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How to Avoid Used-Car Scams

CARS.COM — Along with the number of consumers conducting transactions online, internet fraud has increased during the past several years. Big-ticket transactions are a primary target, but that shouldn't discourage you from selling your used car on your own. Go for it, but be cautious and educate yourself about a potential scam.

Related: Stopping Fraud in Car Sales

Please note that Cars.com does not involve itself in the transaction between the car's buyer and seller. Additionally, watch out for the following ways sellers can be lured into a scam:

Cashier's Check Scams

In a typical vehicle scam, the scammer — who usually inquires from overseas — arranges to pay for the car with a cashier's check or certified check in an amount that's more than the vehicle's purchase price. The scammer justifies this by saying a previous vehicle sale fell through, or the extra money is needed to pay for shipping expenses or customs fees on the car. Note that the initial — and even, perhaps, all subsequent — contact from this type of scammer is via text message or email, with excuses provided for a lack of phone communication.

The scammer then asks the car's seller to wire the difference either to him or to the shipping company to cover expenses. Or the scammer will send a cashier's check as a deposit, then decide to back out of the deal and ask the buyer to wire the funds back.

When asked to wire funds back to the buyer for your car, just say no. It's never a good idea to wire money to someone you don't know on a used car because it's an untraceable transaction. Avoid negotiating with anyone who proposes this kind of bargain.

Third-Party Transaction Services

PayPal and Google Wallet are examples of legitimate third-party transaction service providers. However, fake representations of these companies’ products are often used as a cover to commit fraud.

One common vehicle scam is for a fraudulent buyer to request purchase of a used car without ever seeing it, claiming it is "priced favorably." Fraudulent buyers typically confirm the car's asking price, ask for photographs and ask whether there have been any repairs to the vehicle. Upon the seller's response, the fraudulent buyer then tells the seller that a particular third-party service is the most secure way to conduct online transactions and asks for the seller's third-party service account details.

At this point, the scammer will often, as with the Cashier's Check Scam, explain that payment has been arranged in excess of the car's selling price and instructs the seller to return the overpayment via Western Union, MoneyGram or another way to transfer funds. Unfortunately, the victim of this scam does not learn that the PayPal account or other third-party transaction was fake until after the successful money transfer of the overage.

Be sure to verify the identity of the buyer as well as the payment method — PayPal or otherwise — before initiating a transaction, and avoid selling a car to any buyer whose identity you can't verify. Always exercise caution when a buyer wishes to purchase a used car without seeing it or negotiating the price, as it could be a scam.

If you have any concerns about the legitimacy of a transaction process or a car buyer, please contact the Cars.com Fraud Prevention team at reportascam@cars.com. And for more on how to shop smart for a used car, check out the video below.

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