Nowadays, fraud and scams have become more aggressive in all industries, and the car industry is not an exception. Buying or selling a car is a complicated process during which you will face many obstacles. This article will prepare you for all pitfalls and give you tips on how to recognize fraud and protect yourself from becoming a victim of a scammer. This information will be useful for both the seller and the buyer.
Red Flags when selling a car:
When you sell your car by yourself and do not ask for help from the dealership, then watch out for these red flags:
Fraudulent ACH transfers: An ACH (is an electronic fund transfer made between banks and credit unions across what is called the Automated Clearing House network). A fraudster may ask you about your credentials. He/she may say that they need this information to send money to your bank account. Then they will say that they have sent you money, and you will get it within a few days. However, after a few days, the transfer will appear as unauthorized. Thus, you will not receive the money for the car and lose the car as well.
Fake mobile deposits: A scammer may ask to use your mobile banking app to deposit money. However, instead of sending money to your account, the scammer will try to send money from your account to theirs.
Loan: Some buyers may try to ask you to pay monthly for your car or wait until they get their next paycheck to cover the rest of the amount. Do not trust them because, most likely, they will disappear with your car, and you will never see the money for the car.
Overpayment: The buyer will put a bigger amount on the cashier’s check or money order. Then, they will tell you that they made a mistake and ask you for a refund. However, the truth is that the original cashier’s check or money order was never legitimate. Thus, any money that you send to them as a refund, you will lose.
Tips on how to avoid a scam when selling a car:
It is better to be aware of all pitfalls and scams to protect yourself. Here you will learn some tips on how to safely sell a car without involving yourself in scamming or fraud.
Always meet with the buyer in person. Do not sell the car online without knowing if you communicate with a real person. It is better to meet in a public location during the day. We recommend you choose a location where there will be security cameras and people. Also, you can always meet near the police station to protect yourself. It is a good idea to bring a friend to the meeting as well.
Always check the legitimacy of the payment and avoid online transfers. The best way to prevent yourself from being a victim of a scammer is not to accept the online transfer and ask the buyer about cash or a cashier’s check. Always double-check the information on a check and the amount of payment. If you decided to accept the online transfer then wait for when the buyer will do the transaction and for the confirmation email as well, then you can give him/her keys.
Avoid online shipping. It is better to sell your car in your region and be sure that you sell your car to a real person.
Ask a potential buyer his/her first and last name, phone number, driver’s license number, and insurance information before letting the buyer test drive. Decide if you want to go on a test drive with the buyer or not. If you do not feel comfortable going, ask the buyer to leave his/her keys with you during the test drive. It is better to agree on the lengths and the road for a test drive before it starts.
Red flags when buying a car:
We recommend you buy the car from a legitimate dealership. If you are from Indiana, you can always come to the Indy Auto Man dealership to purchase your vehicle. We have more than 300 cars in our inventory, and we are confident that one is waiting for you.
If you decide to buy your car from a private party, then watch out for these signs:
The price of the car is significantly below the market value. Often, the scammers will post pictures of the car at a relatively lower price compared to the market value. When you ask them about the car, they will tell you that it is located in another state. They will ask you to pay for the car and tell you that they will deliver the car right to your door. However, if you send them money, they will just disappear, and you will never see the car for which you already paid.
Fake inspection. The seller may convince you that the car is perfectly fine and does not have any mechanical issues. The scammer may even show you proof of the document. However, this will be a fake document and he/she will sell you a non-functional car or car that has mechanical problems.
Tips on avoiding scams and fraud when buying a car:
It is important to be aware of the scams and frauds on the market and know how to protect yourself when buying a car. Here are the main rules to follow to protect yourself from fraud:
Always inspect the car before buying it. Most of the sellers will agree if you ask them to take the car to your mechanic. If the seller does not agree to do so, then avoid having to deal with this person. Most likely, he/she is hiding something about the car.
Ask the seller about the test drive. A legitimate seller will always allow you to drive a car before purchasing it.
Ask the seller about the CARFAX report or buy it yourself. Read the CARFAX report carefully and ask the seller questions if you need a confirmation or explanation of some information. If you need help with understanding the CARFAX report, we have an article for you on how to read the CARFAX report and on what details you should pay close attention to.
Always check the title information and car history to prevent yourself from buying a stolen car. Verify that the owner’s driver’s license matches the information on the car’s title, then visit the local DMV to check for liens.
Be safe when buying or selling a car. We recommend you use legitimate dealership services to protect yourself from fraud and scams. If you are from Indianapolis, come to Indy Auto Man to buy or sell a car. We have over 300 cars in our inventory and provide a 30-Day price match guarantee and 7-Day exchange guarantee to all our customers.