Buying a used car is challenging, given the array of potential hidden problems and concerns about whether you can trust the seller. Add to that a widespread scam that can be costly for shoppers who search for used cars being sold online by private sellers. Scam: The “seller” might not actually own the car. This scam has become so widespread that the FBI includes it among the most common fraud schemes

How it works: The scammers typically repost pictures of cars they find for sale online but modify details in the descriptions and set tantalizingly low prices. They might explain that the price is so low because they need a quick sale, perhaps because they are moving, divorcing or being deployed overseas by the military. The extra-low price is meant to tempt buyers, especially those who aren’t local, to agree to buy the car before seeing it in person. 

To protect yourself when buying a used car online…

Research the seller. Enter the seller’s name, location and any other information into a search engine. You might turn up court records or newspaper articles about prior arrests or business dealings. If he/she is legit, you might turn up LinkedIn pages or other evidence of an honest career. Be wary of sellers who won’t share their names and/or phone numbers.

Get the car inspected by an ASE-Certified Mechanic near where the car is located (ASE.com/Landing-Pages/Car-Owners.aspx). The mechanic can spot problems and confirm that the car really exists. If the seller won’t allow an inspection or won’t take the time to bring the car to the mechanic you select, don’t buy the car.

Check the car’s title. Before handing over money, confirm that the name on the title is the name that the seller provided earlier. If the seller can’t produce a title…the title lists a different name…and/or the title looks like a photocopy, back out of the deal. A legitimate title will have hard-to-copy details such as watermarks or intricate “microlines” in the paper, though this varies by state. Also enter the car’s vehicle identification number (VIN) into the National Insurance Crime Bureau website to confirm the car has not been reported as stolen.

Deposit your money into an escrow account when buying a car from afar. Your money should remain in escrow until you receive the car and its title and confirm that everything is as described. Warning: Set up this escrow account at a bank or escrow service of your choosing.