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.

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.

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.

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.

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.


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

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:

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.

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.

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