Let me help you to become an Educated Internet Car Buyer..
If you found this article on the net chances are you are looking for advice how to buy a used vehicle on the Internet without getting ripped off.
There are indeed some real good deals on the Internet. Unfortunately that good deal is usually several states away. And like it usually is.. if that price seems really cheap chances are there is a good reason for it.
Internet car sales got it’s start back in eBay’s early days long before eBay Motors was built. Back then mostly computer geeks and hobbyists, and other middle to high income adults had computers and were fairly Internet savvy.
Back in the mid 90′s AOL was a BBS (Bulletin Board System) that offered Internet Access. And slowly more and more people were finding a use for those AOL Disks that were mass mailed to everyone, (other than re-formatting and using for other things). eBay was just getting started and was all about Trust and Community back then. 99% of the the sellers were honest and contributed to the principles that the site was founded on. If a bad seller got into the circle of trust eBay booted them real fast! You could buy a car several states away or in another country and be assured the vehicle was what it was represented to be. Internet car sales was born and it was great!
Lets go fast forward about 10+ years to today. Trust is nothing but a five letter word with little meaning. A smart buyer will do a lot of homework researching a vehicle he/she is interested in purchasing. It’s strongly recommended to inspect a vehicle in person or have it inspected by a 3rd party inspection service. The moral is – Trust Nobody!
Even eBay urges there buyers to have a vehicle inspected. The odds are if a vehicle is priced really cheap there is something wrong with it. Older northern vehicles with undisclosed Frame Rust. Flood damaged vehicles, Accident damaged vehicles with undisclosed Salvage Titles, just to name a few. Not counting curbstoners (unlicensed dealers) pushing cars with Open Titles that might not be able to be transferred into the latest buyers name.
Buying a car from a private seller. Beware of private sellers that buy and sell vehicles with out being licensed. Flipping cars from one owner to another. In other words a curbstoner. The curbstoner buys a car from a little old lady in a newspaper. Instead of going to his local DMV and transferring that title into his name, he resells the car to Buyer B who prints his name in on the back of the title, but does not go to the DVM and pay the taxes and transfer it into his name. Instead he might have made a few repairs and clean it up, then decides to sell it. So buyer B becomes seller B and sells the car to Buyer C who is in another state. Seller B crosses his name out on the back of the title and writes Buyer C’s name in above his name that he
just crossed out. Seller B then hands the title to Buyer C who takes it to his tag office to pay the Taxes and purchase a license plate. The title clerk takes one look at that crossed out name and rejects the title for transfer.
Now here is where the mess starts. Buyer C’s DMV tells him/her to contact the person who’s name is printed on the front of the title. Buyer A would be required to transfer this title into his/her name, pay any taxes due, yada, yada, yada, then sign the new title they receive over to Buyer B who would repeat this process and sign the title over to Buyer C. Only problem is.. the little old lady that sold the car has no idea who she sold the car to. Buyer A just paid her cash and had her sign off as the seller. By law this car is Legally Still Titled in Her Name. If it is used in a crime or involved in an accident, the police will be coming to her! It’s a real paperwork nightmare! Often it’s easier to get the registered owner to file for a duplicate title, and then sign it over to the person trying to title it in their name. Though a DMV official will not tell anyone this because it’s considered illegal. Any way you look at it, it’s an absolute nightmare getting a transferable title!
To avoid a situation like this. I advise anyone that’s buying a car long distance on the Internet from a private seller to request the seller either fax, or scan and email attach both sides of the title, along with a copy of their drivers license to prove it’s their car to sell. If the car the individual is selling is not titled in his/her name, it’s not their car to sell period! If both the buyer and seller are in the same state or town, insist on going with the seller to the DMV to do the transfer. And do not hand over the cash until the DMV says the title is OK to transfer.
Curbstoning got so bad on eBay Motors that their VPP (Vehicle Purchase Protection) program excludes buying a car and receiving a title, but not being able to transfer it. If you end up like this you will be stuck like Chuck, and the only solution would be to sue the seller. Lawyers are not cheap, and even if you manage to get a judgment it may be impossible to collect it. And attorneys fees could exceed the value of that Bargain Priced Car! So Just Beware!
Old Collector Cars are common for having open titles. Lots of these cars are either not running, or was a project someone started to restore but never completed, or for parts. Others are restored but never titled in the owners name either because the owner bought the car as an investment and didn’t want to pay the taxes and registration fees, or otherwise don’t drive it. It’s not uncommon to see a collector car go through a half dozen owners without a title transfer. The problem with this is, if that title is lost it can be a nightmare getting a duplicate issued.
Buying a car from a licensed dealer. While a dealer most likely will want more for a car than a private seller, it’s a safe bet that the title will be proper and should be no problem to transfer. Dealers are licensed and also bonded in most states. But it’s still advisable to verify the dealer has a physical location. If so it’s a safe bet that you will not drive up to an abandoned building or vacant lot somewhere after sending payment for a car. It’s also very common to have wholesalers working off of a dealers license. The wholesaler usually pays a draft fee to use the dealers funding and to gain auction access to source their cars. Lots of dealer cars are offered by wholesalers on the Internet. The wholesaler can issue temporary tags and deliver a car as a dealers agent. Plus the dealer is ultimately responsible for his agent’s actions, so this kind of seller is a safe bet to deal with on a long distance transaction.
Independent Dealers buy most of their cars at Dealer Auctions. These days the greatest majority of Franchised Dealers send all their trades to auction. This accomplishes two things. It keeps their used car managers from taking Grease (money under the table) and selling trades to their friends at a reduced price. It also ensures the dealership will get top dollar for a nice trade in unit. Vehicles are also sold as repossessions by banks and finance companies. Wholesalers selling made up cars. And non franchised dealers swapping the units they can’t sell among each other.
The older cars are mostly sold on the “red light” AS-IS with No Warranty! The dealers sell them the same way they buy them, AS-IS! When the gavel falls and that auctioneer hollers SOLD someone is the proud owner of that unit with any and all faults it may have. If it don’t have a reverse that’s too bad. There is no crying to the office about it. Lots of these kind of vehicles end up for sale on the Internet! This is where an Inspection can be worth it’s weight in gold!
Becoming a new dealer is an experience some may want to forget all about. There is nothing like the experience a newbie dealer will gain by going to the “Unofficial Car Dealer School – The Dealer Auction”. Here they will learn all about bidding against the Coke Machine. (been-there done-that) LOL! Some newbie dealer may be the only one bidding on a car, with the selling dealer tapping the auctioneer with his knee “bump him again” If the auctioneer taps back it’s a signal that the next bump would probably loose the fish. And to think individuals complain about Internet Auction Shilling. It’s an accepted practice at Dealer Auctions!
Newbie dealers also learn the hard way about buying a set up car from a wholesaler. They usually pay every nickel for a set up unit. Next day the air is hot, a week later that nice shiny finish fades away to reveal the painted panels and other things that were not noticed when the car ran through the auction. It sits around for a couple of months and does not sell. The dealer takes it back to the auction to try and dump it, but unfortunately the regular sellers get the good early run numbers, and newbie dealer ends up running at the end of the sale when most everyone has went home. The only way to get rid of a turd like this is to put it on the Internet and hope someone from another state buys it sight unseen without an inspection!
Buying a late model car, truck, van, etc. Lots of late model cars have an advertised “Factory Warranty” Or the balance of a factory warranty remaining. But it is advisable to check to be sure it’s correct yourself. Don’t just assume the seller is telling the truth, get the vehicles VIN (ID Number) and call your local dealer and inquire what warranty is remaining on that vehicle. Lots of situations can void a factory warranty. Accidents, Modifications, Abuse, Commercial Usage, Etc. Remember it’s your obligation to verify every detail about a vehicle you are interested in purchasing.
Once again Trust Nobody! Can you imagine being stuck making payments for 36 months or even longer on some falsely advertised late model vehicle? Didn’t think so! The more money you are investing, the greater chance is of getting taken by some sleazy seller in another state or country.
Vehicle History Reports. These can be worth their weight in gold if you find out that car you are planning on buying has Major Accident or Salvage History, Flood Damage, Odometer Discrepancy, Etc. CarFax is without a doubt the leading authority in vehicle history reports. The other major player Experian Auto Check is given away for free by eBay Motors on qualifying listings. Be advised that vehicle history reports are only available for 1981 and newer Passenger Vehicles with the standard 17 Character VIN Number. CarFax often includes major service history on vehicles that Auto Check does not. So if your looking at a car on eBay Motors and have serious thoughts about buying it, do yourself a favor spend the $$ and purchase a CarFax report on it! Remember these history reports are only displaying the data their companies purchase! They should only be considered as a GUIDE to a vehicles history!
I recently read a discussion on eBay’s Motors Discussion Board where a buyer had won an auction for a late model Mazda Rx8. eBay’s Auto Check didn’t show any discrepancies and even CarFax was clean. But the NICB Database showed a total loss in 01/2008! Further investigation revealed that the cars owner was paid an insurance settlement, so it never was reported to the history companies.
The private seller was untruthful and the buyer walked away. Once again it was a “Bargain Buggy” that turned out to not be not such a bargain after all. This buyer was SMART and did his homework before paying for the car!
The old saying is often true, you get what you pay for. Lets face it, if you are looking into buying at a car in another state, chances are it’s the price that got your attention. Especially on auctions where the bidding is at 1/2 of book value or less.
If your buying an older car. My example of older means the car is usually 8-10 years old or older, and with an odometer reading well over 100k miles. Don’t expect a perfect showroom condition car regardless what the advertisement claims. An old car can run perfect today and puke a transmission the next day. It’s just the nature of the beast!
While technology has improved the modern automobile, all this high tech stuff is real expensive to fix when the vehicle gets old. An engine or a transmission can easily exceed the value of a older vehicle. Some sellers advertise vehicles as being perfect, but are blatant lies. The seller hopes someone far away will buy the car and have it shipped home! Don’t fall for a car that has been “set up for photos” that might look good but has hidden mechanical problems or undisclosed undercarriage rust or other damages. Also beware that certain cars when they get old have their own faults and failures. For instance older Cadillac’s with the early Northstar V8 are prone to head gasket failures which having to fix can exceed the value of the car. It’s the buyers responsibility to either check the vehicle out in person, or if that’s not possible have a 3rd Party Inspector give it a thorough inspection. There are a bunch of Mobile Inspection Services that for a fee will go inspect a car you are planning on buying. If you buy a car sight unseen and it’s not as described you will be stuck like Chuck!
Odometer Tampering IS Fraud. This is another thing anyone that’s buying a car should be aware of. The LAW says that a vehicles odometer will not be tampered with. It’s real clear on the subject of rolling back an odometer, replacing an odometer with another showing lower mileage. If a vehicles odometer has been replaced or repaired it must be disclosed when the vehicle is sold. Franchised dealerships repair techs that replace an odometer put a notification sticker in a cars door jamb showing the date and mileage (if known) that an odometer was replaced at. New odometers from the dealer usually start off at 0 mileage.
Shady used car dealers and scamming private individuals will alter (roll back) an analog odometer to deceive a buyer. Often a CarFax Report will show a vehicles mileage history, but it has been my experience eBay’s Experian Auto Check at times will not. It’s a good investment to purchase a CarFax Report on any vehicle 1981 or newer to check the mileage readings. Also state DMV records, inspection stations, etc, record a vehicles mileage in the state database. If you suspect a vehicle you have bought may not be displaying the proper mileage check with the state DMV to see what their recorded mileage is on that vehicle. That information should be public record, but you might have to pay them to get a printout. A vehicle may have been into a franchised dealer for warranty service. Calling any franchised dealer and giving the service manager the last 8 of the vin could reveal any odometer discrepancies. It’s also advisable to do a visual inspection. Check for wear on the brake pedal, steering wheel, how easily the drivers door opens and closes, any visible signs that the mileage might be higher than the vehicle odometer is showing. There is also software on the market that will alter a digital odometers mileage reading. So if the odometer is a digital one, don’t rely on it being accurate. Do your homework and investigate for possible odometer fraud. It’s better to find out before purchasing a car that has been clocked than after!
Odometer Exempt Vehicles. Any vehicle that is 10 years old or older is considered Exempt on Odometer Recording by Federal Law. Most dealer auctions will sell these age vehicles as “Odometer Exempt”. Chances are if a title transfer was done on an older car it will probably say Exempt on the title where the mileage would normally appear. Once a vehicle has been exempted it will stay that way. An older vehicle may still be registered as “Actual Miles” in most states as long as it’s supporting title and odometer reading/statement reflect this actual miles.
Old 5 Digit Odometers. I see so many older cars with 5 digit analog odometers where a seller is advertising the car as having the actual or correct mileage. This is mostly observed on old collector cars from the 50′s 60′s 70′s. The clock (odometer) has probably rolled over at least twice. There is no history reports on any car older than 1981 when the current 17 character vin became standard. So the best and probably only way to document the mileage on one of these cars is with service receipts, an old log book that reflects dates and mileage reading of service work, oil changes etc. A log book would have to look old to convince me it is legit. It’s too easy to use a computer to document dates and mileage and then print it out. No Thanks.. I’ll pass on that! If you buy an older car and the title states “Actual Mileage” be sure to get the seller to sign an odometer statement that the mileage IS ACTUAL and when registering the vehicle be sure to request the DMV record the mileage as actual. You have to Request This as they will record it as Exempt if you don’t request it! This is real important to keep the market value up on an older car with actual miles. Transferring the title as Except will kill the cars market value!
Vehicle Sales Taxes and Out Of State Car Sales. Most states are reciprocal as far as collecting their taxes goes. It’s best to check with the dealer you are buying from about any tax liability. It is also recommended to call your states DMV to find out if any taxes are due when you register the vehicle. Every state is different. Also be advised not all dealers follow the law and collect the proper taxes. If the dealer does not collect tax, you can usually pay it at your DMV when transferring the title. Be prepared to produce a Bill Of Sale to prove what you paid for the vehicle.
Making Safe Payment. If you have done your homework and are ready to purchase your internet car, use a safe payment method. 1st off NEVER Use Western Union or any other Cash Transfer Service. Beware of Fake Escrow Services that will steal your money! Western Union is the Scammers Choice for receiving payments because a payment can be picked up in any country, all the scammer needs is the MTU number!
My payment choice if i was doing an internet vehicle transaction would be to send it by a bank wire transfer. If buying from a Licensed Dealer the dealer could provide you with the company’s bank wire transfer instructions via email or by fax. This is good if you will be getting the vehicle shipped home and want to be sure the dealer receives your payment. Another option is to pay by a Cashiers Check and mail it using USPS Priority or Express Mail with Signature Conformation. This is important so you know they signed for it.
When i was selling cars on the Internet i would send the title and paperwork this way to be sure it didn’t get lost in the mail. If a cashiers check is lost in the mail, the issuing bank most likely would require you to put up a bond before replacing it. Don’t take the risk of getting stuck like Chuck because you were too cheap to properly mail the check!!
If you are picking the vehicle up in person, paying cash on delivery is OK too. I would be sure the seller had the title and would be handing it over to you on delivery. Be sure to have followed my advise earlier in this article and did your title/ownership homework. Along with any vehicle inspection etc. Nothing worse than flying a long way from home with a ONE WAY TICKET and find out the vehicle was a POS because you didn’t have it inspected first! Be a SMART EDUCATED BUYER!
Beware Of Internet Vehicle Fraud! This kind of vehicle fraud has been happening since around 2004. I would think the word had gotten around about it by now, but apparently not.
The Internet IS INFESTED with Scammers who offer a vehicle for sale at a dirt cheap price. Lots of times these fraudulent advertisements will be found on Craigslist, eBay Motors, Autotrader.com, and other publications and venues.
Those ads are sucker bait! And are intended to lure a prospective buyer to email the scammer, who is most likely in Europe somewhere operating out of an Internet Cafe.
The scammers will offer to do the transaction through eBay Buyer Protection where a 3rd party holds the money until the vehicle is received and approved by the buyer. The documents the seller will send look like they came from eBay, but are a fraud! eBay does not guarantee Craigslist or any other venues transactions.
It has also been reported that fraudsters are now using Amazon and Google as 3rd parties ion their scam car deals, so just be very aware of it.
And eBay’s buyer protection has so many loop holes it hardly offers any protection for legitimate eBay Motors transactions. If you fall for one of these vpp or other protection scams your money will be long gone!
The first thing I always advise my clients is to be careful if the price seems too low. Scammers target suckers using a dirt cheap price. If a vehicle is priced at 1/10th of it’s actual value, you have to ask why it’s so cheap? What is wrong with it? Is it a fraud?
The next thing you need to know is – the US Army does not transport soldiers vehicles back from Afghanistan or any where else! The fact is they do not transport any vehicles other than their own Military Vehicles. So if you get an email from someone claiming to be Major Andrew Q Leckner or any other person claiming to be in the USA Armed Forces, after inquiring about some “Bargain Buggy” on Craigslist, eBay Motors, Autotrader.com, or any other publication.. RUN away as fast as you can.. It’s A SCAM!!
Just remember – there is NO FREE LUNCH, someone somewhere is always paying for it. And there is no BARGAIN CAR coming to you with FREE SHIPPING! Also be aware of MONEY MULES that get suckered into taking payment for a VEHICLE as a SELLERS AGENT.
The scammer contacts people searching for jobs online and uses them as an agent. The scammer has his mark wire the money to the agent who takes 10-20% as their commission, then wires the balance on to someone else. Scammers will “RINSE” these payments several times in an attempt to hide their tracks. If you fall for this one your money will be gone in a flash! So if someone contacts you about working for them as an agent collecting payments RUN! You will wind up in Jail!
Also of major importance. If you have emailed a scammer, there is a good chance they could have slipped a key logger or some other virus onto your computer. Be sure to do a full virus scan of your machine. Then go online and change any banking or other online accounts passwords. These scammers are pros at doing what they do best, steal suckers money! If you need a good free antivirus program try Avast FREE!
Just do your homework as I have mentioned above and you should be OK. But if you have any questions or need help with a transaction, please leave a comment below. I will do my best to advise you what to do.