketplace- all for FREE.


Swap connects you with thousands of potential verified private buyers, and charges ZERO fees for selling your car.  


Sound amazing? It is.  


But hey, why don't you just see for yourself? List your car on Swap Motors and schedule your free vehicle evaluation today!