Online Auto Scams to Watch Out For

A person holding their credit card and inputting the information to make an online purchase on their laptop.

From Autotrader and CarGurus to Cars.com and Craigslist, the wheels of internet car buying and selling seem to never stop rolling. Frost and Sullivan, a research and consulting company, predicts around 6 million vehicles will be sold online by 2025. 

Buying and selling your vehicle online is convenient, but it can also be a haven for scammers to wreak havoc. In this blog, we’ll explore popular online auto scams to watch out for, how to avoid them, and why finding a trusted source for auto services and repairs is so important.

Buying and Selling a Vehicle Online

Like anything else, buying and selling a vehicle online has its pros and cons. While we may not be in the wild west of the Internet, it is nevertheless inhabited by bots and bandits looking to get your credit card digits in a few clicks or less. To get a better idea of the benefits and drawbacks, let’s explore five pros and cons of buying a vehicle online.

Pros

  1. Time-saving. Instead of driving to the closest dealership, shopping on your computer or mobile device opens you up to a world of vehicles at your fingertips.
  1. 24/7 shopping. Fitting in car shopping during an already busy day can be stressful, and not everyone wants to spend their Saturday cruising a lot. Whether it’s 8 AM or 8 PM, online marketplaces make it easy for you to shop on your schedule.
  1. No pressure. Sometimes you may just need some time to peruse 100 or so vehicles before you feel comfortable with your decision, and the internet is a good place for that.
  1. No negotiations. Not everyone is good at or enjoys bartering. Typically, the price listed online is the price you’ll pay.
  1. Easy dropoff and delivery. Some online marketplaces offer dropoff and delivery right to your driveway.

Cons

  1. No in-person review. High-quality photos and videos are great, but there’s a reason people still go to open houses when house-hunting. The same is true when shopping for a new vehicle. Nothing beats an in-person inspection.
  1. No test drive. Arguably, the most important trait of your vehicle is its reliability and how well it drives. Buying a vehicle online that you’ve never had the chance to drive could mean you end up with something you don’t love.
  1. No room for negotiation. Some people love a good back and forth with a salesperson. While the lack of negotiation may jive well with some personalities, others may lament the lack of hardballing.
  1. There may be a preselected lender. Some online vehicle marketplaces may have one or a small list of preselected lenders. If you’re really tied to a specific lender, this could be an inconvenience for you.
  1. Less flexibility with trade-ins. You may have less wiggle room in terms of the value of your trade-in since some online marketplaces have a fixed rate for your vehicle make, model, and year.
A man looking at cars for sale on his laptop.

Online Auto Scams to Watch Out for When Buying a Vehicle Online

With the pros and cons covered, let’s explore the top online auto scams to watch out for when you’re looking to buy a vehicle online. 

Fake Ads

Some scammers will advertise a vehicle they don’t even own. The ads may look great and display photos that match the description of the car or truck. Some even go so far as to include an email address and phone number to contact the “seller.” 

If you’re purchasing from a private seller on a marketplace like Facebook Marketplace or Craigslist, always ask for the vehicle identification number (VIN) and walk away from the sale if the private seller refuses to let you inspect the vehicle first.

Gift Card Scams

Paying for a first date with a gift card doesn’t set a great first impression, and a personal seller insisting you pay for the entire vehicle with gift cards should be just as big of a red flag. It bears repeating: never purchase a vehicle with gift cards. You’ll never see the money again or the vehicle.

Wire Transfer Frauds

If the personal seller asks for you to wire funds to their account first, don’t do it. Why? Wire transfers are notoriously difficult to refund if the deal turns out to be a bust.

Title Washing

Title washing is when a vehicle’s history, like the fact that it sustained major damage or other critical information, has been erased. These schemes may accompany the sale of a used car, and they’re definitely illegal. To avoid title washing, order a report that gives you a rundown of the vehicle’s history before buying it.

Curbstoning

Lemon laws only apply to auto dealers who sell new vehicles. For this reason, scammers will sometimes take advantage of what’s called curbstoning. These “deals” can happen in empty parking lots, on the side of the road, or even at a curb in front of a home (hence, “curbstoning”). 

These sorts of sales are usually of salvaged or damaged vehicles. The seller will then disappear without providing any contact information. Be sure you only do business with reputable sellers you’ve researched in advance.

Identity Theft

This one isn’t so much about the scammer getting your money as it is about them stealing your identity. This will usually happen when the “seller” asks for your personal information such as bank account numbers, social security numbers, or maintenance records. 

Be careful giving this information to anybody. Before handing over vehicle maintenance records, be sure to make copies and black out or white out any personal information.

A picture of a Subaru crossover sitting in a driveway on a sunny day.

Online Auto Scams to Watch Out for When Selling a Vehicle Online

Fake Escrows

Escrow is a legal arrangement when a third party temporarily holds the money until a specified condition has been met. In this case, the fraudster will use a fake escrow service to hold the money for the vehicle purchase. After the seller has turned their vehicle information over, the money can’t be withdrawn. To prevent this, always pick a trusted and reputable escrow service.

Payment Plans

A “buyer” offering payment plans over time is something you should probably avoid. In this case, the “buyer” may make the first or second payment once receiving your vehicle, but then stop paying altogether. As the seller, your options for getting the remainder of your money can be limited.

Personal Checks or Cashier’s Checks

Be careful about accepting a personal check or cashier’s check as payment for a vehicle. If you’ve turned over the title to your car before the check clears, you may end up learning too late that the check is fake. Before you sign over the title, contact the financial institution that issued the check to make sure it’s legitimate.

Instant Auto Facts Scam

The Federal Trade Commission (FTC) has received a lot of complaints from sellers receiving calls and texts from “buyers” asking first for a vehicle history report. However, they ask the seller to request the report from a specific website requiring the seller to enter personal information and pay a fee of around $20 by credit card. It may go without saying, but always avoid a quick auto report scam like this.

Reputable Marketplaces to Buy and Sell a Vehicle

This blog isn’t intended to scare you away from buying and selling your vehicles online. But it’s important to know the online auto scams to watch out for and where they are most present. Generally, it’s in your best interest to shop for your vehicles on trusted digital marketplaces. Below is a list of some of the most popular, trusted, and tested online dealers for buying and selling your vehicle:

This isn’t to say no one has ever had success buying and selling a vehicle on eBay or Craigslist, but you should be extra careful on those marketplaces.

Most Common Auto Repair Scams

While auto repair scams aren’t as likely to happen online – since you have to go into a shop to have your vehicle serviced – it’s still good to be aware of these. It’s important to note that most auto scams are successful because they promise to fix a component of your vehicle that (1) either wasn’t malfunctioning yet or (2) addresses a component of your vehicle that could be fixed through simple TLC. Let’s cover a few of the most common auto repair scams below.

  1. New brakes. Auto repair scams centering around a vehicle’s brakes are common. No one wants to drive with faulty brakes, but some mechanics may try to sell you new brake pads way before your vehicle needs them. However, if you trust your mechanic, then there’s no need to question them when you need new brakes — they’re just looking out for you.
  1. Double charges. Charging consumers for multiple jobs at once is a common scam among untrustworthy mechanics. For instance, replacing a vehicle’s spark plugs and coils at the same time is common, but unscrupulous mechanics may try to double-charge you for the number of hours at work.
  1. New tires. Not all flat tires are a sure sign you need brand new tires right now. While we recommend having your tires rotated every 3,000-5,000 miles and balanced every 5,000-6,000 miles, brand new tires aren’t really necessary until the tread fails to pass the penny test.
  1. Alternator Scams. A lot of vehicle owners don’t really know what their alternator is or what it does. Because of this, auto repair shop scams regarding the alternator or other under-the-hood components are common in the repertoire of scammers. Never allow a mechanic to say “it’s too complicated” if you’re unsure what a mysterious charge is on your bill.
A woman holding her credit card while looking distressed and on a phone call.

What If You’re the Victim of a Scam?

If you’re reading this because you’ve found yourself the victim of an auto scam, consider taking these next steps:

  1. Contact your state attorney’s general office and the Better Business Bureau to report the scammer(s).
  1. File a complaint with the FBI’s Internet Crime Complaint Center and the fraud center at the National Consumers League.
  1. Report the details of the fraud and scammer to the Federal Trade Commission.
  1. Victim of a wire transfer fraud? Reach out to the organization or financial institution that facilitated the transfer.
  1. If you provided the scammer with your personal information, consider updating your username and password for all online accounts.
  1. Monitor your credit score and look for anything suspicious (like a sudden drop) as this could be a sign of identity theft.

Auto scams are no joke. Before you buy, sell, or drop your vehicle off for repairs, be sure the business or person you’re dealing with is trustworthy. A little bit of due diligence can go a long way when it comes to saving you time and money.

At K&W, each of our store locations is staffed with trusted and expert mechanics. We’ve made a name for ourselves by helping our customers get the help they need so they can get back on the road safely.