Online Car-Buying Scams to Watch Out For

A hand holding a car key with a red bow tied to the key ring, held in front of an out-of-focus sedan car in the background.

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The wheels of online car sales are in motion. Research and consulting company Frost and Sullivan forecasts 6 million cars being sold online around the world in 2025, which would be more than a 600% increase from 2019. Buying a car online is certainly convenient, and it may even save you some money, but it's important to keep your wits about you to avoid online car-buying scams.

Online car-buying scams come in the form of fake ads, gift card ripoffs, fraudulent wire transfers, title washing, "curbstoning," identity theft, fake escrows, payment plans and phony checks. The financial toll of these scams adds up to millions of dollars a year. Here's what you can do to save yourself the trouble.

Is It Safe to Buy and Sell Cars Online?

Just as with any other way to do business, buying or selling a car online has its pros and cons.

Here are five of the pros of buying online.

  1. It saves time. Rather than driving from dealership to dealership to look for a car, you can go shopping on your computer or mobile device.
  2. You can shop around the clock. Whether it's 10 a.m. or 10 p.m., online marketplaces for buying and selling cars are always open.
  3. It's a no-pressure environment. When you visit a car dealership, a salesperson may press you into making a hasty decision. That doesn't happen when you're shopping online.
  4. You can steer clear of negotiations. Typically, the price listed online is the price you'll pay. If so, there's no need to play hardball with a salesperson.
  5. The car can be delivered practically anywhere. Oftentimes, you can buy a car online and then have it brought to your home, your office or another location.

Here are five of the cons of buying online.

  1. There's no up-close look at the car. You may see detailed photos and videos of a car, but when you're buying online, you usually can't inspect it in person before you buy.
  2. You can't take a test drive. Buying a car online typically means you can't test-drive it first. However, more and more online sellers are providing this option.
  3. There's less room for negotiation. It's nice to skip the process of haggling, but it also means you may not be able to negotiate for a lower price.
  4. You may not get to choose your lender. If you decide to buy online, you may be required to take out a car loan from just one lender or from one of several lenders that have been preselected.
  5. You'll have less flexibility with trade-ins. When you want to trade in your car, you may find that there's less wiggle room in terms of the value of your trade-in.

Despite those cons, buying and selling cars online can be safe, as long as you take the proper precautions to protect yourself. Among the reputable online marketplaces for buying and selling cars are Autotrader, CarGurus, CarMax, CarsDirect, Carvana, eBay Motors and Vroom.

Scams to Watch Out for When Buying a Car Online

Here are some of the most common online car-buying scams to look out for—and how to avoid them.

Fake Ads

Some crooks will advertise cars that they don't even own. These ads may appear legitimate, as they typically display photos matching the description of the car. They also may include an email address or phone number to contact the purported seller. To prevent being scammed by a fake ad, ask for details about the car (such as the vehicle identification number, or VIN). Walk away if a private seller refuses to let you inspect the car or declines to meet in person.

Gift Card Ripoffs

Some scammers insist that you pay for a vehicle with gift cards. This is a red flag. Never purchase a car with gift cards. You almost certainly will never see the gift cards again—or see the car you hoped to buy.

Fraudulent Wire Transfers

If a seller asks that money for a car be exchanged through a wire transfer, politely decline to do so. Why? Because it can be difficult to recover your money if the deal turns out to be a scam.

Title Washing

Title washing involves rinsing away a car's history, such as the fact that it sustained major damage in a wreck, or by otherwise masking critical information. It's a scheme often carried out in the sale of a used car, and it's illegal. One way to avoid becoming the victim of a title-washing scam is to order a report that gives you a clear picture of the vehicle's history before you buy it.


A curbstoner sells used cars without holding the required license or permits, and without maintaining a regular place of business. These fraudulent deals happen in vacant parking lots, along the side of a road or even at the curb in front of a home. Curbstoners typically sell salvaged or damaged cars to unsuspecting buyers, and then disappear without providing any contact information. So that you don't get clobbered by curbstoning, do business only with reputable sellers that you've checked out in advance.

Identity Theft

In this case, a scammer doesn't care about buying your car. Instead, they're interested in stealing your identity. They do this by requesting personal information such as bank account numbers, Social Security numbers or car maintenance records. Be careful about supplying this type of personal data to anybody who says they'd like to purchase your car or accept a trade-in. Before you hand over car maintenance records, make copies and black out any personal information.

Scams to Watch Out for When Selling a Car Online

Here are some of the most common online car-selling scams to look out for—and how to avoid them.

Fake Escrows

In this scam, a fraudster poses as a buyer and uses a fake escrow service to hold the money for a car purchase. After the seller turns over the car title, they quickly find out that the escrow money can't be withdrawn. To prevent being scammed like this, pick a reputable escrow service that you want to use.

Payment Plans

A scammer may try to steal money by posing as a buyer and proposing car payments be made over time. The "buyer" may take possession of the car and make an initial payment or two, but then stop. When you're the seller, your options for getting the rest of your money are limited. Don't ever agree to a payment plan when you're selling a car.

Personal Checks or Cashier's Checks

Be careful about accepting a personal check or cashier's check as payment for a car. 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.

What to Do if You Are a Victim of an Auto Scam

If you've been victimized by an online car-buying or car-selling scam, consider taking these six steps:

  1. Contact your state attorney general's office and your local Better Business Bureau.
  2. File a complaint with the FBI's Internet Crime Complaint Center and the National Consumer League's fraud center.
  3. Report the fraud to the Federal Trade Commission.
  4. If the fraud involved a wire transfer, reach out to the company or financial institution that handled the transfer.
  5. If you provided personal information to a scammer, think about changing relevant usernames or passwords.
  6. Be sure to monitor your credit reports for any suspicious activity tied to identity theft.

The Bottom Line

Whether you're buying a car online or at a dealership, having good credit can help you obtain great terms on your auto loan. Your credit reports from all three consumer credit bureaus are available through And you can get your free Experian credit report and review your FICO® Score for free to see where your credit stands. If possible, take the time to improve your credit before applying for a loan to potentially save a lot in interest charges.