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:
Be cautious of unconventional payment methods
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 contact you and offer to buy the car for the exact asking price on the website, no questions asked. They’ll ask if they can pay you using some sort of online payment system such as PayPal or Western Union and before you know it you receive a fraudulent email saying that 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 onto 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 transferring system that was used turns out to be hard to trace and near impossible to get your money back from. This time it’s the buyer that disappears but, once again, you’re left out of pocket.
Always check for 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 very 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.
This isn’t an overly complicated scam, but it happens often and leaves those affected both carless and out of pocket.
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 beforehand.
Both are easy traps to fall into, but 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.
If you have any doubts, make sure to always get the appropriate finance checks done on a vehicle before you decide to buy it. This will give you peace of mind that you’re not about to buy a car and inherit a mountain of debt.
So how can I avoid being scammed?
There are several 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.
Our advice is to avoid rushing into anything – these things can (and should) take time. Do your homework and ensure you carry out all the relevant history checks before buying a car – spending a little extra money short term can potentially save you a small fortune in the long run.