Signs of Online Car-Buying Scams and How to Avoid Them

Shot of a well-dressed man holding the keys to his new car

Visiting a car dealer before buying a used car is no longer the only option for consumers. Shoppers can now use the Internet to find the best deals. However, if you’re purchasing an auto online, two axioms should serve as cautionary advice — “Buyer beware,” and “If something seems too good to be true, then it probably is.”

Here are some situations that should raise red flags:

Seller won’t let you see the car in person

Be firm that you need to see the auto in person. Bring a friend when meeting with a private seller. Do it in a secure, well–lit, surveilled, and highly trafficked public area. Some police stations offer their facilities as a place to safely conduct these types of transactions. Find a reputable mechanic and insist the seller allows an inspection before considering the purchase.

Vehicle is out–of–state

If you can’t travel to see the car, be wary before purchasing it from a private seller. Scammers may create fake dealership websites to look legitimate and they can post fake photos and safety reports for a vehicle they don’t own. This is common for exotic car scams when prices fall below market value.

If you’re still considering a vehicle in a state too distant to reasonably travel, find a reputable mechanic from that area who can inspect the car on your behalf.

Suspicious VIN or title information

Find out in which state the car is registered and then use the Vehicle Information Number (VIN) to look up the car’s history on that state’s Department of Motor Vehicles website. This simple step will indicate whether the vehicle has been reported lost or stolen, salvaged, or declared a total loss following an accident. Also, the U.S. Department of Justice’s National Motor Vehicle Title Information System will show if the VIN doesn’t match the auto’s make and model.

The vehicle is priced below market value

Use sites such as Edmunds or Kelley Blue Book to get an approximate value of the auto you’re interested in purchasing. If the asking price is significantly below what is listed on those sites, it should raise questions.

Seller requests wire transfer

It can be difficult to stop a wire transfer, and using one may make it challenging to recover your money if you’re scammed. Don’t agree to pay until the car is delivered to you.

There’s a rush to sell

Sellers may pressure you to buy the vehicle by stating that the low price is only available for a limited time. These tactics prevent you from doing your due diligence, quickly separate you from your money, and allow the scammer to move on to the next victim.

If you become an auto online scam victim, be sure to take these steps:

Contact your financial institution to report a fraudulent charge if you used a credit card, debit card, or wire transfer through them and ask to have the transaction reversed
If you used a wire transfer company, ask it to reverse the transaction
Report it to your state attorney general's office, the Federal Trade Commission, and your local Better Business Bureau
File a complaint with the FBI's Internet Crime Complaint Center and the National Consumer League's fraud center
Consider changing any usernames or passwords if you shared personal information with a scammer
Monitor your credit reports for any suspicious activity

Resources
Colleen Tressler, “Tag: Car Buying Scams,” https://consumer.ftc.gov/all-scams/car-buying-scams, (October 19, 2018)
John Egan, “Online Car–Buying Scams to Watch Out For,” https://www.ussfcu.org/media-center/security-corner/blog-detail-security-corner.html?cId=47939&title=online-car-buying-scams-to-watch-out-for, (August 17, 2021)
Hearst Autos Research, “Buying a Car Out–of–State: Everything You Need to Know,” https://www.caranddriver.com/research/a32758521/buying-a-car-out-of-state, (Published June 11, 2020)
Philip Reed, “How to Avoid Scams and Stay Safe When Selling Your Car Online,” https://www.nerdwallet.com/article/loans/auto-loans/how-to-safely-sell-your-car, (Sept. 1, 2022)
Clark.com Staff, “3 Ways to Get a Free VIN Check Before Buying a Used Car,” https://clark.com/cars/free-vin-report, (Jan. 4, 2023)
“What To Do if You Were Scammed,” https://consumer.ftc.gov/articles/what-do-if-you-were-scammed (July 2022)