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Common scams to look out for when buying or selling a used car

By Tom Fraser, 15 Jul 2020 Car Advice

Common scams to look out for when buying or selling a used car

Sometimes it really is too good to be true. Arm yourself with knowledge and trade confidently with these helpful tips

Scammers are running rife in Australia at the moment.We’ve only just passed the halfway mark in the year but the number of scams, and amount of money scammed, is on-track to eclipse 2019’s record well before year’s end. 

(Case in point, even while writing this advice story we received a call from a scammer pretending to be the Department of Home Affairs!)

Read next: Bizarre dash cam footage shows insurance scams are alive and well

You might think that scams disproportionately affect older generations but Australian Competition and Consumer Commission (ACCC) statistics show that ages between 25 and 55 are being hit the hardest.

With more time on their hands during coronavirus lockdowns, scammers are putting in a more believable effort in an attempt to fleece you out of your hard earned money.

While most scams are generated through emails, the internet is the second biggest honeypot and classifieds (like when buying or selling a car) remain one of the most dangerous places to get scammed.

Read next: Stolen car prevention tips

Here are some scenarios that you should look out for when buying or selling a car online.

Buying cars sight unseen

You already know that this is fraught with danger but it’s worth understanding why. Big purchases require due diligence, and if you're unprepared to go and investigate the car you could be in for trouble. After initially arranging an amicable deal the the seller could quickly change tacts and take the money and run – should they feel like it. 

You should only pay money for a car that you can verify is registered to the seller and have ensured that it is what it claims to be. We understand that sometimes rare cars in remote locations can only be acquired this way but if you get caught out and end up being scammed, you really have little recourse available.

Unrealistic price, suspiciously low price

You should know that low prices are meant to attract attention, and it’s this aspect that scammers aim to exploit when they price a car lower than the rest of the market.

Try and ascertain why the car is priced lower than the rest of the market by checking the kilometres, condition and service history. If none of those checks are out of the ordinary and the car is still unrealistically cheap for some reason, it’s probably a scam in which the car might not even exist!

Read more: How to prepare your car for sale

Meeting in a public space

Sellers that insist on meeting in a place away from their home could be hiding their address for a reason. It’s a customary given that when buying or selling something privately you can expect to visit the seller’s house. It makes it easier for them so if they suggest meeting elsewhere you should proceed with caution.

The car might be stolen, the seller mightn’t want you coming back to seek recourse at their address when you realise something is wrong with the car, or worst case – your personal safety is at risk if they plain and simply try and rob you.

Read all about the best security options here

Unconventional payment methods

The best kind of payment methods for buying a car are bank cheques, bank transfer and cash. If a seller tries to get you to pay for a car via money order, Bitcoin, pre-loaded credit cards or wire transfer you should immediately be cautious that they’ll take the money and run away with the car. 

For more information about how to pay for a car privately see this explainer here.

Quick sale

Oftentimes private car sellers are keen to move on their car as quickly as possible, but if you suspect a seller is rushing the process then you have to ask why.

This might be because the seller wants you to overlook a dodgy aspect of their car or mention that they have to travel overseas and need to sell in a hurry. This can lead to a scam in which the seller can ask for the money and say they’ll organise the car to be delivered, yet it never shows up.  

Read next: Car thieves are getting younger

Overpayment scam

This is one where the sellers have to be wary, and in relation to the sight-unseen situation. The buyer may send a cheque for more than is necessary for a car and then request that you refund them the difference. From there, you discover that the cheque has bounced and you’ve just sent the balance of difference to them.

Always ask for a bank cheque that ensures the money is actually in the account it's being drawn from. 

At the end of the day, the safest way to do business is by checking and checking again and inspecting the item yourself prior to arranging a deal. A car is a big purchase to make so always ensure you do your homework and arrive at a fair and reasonable price for both parties, exchanged in a safe and smart manner.