Caveat emptor! It means “buyer beware!” Used car sales often involve thousands of dollars. It’s no wonder that there are so many car buying scams.

And the scammers aren’t small potatoes either. The US Department of Justice recently tied car scams on the internet to organized crime in Romania.

Some scams are easy to spot. For example, a car for sale with an asking price far below the market value. As the saying goes, “if it’s too good to be true…”

The internet is a huge space. That makes it a target-rich environment. Combine that with the high-ticket sales, and it’s the perfect place for crooks to make a dishonest buck.

Let’s take a look at some of the most common car buying scams.

Car Buying Scams: Buyer Beware

Car Buying Scam #1 - Spoof Pages

This is a common scam on Craigslist. A seller advertises a car he doesn’t have. He copied and pasted someone else’s ad and posted it in several cities and regions, sometimes a dozen or more.

The crook behind this spoof page may be out to get your personal info, such as banking account info, credit card number, or social security number.

A lot of times, they’re out to get a payment for a car they don’t intend to deliver. We’ll talk more about how they do that in a moment.

Car Buying Scam #2 - eBay as a Third Party

This scam works like this:

  • You inquire about a car listed on Craigslist or another ad site.
  • The seller responds by email. They say that they need to sell quickly. There’s almost always a story - the seller is being deployed overseas, a woman who recently divorced, etc.
  • The seller says they will use eBay Motors as a third party. You receive an email that looks like it’s from eBay Motors (but it’s not) with payment instructions. It promises that the transaction is covered under the eBay buyer protection plan (but it isn’t).
  • They won’t meet with you in person. They claim that their military unit is being deployed, they are out of town on business, caring for a loved one with failing health, etc.
  • You send the money, and they don’t deliver the car.

Know that eBay Motors never acts as a third party for cars advertised on other sites. If a seller from another site like Craigslist or Facebook Marketplace tries to tell you they’re working with eBay, know that it’s a scam.

Car Buying Scam #3 - Odometer Fraud

Fraudsters change the car’s odometer reading to make it look like it has fewer miles. It’s also known as odometer rollback or clocking.

Late-model cars have a computer chip that records the car’s mileage. However, a swindler can change the mileage to a lower reading a couple of ways:

  • Replace the instrument cluster with one from a car with lower mileage.
  • Reprogram the chip.

According to the National Highway Transportation Safety Administration (NHTSA), over 450,000 passenger vehicles are sold with false odometer readings. This leads to over a billion dollars in consumer loss a year.

Odometer tampering is a federal crime that carries a sentence of up to 7 years in prison.

Car Buying Scam #4 - Title Washing

Following disasters like hurricanes Katrina and Harvey, a lot of cars suffer flood damage. Those are times when the used car market sees a lot of title washing.

When a car has been in water covering the engine compartment, such as when it gets caught in a flood, the insurance company writes it off as a total loss and the car gets a branded title.

There are other types of title brands.

  • Total loss. The cost to repair is higher than the value of the car, so the insurance company writes it off.
  • Junk or salvage. When the car gets sold to a junkyard or salvage yard.
  • Fire, flood, or storm damage.
  • Rebuilt from salvage. A salvage or total loss vehicle gets restored to roadworthy condition and passes a state-approved inspection. The title reflects that the car used to be junk, and so its value is lower than similar used cars.

It’s legal to sell cars with a branded title as long as the seller reveals it.

A car with a branded title has a lower market value. It’s also hard to sell,

so racketeers move the vehicle to another state that doesn’t recognize the brand. Then they apply for a new title. The brand gets “washed” from the new title.

The US Department of Justice has set up the National Motor Vehicles Title Information System (NMVTIS) to combat title washing. However, not all states are participating yet.

Car Buying Scam #5 - Title Cloning

This is like identity theft, except for cars. The scammer signs over a free and clear title without any brands. The problem is, it’s for a different vehicle.

Car Buying Scam #6 - Counterfeiting

Cash is king, but not if the bills are fake. You may have seen how retail stores use a special pen to check for bogus bills. That will catch your everyday casual amateur money printer, but some criminals are more sophisticated.

Banknote bleaching. Those bill detector pens will tell you if the bill is printed on real banknote paper. However, crooks can bleach the ink off of a $1 or $5 bill and print it as a $10, $20, $50, or $100 bill.

Except for the $1 and $2 bills, US banknotes have a strip that can be detected by UV light. Each denomination has the strip in a different place on the bill. Also, they are of different colors. For example, a $5 bill has a blue stripe that’s on the left side of the front face of the bill. A yellow-orange stripe appears on a $10 note to the right of Hamilton’s image.

When you check a $50 bill with a UV light, you’ll need to look carefully. The yellow stripe is in nearly the same location as the one on a $10. While you find a yellow-orange stripe on a $10, the $50 should have a yellow stripe that resembles the color of mustard.

Visit uscurrency.gov for more about how to detect fake banknotes.

Phony cashier’s check. A buyer pays with a real-looking cashier’s check. Your bank cashes the check, and the crooked buyer disappears into the night with your car. Meanwhile, the funds don’t clear, and the bank holds you liable. They may even press criminal charges.

Another scam using a counterfeit cashier’s check is the overpayment scam. The buyer “mistakenly” sends an overpayment. He asks you to cash the check and wire a refund for the overpayment.

The check doesn’t clear, and the swindler has done a vanishing act.

Car Buying Scam #7 - Fake Escrow Account

A lot of online escrow accounts are fake and run by scammers. Some even claim that they are affiliated with reputable services like Escrow.com. They are not. Some might use a URL address that's similar to Escrow.com, attempting to fool the customer.

There are a couple of ways tricksters use fake escrow:

  • A seller gets a (fake) notice that the funds were received. The buyer takes the car, and the seller never gets the money.
  • A buyer puts money in the make-believe escrow. The seller doesn’t deliver the goods and drops off the face of the earth.

Never let anyone pressure you into using a particular escrow website. Always visit the site to look for signs of fakery.

  • Many of the scam escrow websites use extensions like .org, .biz, or .info instead of .com.
  • Scammers often use words like “safe” and “secure” in their domain names. For example, “secure-escrow.com.”
  • Legit escrow services always transfer funds by wire. They provide a routing number and account number. Ask your bank to verify where the funds are going before you send them.
  • Use the “whois” tool on domain registrar sites like GoDaddy and Network Solutions.

Car Buying Scam #8 - Wire Service Scam

Scammers may try to get you to wire funds through services like Western Union or MoneyGram. Like sellers in the fake escrow, they get the money but you never get the car.

Car Buying Scam #9 - Payment in Gift Cards

We saw earlier that a lot of these scams originate from offshore crime rings. In other funding scams, the criminals launder the money by purchasing bitcoin. Here, they let you launder it for them by sending gift cards.

Car Buying Scam #10 - Payment With Cryptocurrency

It’s the same game as with a gift card, but you pay by bitcoin or other cybercash.

Car Buying Scam #11 - Vehicle History Report Scam

In this car buying ripoff, a buyer makes contact and asks the seller to provide a vehicle history report from a particular website. Sometimes, the site redirects to another that ends with “.vin.”

Now, some can be duped into thinking it’s legit. After all, it seems reasonable that it’s a website to look up the vehicle identification number (VIN).

But the International Corporation of Assigned Names and Numbers (ICANN) designated .vin for wine-related sites (vin is “wine” in French). However, the .vin extension isn’t restricted. Almost anyone can get a .vin domain.

Sellers end up on a landing page to order the nonexistent report. The price is usually around $20. You enter your debit or credit card info. The report never comes, and the trickster has returned to whatever dark corner of the earth he came from.

Never order a history report from a site that a buyer leads you to. Instead, get a National Motor Vehicles Title Information System (NMVTIS) approved history report. You can find a list of providers on vehiclehistory.gov.

Even better, get a comprehensive history report from a reputable provider such as AutoCheck, a trusted partner of PrivateAuto.

Final Thoughts

A public service announcement from the FBI offers some tips to help spot a car buying scam.

  • The asking price is far below the car’s value.
  • The seller is in a hurry to complete the sale. They demand you send the money right away.
  • The seller won’t meet in person. There’s always a story behind that:
  • Their military unit is being deployed.
  • Death of a family member or relative with failing health.
  • They work in the oilfield, on a boat, or are out of town on business.
  • They try to make it look legit by claiming they are affiliated with eBay or another reputable company.

PrivateAuto makes it safe and easy to sell your car online.

  • Manage offers without sharing your personal info.
  • Verifies both buyer and seller identities.
  • The test drive scheduler lets you meet in a safe location.
  • Our integrated banking option, PrivateAuto Pay, providing secure and simple transfer of funds.

Plus, your buyer can apply for financing on the PrivateAuto platform.

Ready to sell your car? Get started with PrivateAuto today.