Users of online car buying sites such as AutoTrader, Craigslist, online newspaper classified auto ads, and other non-dealer car sites often find unbelieveable good deals, only to find it was no deal at all, but a common car sales scam.

We often hear the question, “Is this a scam?” from car buyers who have found a “great deal” online. Buyers become suspicious because the price is “too good” and the payment and pickup arrangements seem a little fishy.

Cheap cars advertised on Internet sites can be scams, and it is relatively easy to spot them after the seller has been contacted, but not before. A car-for-sale ad placed by a scammer looks like any other ad — except the price is much lower than normal. They even provide pictures and VIN numbers of real cars (snagged somewhere on the Internet) to make the ads seem more believeable.

If you want to avoid the inherent problems of buying on Craigslist and other online classified ad sites, use a site such as UsedCars.com that only sells discounted used cars from licensed dealers in your area.

The general way in which the car scam works is always the same, although details can vary from case to case. Here’s how it works.

How the car scam works

The seller will have a picture of a car he claims to be selling for a low price. He will describe the car and it’s condition, and explain why the car is being sold so cheap. His story nearly always involves some unusual personal situation, and is usually very believeable. Maybe he just got a divorce and needs to sell his wife’s old car. Or his father died and his car is being sold. Or he just lost his job and needs the money. Or he is a soldier leaving for Iraq or Afghanistan and doesn’t need the car any longer.

Many of these scam stories involve a seller who claims to be out of the country or in the military, although his car is still in the country somewhere and must be shipped to the buyer. In fact, most of these scammers actually are in another country — where they can’t be found and prosecuted.

The seller might claim that he will use ”eBay protection” with “eBay shipping” services, and that the buyer’s money will be protected by using some kind of third-party escrow or bank account for safe payment — and that the buyer will have 5 days to decide whether to keep the car or return it and get his money back. It’s all to make the buyer feel that the deal is legitimate and safe, when it is not.

Why it’s a scam

The seller’s story and explanations are all nonsense. eBay has no such program or services for cars not sold through the eBay site. The escrow service or bank account is not legitimate, although it might sound like it is. It’s a way for the scammer to get your money fast and then disappear.

In fact, there is no car. The picture of the car in the seller’s ad was snatched someplace on the Internet. The car might actually exist somewhere, but it doesn’t belong to the “seller.”

One way of exposing a scam is to ask the seller to email you a picture of himself standing next to the car. Of course you’ll get all kinds of excuses: “the car isn’t here right now,” the car is in a shipping container,” or “I’m in Iraq and the car is in New Jersey.” This is one of the common elements of this scam — the car and buyer are never in the same place.

This car scam will take your money and you’ll get no car. The scam has been around for years, but many people have never heard about it, and end up learning about it the hard way.

Don’t fall for this common scam. If the deal sounds a little fishy, follow your intuition and avoid it. Find your car somewhere else.

Actual emails from scammers

This one was sent to us by Diane N.:

“If you are interested in my 2003 Mini Cooper S, it is in perfect condition, with no need for additional repairs, no scratches, dings, special marks whatsoever. It has 69,945 miles and the VIN # is : WMWRE33463TD65004. It has a clear title ready to be signed and notarized on your name.

I have the pictures hosted on the net and you can see them at :http://mynetimages.com/album/LauraPlummer1/2003_Mini_CooperS/. [Editor: where did they steal the nice picture?]

The car is located in Honolulu, HI. [Editor: sure it is]

The price is $2,970 including shipping costs anywhere in the continental US. There are no other costs regarding this transaction. I am selling the car because I am in the army, and my unit will be deployed to Afghanistan in December. [Editor: sure, you are in the Army, that's what many of you scammers say]

The transaction will be closed only through a 3rd party and this way we will both be protected. [Editor: only the scammer seller is protected]  My time is limited due to my job in the army so I decided to use a service from ProPay. [Editor: ProPay is NOT an escrow service] To begin the transaction I’ll need your full name and shipping address, I will forward the details of our transaction to ProPay and then you will receive an invoice from them. The car will be shipped insured to your location with DAS and you will have 5 days for inspection. [Editor: the car never shows up, and the seller disappears from the face of the earth, along with your money]

  Thank you,
       Laura Plummer [Editor: a nice girly name for a scumbag scammer]“

Here’s one shared in an email to us by Nathan J.:

“Thanks for your mail, I think am happy with your price.  I wish to complete the payment soon so I can assume the new owner of the vehicle. [Editor: why don't these scammers learn good English?]
 
Actually I bought a vehicle from a seller in Atlanta GA at the price of $26,000 and I sent payment to him, on getting to the pick up, my shipper and agent [Editor: they always have an "agent"] discovered that the vehicle has had an accident before and the seller did not inform me of this so I had to cancel the transaction.

I have informed him that I have seen another vehicle with a lesser price and have instructed him that he will be sending the funds to you and he accepted, though he said that he will deduct $100 from the total funds as the listing expences [Editor: learn to spell, Mr. Scammer] since he will place the vehicle to the Advert [Editor: what is he saying?], he also told me that his credit union allows a refund payment on one cashier’s check only [Editor: that's what they all say].

So, He will be sending the whole funds($26,000) to you. Since your vehicle,is cheaper ($16,599), the difference ($9,401) would be used to offset shipping charges and other expences. You will have to deduct your price once payment gets to you. [Editor: why would anyone send $9401 extra money to someone he doesn't know and has never met???]

I will advice my shipper and agent to contact you for the pickup as soon as you receive the payment. and other necessary documents will either be collected from you at the point of pick-up or sent via fedex courier to me.

Confirm this and provide 1)Name (cheque will be made payable to), 2)Address ( the check will be delivered to) and Phone number for check payment to be delivered to you via registered mail.

Thanks for your understanding hope to hear from you soon” [Editor: I'm sure you do, you scumbag]

Here is another from Diane N.:

“I am emailing you regarding the VERY Nice 2004 HONDA ACCORD EX, that I have for sale on Craigslist, I sell it at this price ($4000) because i just finished the divorce with my husband and i don`t have drivers license. [Editor: sure, nice story Ms. Scammer -- brings tears to my eyes]

The vehicle looks and works perfect. As you see it has a lot of options. No hidden problems and never involved in any kind of accidents, ONLY 55,100 miles. The VIN# is: VIN: 1HGCM56664A149427 [Editor: VIN picked up on the Internet somewhere. It is a real car, but doesn't belong to scammer]

Since the car was also listed on eBay.com [Editor: maybe so, but it's not your car Ms. Scammer], I prefer closing the transaction trough their Vehicle Purchase Protection system [Editor: no such eBay system for Craigslist cars] because we are both protected. If you don’t know how does the eBay Vehicle Purchase Protection Program work please let me know so I can help you.

I used it several times (as a seller but as well as a buyer) and everything was perfect.
The vehicle was inspected by eBay. [Editor: eBay does not inspect cars] as well, shipping & handling fees are included in the final price ($4.000.00). If you want to see more pictures please click here:Honda Accord . [Editor: nice picture — if only it was really your car Ms. Scammer]

If you are interested please let me know your shipping details so i can open a transaction case. {Editor: a what???]

     (signed) Theresa Robinson [Editor: again, nice cute girly name for a scammer]“

Avoid buying cars you can’t see

In fact, it’s not a good idea, scam or no scam, when you can’t actually see the car, can’t drive it, can’t have it inspected by a mechanic, and can’t talk directly to the seller. Scammers tempt buyers to take the risk by offering unrealistic low prices and offering a “money back guarantee.”

A better way to find cars online

If you want to avoid scams and the problems of buying cars on eBay and Craigslist, use a web site such as UsedCars.com that only sells already-discounted used cars from licensed used-car dealers. The big advantage is that  you can see the car, inspect it, drive it, deal with a known seller. UsedCars.com is the largest online used car sales site.

Another kind of car scam

If you found this article looking for information about another kind of car scam, a scam against individuals selling a used car, not buying one, then you want to read the article, Car Buyer Scam.

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Here’s how to determine a fair price for brand new cars (see below for used-car pricing).

All new cars have a window sticker that displays the manufacturer’s suggested retail price (MSRP). It may also include destination charges, dealer-installed option prices, and other miscellaneous charges. The total of these charges is the price you would pay for that vehicle, less sales tax, without any discounts or rebates.

All these charges but destination charge can be negotiated. Manaufacturers charge dealers this fee for vehicle delivery, and dealers simply pass it along to customers without markup. It cannot be eliminated from the cost of a car.

Price can be negotiated for most vehicles. Unless the vehicle is a hot seller and in short demand, it’s usually possible to get dealers to discount the MSRP. But, how much? What’s the best price I can expect?

Here’s your strategy for negotiating price.

1. Get online price quotes

Use Internet car buying/pricing services to get price quotes. The quotes are free and you are not obligated in any way to accept them. We recommend you get quotes from multiple services so that you’ll have a number of prices to compare. The best sources for free quotes are:

• Yahoo! Autos
• InvoiceDealers
• Edmunds.com

The prices come from dealers in your area. Even though the prices are discounted, you may be able to do better if you are a good negotiator.

2. Learn about rebates and incentives

Visit Best Car Deals for information and advice about current car incentives, rebates, lease deals, and low interest loans, including 0% APR loan deals.

Also go back to Edmunds.com (see link above) and click on the New Cars section ”Rebates and Incentives” link. You’ll be shown the current incentive programs, if any, for the vehicle you’re interested in. Any price quotes you receive should already include any Customer Cash-Back Incentives, but you should verify this to make sure. If there are Dealer Marketing Support incentives, dealers are not required to share that money with customers, but many do.

3. Get dealer invoice prices

Invoice price is the wholesale price that a dealer is charged for a vehicle by the manufacturer. Dealers make their profit by selling at a margin over invoice price. Essentially, the best deal you should expect to get on a car purchase is something above invoice price, but less than MSRP, allowing the dealer to make some profit, which is needed to stay in business.

Get invoice prices for any vehicle make and model at Edmunds (see link above). It’s free.  Also check Edmunds’  TMV (True Market Value) price for your vehicle. It’s their best estimate of how much other people are actually paying for that car.

It is possible under certain conditions that you may be able to buy for less than invoice price. 

How so?

Dealers get certain bonuses and holdback fees from the manufacturer when vehicles are sold, especially when sales goals are reached. This reduces the actual cost of a vehicle to the dealer. Furthermore, any factory-to-dealer cash-back rebates (Marketing Support, mentioned above) also serve to reduce cost. If a dealer is willing to share some or all of these cost reductions with customers, your purchase price can actually fall below invoice price.

How much over invoice?

Here’s a good rule of thumb: On cars whose MSRP is $20,000 or less, offer $500 over invoice. For cars with MSRP of $20,000 to $30,000, offer $1000 over invoice. And for cars with MSRP over $30,000, offer $2000 over invoice. This assumes the dealer is getting no rebates or marketing support from his manufacturer.

These are only suggestions. If the car you want is in short supply due to heavy demand, you might not be able to get much of a discount at all. If it is a slow seller at the end of the model year when a dealer has plenty of inventory, you may be able to do better than invoice price, assuming there are manufacturer incentives. 

What to Pay for Used Cars — What’s a Good Price?

Used cars can vary in price depending on year model, mileage, and condition.

The best way to determine a fair price for a used car is to check with one or more used-car pricing guides such as Kelley Blue Book (www.kbb.com), NADA Guides (www.nadaguides.com), Edmunds (www.edmunds.com). Sellers generally use these guides to set their asking prices.

Private sellers often price their cars too high, allowing some room to negotiate with potential buyers.

Don’t fall into the trap of negotiating a price down, only to find out you still paid too much. For example, a dealer could set an asking price of $8000 on a car that worth only $6000. When a buyer comes in and talks the price down to $7000, he may think he’s gotten a bargain. However, the dealer made $1000 more than he should on the sale — and the buyer paid $1000 too much.

Dealer prices are generally higher than if a car is purchased from an individual.  However, UsedCars.com lists cars at local dealers at already-discounted prices. You can get free no-obligation price quotes online, which saves a lot of time when price shopping.

If you prefer to buy your car from an individual private seller, you can find hundreds for sale on the eBay Motors web site.

Prices are almost always negotiable. Dealers and individual sellers actually expect buyers to negotiate and set prices accordingly. Asking prices are generally about 10%-20% higher than sellers are willing to sell for. Dealers typically make more profit per-car on used cars than on brand new cars.

If a car is being advertised for an unusually low price, it’s probably for a reason. The car may have problems that the seller may not mention unless you ask. Beware of bargain prices unless you understand the reason.

Used car prices can also vary by area of the country. Convertibles, for example, are more expensive in sunny Florida than in chilly Vermont. Four-wheel-drive vehicles are in greater demand, and more expensive, in states with bad winters. Small compact cars are popular in college towns. Trucks are more in-demand in rural areas.

Use Kelley Blue Book and NADA Guides to check a used car you think you want to buy. Then have a mechanic check it over for problems. Any problems found, if you still want to buy the car, should be used to negotiate the selling price down further.

Also get a CarFax (www.carfax.com) vehicle history report to find out if the car has ever been seriously wrecked or totaled.

Beware of buying used cars on automobile clasified ad sites such as Craigslist and Autotrader, or even from newspaper classifieds web sites. Read about a common car sales scam in this article.

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