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Private car purchase: is it worth the risk? Image by Mitsubishi.

Private car purchase: is it worth the risk?
Be careful out there if you're buying cars from a private seller.
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You have your eye on a great used car being sold by a private seller across town. It appears to be everything you want, but you are concerned the seller might be setting you up for a scam. Is it worth taking the risk to get that car you've been dreaming of? Maybe, but maybe not.

Scams involving private car purchases are on the rise, according to an April report published by The Express. That report listed six common private sale scams that car buyers need to watch out for. We will get to them in just a minute, but it is important first to consider why people purchase used cars privately. The number one reason is cost.

When you purchase a used car from a dealer, you pay a little more in order to cover the dealer's costs and profit. There is no way around it. Purchasing from a private seller tends to be more affordable because there are no extra costs.

Common Private Sale Scams

Moving on to the private sale scams listed by The Express, these are scams you do not want to fall victim to. You could end up facing a significant financial loss. In some cases, you could also be guilty of breaking the law. The scams are as follows:


  • Fake Deposit - Scammers have become very adept at stealing buyer deposits. They advertise a car for sale and then employ high-pressure sales tactics to collect as many cash deposits as they can within a short time. With money in hand, they simply disappear.

  • Rental Car Scam - This scam is virtually the same as the fake deposit scam except that the scammers will use a late model vehicle rented from a hire company. Using a new model vehicle enables them to collect larger deposits. When they have enough money, they just return the car and vanish.

  • Fake Escrow - The fake escrow scam involves the alleged sale of a vehicle currently located overseas. The vehicle cannot be released and shipped until the buyer pays in full. To alleviate concerns of fraud, the seller promises to put the money in escrow pending delivery. The problem is that there is no car. Furthermore, the escrow account is fake.

  • Sub-Hiring - With this scam, a person offers to sell a car despite the vehicle still having outstanding financing. The seller promises to continue making payments only to forgo doing so once he/she has the cash in hand.

  • Bank Fraud - There are some scammers who will sell a used car without telling the buyer about outstanding financing. The seller walks away with the money, leaving the buyer with a vehicle that will eventually be repossessed.

  • Vehicle Swap - This last scam is becoming increasingly common. It involves swapping one vehicle for another in what appears to give the buyer the better end of the deal. The problem is that the purchaser's new car is often stolen or still under finance.



It can be difficult to spot a scam, especially when being perpetrated by someone who is very experienced. So how do you protect yourself? Ask lots of questions, require documentation to prove vehicle ownership, be wary of prices that seem too good to be true and, above all, never leave a deposit on a vehicle. If you are risk averse when it comes to private car sales, you are better off purchasing a used car from a dealer.

Sources:

1. Used car selling - http://www.express.co.uk/life-style/cars/572714/The-6-most-frequent-used-car-selling-scams
2. Approved Used Car schemes - http://www.jenningsforddirect.co.uk/about-us/why-ford-direct/
3. Dangers of private sale - http://www.honestjohn.co.uk/buy_sell/buying_used/buying-used-privately/



Promoted article by Dale Gillespie - 25 May 2015


Scrappage scheme. Image by Ford.Scrappage scheme. Image by Ford.Scrappage scheme. Image by Hyundai.Scrappage scheme. Image by Newspress.Scrappage scheme. Image by Mitsubishi.

Scrappage scheme. Image by Mitsubishi.Scrappage scheme. Image by Mitsubishi.Scrappage scheme. Image by Mitsubishi.Scrappage scheme. Image by Hyundai.Scrappage scheme. Image by Hyundai.









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