Most Common Car Escrow Scams

If you’re going to use an escrow service to buy or sell your private-party vehicle, make sure to use a legitimate one. Car escrow scams fleece unsuspecting buyers and sellers, and leave them in the lurch.
It’s great to avoid escrow scams—but did you know you can avoid escrow altogether?

PrivateAuto's instantaneous and secure payments give you escrow-like safeguards in the palm of your hand.

With user verification, instant payments via PrivateAuto Pay, and electronic document signing, PrivateAuto gives you the power to buy a used car on your own terms and avoid frandsters.

What is Escrow?

Escrow services help solve the problem of trust between strangers. They hold a buyer's payment until the buyer receives the car and is satisfied with the purchase. Then they release the money to the seller.

Buyers don’t need to trust the seller to follow through; the seller is motivated to follow through to get their money.

Sellers, in turn, don’t need to trust that the buyer has funds. The escrow service verifies that it is holding the buyer’s funds.

Traditional escrow served an important purpose for high-dollar transactions. It’s also inconvenient, cumbersome, and expensive.

We’re glad we’ve created a better way to do high-dollar vehicle transactions in a secure way that protects both buyer and seller.

What are the Most Common Types of Vehicle Escrow Scams?

Fraudsters exploit the perceived protections of escrow to con unsuspecting car buyers. The scams rely on the legitimacy of escrow companies to trick victims into sending money.

A fraudulent seller convinces a buyer to send money to an fake escrow service. Scammers create convincing fake escrow websites with logos and branding copied from real escrow companies. These can appear authentic.

The fraudsters then reach out to private car sellers as potential buyers and claim they will handle the transaction through their escrow service. Unaware that it is a sham site, the trusting seller follows the "escrow" instructions and submits their payment to the fake company. But in reality, they have just paid the scammer directly, and the money is stolen.

The Best Car Escrow Service…Isn’t Really an Escrow Service

If you’re looking for the best car escrow service, you may not have heard of PrivateAuto Pay.

We’re not a true escrow service—we’re something way better. PrivateAuto Pay provides escrow-like safeguards for private-party used vehicle transactions. It’s instant, it’s highly secure, it works 24/7/365, and it has no transaction fees.

What is PrivateAuto Pay?

PrivateAuto Pay is our integrated banking gateway. It’s the only safe, instantaneous, convenient, and contactless payment option for a used car transaction over $5,000.

When it comes to buying and paying for a car, the benefits of PrivateAuto Pay include.

Your PrivateAuto Pay account is actually a bank account that you own, on the PrivateAuto app.
Easily move money between your PrivateAuto Pay and your external bank account via a balance transfer.
Send or receive up to $1 million instantly from your PrivateAuto Pay account to the seller’s.
No exchange of contact information or banking info.
Contactless payment reduces disease risk.
Encrypted info protects your data from hackers.
Peace of mind knowing you can pay or get payed immediately with no coordination needed.
Conclude the entire transaction when you meet the at the test drive.
Buy a car remotely and forgo costly and inconvenient escrow services.

No cost, no hassle, and no wasted time. It’s the ultimate way to handle escrow in a car sale.
Image highlighting DealNow by PrivateAuto

What is DealNow?

DealNow is our fast-track solution to getting a car transaction done with the power of PrivateAuto Pay.

If you’ve found your dream car outside of PrivateAuto—or if you’re selling your car on another platform—you can enjoy the power and convenience of our transactional infrastructure to get the deal done. DealNow allows you to skip the initial shopping and negotiation processes and go straight to the transaction.

Whether you found a car on Facebook Marketplace, Craigslist, Autotrader, or Bring a Trailer, you can invite the seller (or, if you’re the one selling, you can invite the buyer) to DealNow with a custom link.

DealNow uses PrivateAuto Pay for payments and offers all the same conveniences, along with a fast-tracked deal flow.

Here are some of the advantages of using DealNow:

Streamlines the transaction process when you already have a car in mind
Bypasses the shopping and negotiation steps
Provides end-to-end transaction support, including electronic signing of the bill of sale and instant payments
Enables you to close a deal after meeting a seller on another platform—or in real life
Gives you escrow-like safeguards
Allows long distance transactions with instant payment capabilities
Saves money by eliminating the need for an escrow service
Reduces risk through identity verification safeguards
Saves time by concluding deals faster
Enables fee-free payments up to $1 million that transfer instantly

How to Protect Yourself From Car Escrow Scams

Here are six tips to help you avoid an escrow scam:

1. Do thorough research on the escrow service and seller. Read reviews and verify contact information. Real escrow services have a physical address and phone number, don't let anyone rush you.
2. Only use well-established, reputable escrow companies with a proven track record. Don't use any service recommended by the seller before doing your own research.
3. Watch out for “almost” escrow services—those that do a really good job of mimicking a well-known service. Compare phone numbers, websites, and other details to the official version online.
4. Beware if a deal seems too good to be true; unrealistically low prices are a red flag.
5. Never purchase a vehicle without inspecting it yourself or having a trusted mechanic inspect it first. Refusal of an inspection is a warning sign.
6. Use PrivateAuto and send money with PrivateAuto Pay. Avoid wire transfers or cash payments.
7. Trust your instincts. If something seems off about the person or escrow service, walk away.

Buying or Selling A Car with PrivateAuto

Conduct private car transactions easily and safely with PrivateAuto. Our innovative platform connects buyers and sellers and gives them all the tools to complete the deal, from in-app financing to secure messaging to integrated payments.

If you’re in the market for your next ride, shop used cars for sale by owner and enjoy PrivateAuto’s transactional infrastructure.

10 Easy Steps for Selling A Used Car with PrivateAuto

Image highlighting Selling Car Privately by PrivateAuto
Sell your vehicle on PrivateAuto easily and conveniently. The sales process consists of a few simple steps:

1. Gather the required documentation
2. Create your PrivateAuto profile and get verified
3. List the car
4. Set your own terms
5. Vet incoming offers
6. Choose the buyer you like
7. Schedule the meetup
8. E-sign paperwork
9. Get paid instantaneously
10. Transfer ownership

Car Escrow FAQ

How much do car escrow services cost?

A car escrow service cost can range from 0.75% to 2.00% of the total transaction value. For a $100,000 car purchase, the escrow fee could range from $750 to $2,000. These fees may be split between the buyer and the seller, or one party may agree to cover the entire fee.

Some escrow services may have minimum fees or additional charges for certain types of transactions or for added services, like expedited processing. Always be sure to inquire about all potential charges and understand the full cost before selecting an escrow service.

Or, just use PrivateAuto Pay, which has no transfer fees.

Which are the most popular escrow services?

How to spot fake escrow websites?

Is vehicle escrow safe?