Selling Your Car? This Is How You Can Avoid Getting Scammed

We may think only buyers of new or used cars get cheated however, sellers of used cars too can fall victim to scammers.

Here is a guide (compiled mainly from DMV.org) on the common scams and how a car seller can avoid getting cheated.

Common scams you should be aware of when selling your car include:

• Offers to buy sight-unseen.
  • A buyer offering to buy your car without looking at it first should be considered a warning sign.
  • Often, this is part of a larger scam. The buyer will send a bad check or promise to wire money and have a different person pick up the vehicle.
• Paying with checks or money orders.
  • While it isn’t always the case, a common scam is to pay the seller with a check or money order that’s fake. If you sign the title over before the money clears, the car isn’t yours anymore, and you’re left having basically given the car away for free.
• Overpayment.
  • In this case, a buyer will tell you that someone else owes him or her money that is more than the cost of your car. He or she will ask for the car and promise payment from the other individual.
  • Another overpayment scam involves the promise to wire additional funds or send a larger check to pay for the cost to ship. The buyer will send a fraudulent check and ask you to deposit it. If you ship the vehicle before it clears, you’re in for a headache—locating and retrieving a vehicle that has already been shipped is both costly and time consuming, especially if it’s out of the country.
• Payment plans.
  • A promise to make monthly payments is usually not a good way to go. Since you aren’t a finance company and have no way to collect if a buyer misses or stops payments, it’s best to avoid these offers.
• Escrow services.
  • In this situation, the buyer will use an unknown escrow service to complete the transaction. It will seem secure, but once you’ve given them the signed title, the money will no longer be available.
    • An escrow service is a third party that is used in high-value purchases to maintain accountability during the transaction. An illegitimate escrow can be used as a scam tactic.
• Asking for personal information.
  • Some buyers may promise to wire money to obtain personal information, such as:
    • Social Security numbers.
    • Bank account information.
    • Credit card numbers.
  • This may be an attempt at identity theft.

To safeguard yourself and your car, practice the following:

• Verify checks before you transfer the title.
  • To be safe, verify checks with the issuing bank instead of waiting for the check to clear with your bank. If possible, complete the transaction at the buyer’s bank to be sure the funds are available.
• Don’t ship cars overseas until all payments clear.
• Be wary of unknown escrow services.
  • A third-party escrow can be a good way to make a safe, secure transaction—just remember that you’ll want to use a reputable lawyer or bank.
    • Don’t agree to use an escrow as part of the transaction until you’ve researched the escrow service first.
• Document everything.
  • Make sure you keep a copy of anything that’s signed.
  • Document the entire process and keep records of phone numbers, names, and other information.
    • This will help if an investigation is required down the road.
• Screen callers.
  • This will help you to only accept test drives from potential buyers that are legitimate.
  • If you think it’s a scam, it’s best to end the conversation sooner rather than later.
• Ask for identification.
  • If you do let someone test drive the car, ask for their driver’s license and identity card first. This will let you know exactly who you’re dealing with.
• Meet in a public place.
  • For safety, it may be a good idea to not conduct the transaction at your residence.
• Don’t sign over the title without the cash in hand.
  • Most scams occur from fraudulent checks, money orders, or money wiring.
  • Never give a buyer the vehicle or the title until payment has cleared.
  • Never trust a buyer who says that the transaction is guaranteed by the online marketplace e.g. autoworld.com.my. Websites DO NOT guarantee any sale or purchase unless it is explicitly stated in the said website.
• Don’t accept monthly payments.
  • You’ll have no way to collect if a buyer fails to make scheduled payments or stops them all together.
• Complete transfer forms.
  • This will protect you from future tickets, violations, or other problems incurred by the new owner.
• Block out personal information.
  • If you give a buyer service records, you’ll want to block personal information such as:
    • Credit card numbers.
    • Phone numbers.
    • Other information that could lead to identity theft.
• Use your best judgment.
  • In most cases, if you think it’s a scam, it probably is. If it’s too good to be true, then it’s probably not true.
  • Instead of jumping at the first offer, it’s best to be patient and wait for the right buyer to come along.

Keyword: Selling Your Car? This Is How You Can Avoid Getting Scammed