Buying and selling cars online is an incredibly useful, modern convenience, but it’s also become a feeding ground for scammers across the country. We often speak to AA members who are worried about a deal, whether they’re buying or selling, as it simply seems too good to be true.
The good news is that with a few precautions you can avoid falling into a scammer’s trap.
Payment method
Scams targeting online car auctions crop up often. In these situations the scammer is often overseas or out of town and wants to buy your car for their father, mother or other relative.
Initially, the buyer will offer to buy the car for the asking price , no questions asked.
They’ll ask if they can pay you using PayPal or Western Union and before you know it you receive a fraudulent email saying payment has been processed, along with extra money to cover the costs for transporting the car to a fake address.
The buyer may be in a rush for some reason and will ask you to pay the extra money on to a shipping company’s fake online bank account ahead of the money actually being cleared into your own account.
The fake confirmation email makes it seem legit, so you transfer the shipping costs as requested. A couple of days pass, the money has left your account but the payment into your account still hasn’t cleared.
The type of online money transfer system used turns out to be hard to trace and near impossible to get your money back. The buyer disappears and you’re left out of pocket.
Outstanding finance
A really simple scam is selling a car with outstanding finance. In New Zealand, the finance stays with the car and not with its owner, so if you buy a vehicle with finance owing on it you’ll get more than you bargained for.
If a vehicle is listed with a bargain price tag, it’s often to lure the buyer into a quick sale and it’s often a rushed affair. To back up the sale, the seller may use an excuse like they’re moving overseas to justify the urgent nature of the transaction.
Typically, there’s nothing wrong with the car itself, but it’s not until months later when a repossession firm shows up to take the car off your driveway that you realise the car had finance owing.
Look out for trade offers
Trade offers can be completely legitimate, but sometimes sellers will propose a trade offer where their listed car is of much greater value than your own. Again, this will be to try and lure you into a quick trade without doing the appropriate finance checks.
Look for early warning signs — if the deal is too good to be true and the seller is reluctant to exchange details about them and the car, there’s usually something dodgy going on.
How to avoid being scammed
There are early warning signs to watch out for with buyers or sellers, such as lack of personal contact details, an overseas location, unconventional payment methods and the urgency of the sale.