5/21/2012 11:59 AM ET|
5 red flags of used-car scams
Lots of legitimate good deals are available from private sellers, but there are also plenty of bad guys looking to rip you off. Be smart about which ads to pursue.
The big advantage to buying a used car from a private party, rather than a dealer, is you'll most likely save money on your purchase. The disadvantage is you could lose $1,000 or more in a car-buying scam.
While most used-car sales conducted by individuals are perfectly legitimate, there are used car-buying scams out there, and they are on the rise -- even for so-called local sales. This is because so much of the business has an online component. In fact, consumer complaints for car sales scams increased 25% last year, according to the Internet Crime Complaint Center, a U.S. government agency.
Here are five tips to avoid a used car-buying scam if you are shopping for a used car locally and considering a private-party sale:
1. Prices that seem too good to be true
Research a car on one of the many vehicle-pricing sites, such as Edmunds.com, Kelley Blue Book or NADAGuides.com, to determine the private-party price for that car. If you are seeing an ad for substantially less than the typical private-party value, it's probably a scam, no matter what sob story you are told.
2. Sales in which the seller and the car are not in the same place
A common story is that of a member of the military stationed elsewhere or someone who recently relocated who needs to sell his or her car. While this can be legitimate, most people who relocate make decisions about selling their vehicles beforehand. After all, there is plenty of hassle involved. A car is expensive, so you want to be able to inspect the used car in person and meet the seller before any money changes hands, or you want purchase through a reputable third party, such as eBay Motors, that has a buyer-protection plan in place.
3. Sellers who offer you third-party protection plans
One way scammers bilk unsuspecting buyers is by offering them a protection plan through a well-known third party. Many of the companies cited don't even offer buyer-protection plans, and those that do offer them only for cars sold through their websites. Companies that offer them do so only for cars sold through their websites. Some scammers are so savvy they've set up online chat functions to reassure the buyers the protection plan is secure, but this is simply an elaborate ruse. If a seller offers you a protection plan and the used car is not being sold through the company mentioned, then it is a used car-buying scam.
4. Sellers who switch gears in the middle of negotiations
If you face a changing story, a sudden shift in the terms of the sale or a request to move the transaction from one website to another, beware. These are common scammer tactics, but they're rare among legitimate sellers.
5. Sellers who ask for money upfront or want to use a wire-transfer service
Buying a used car locally is just like buying any other product. The money should change hands when the buyer can leave with the product. The only instance in which a buyer should make any payments in advance of purchase is when the transaction started and ended via a well-known third-party service that uses an escrow system for transactions. Sellers who request money in advance or those who want to use a wire-transfer service are likely running a scam.
Car buyers who believe they've witnessed a scam, whether or not they've fallen victim, should report it to their local authorities. If the scam involved anything Internet-based, the Internet Crime Complaint Center should also be contacted.
More from Bankrate.com:
VIDEO ON MSN MONEY
If you supect a scam!
1) post it a.s.a.p on the General & the Local News Community section of Craig's list-by posting locally others can read what is happening in your area. I know our local paper needs a SECTION devoted to local scams.
2) always use COMMON SENSE and get a Car Fax before the purchase and look @ the wear on the brake pedal it is an indicator to the true mileage on the car and even how the car was cared for.
3) If you are not qualified to check the car over, please get someone who is to give run Diagonistic test or report so you will know what you are getting. This costs in most cases is well worth it.
I have been on this planet for over 70 years and I, plus my immediate family and adult children, have bought many new and used cars. Some of us are quite car savvy but we all agree that without a doubt most new and used car sales people are scum. Yes, there are a few honest jewels out there but they are far and few between. Sad.
If anyone is looking to buy a car by dubuque,ia theres alittle car lot on the wisconsin side of the river, Freds used cars, i dont work for them but i have purchased alot of cars over the years, good honest guys they do not do pay here buy here, and they wont finance
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'