Car salesmen have a pretty greasy reputation. Even regular people selling their own cars show a tendency toward sketchiness. The Internet, too, is a rather seedy place. So when you go to buy, or even sell, a car online, you’re treading on some fairly shady grounds. Not to mention you’re about to spend a vast amount of money on something that – statistically speaking – is quite dangerous. So how do you wade through all this darkness and find a decent car from a trustworthy source for a reasonable price?
Well, it always helps to know a thing or two about cars, but we’ll just assume you don’t, to make things more interesting. Beyond that, it helps to know a thing or two about safe shopping online, which is where I think we can help.
As far as I can see, you have two options: you can buy a car from a company in the business of selling cars, or you can buy a car from some guy who posted some pics of his car on Craigslist. The same goes for selling.
If you’re going to buy a car from a company like Carmax, who has quite aggressively moved their business online, or Cars.com or AutoTrader, then you are making a reasonably safe bet (especially if you’re in the market for a new car). As far as I know, these companies buy up used cars, too, fix what needs to be fixed, and sell them for a slightly marked-up price. On a site like Craigslist or eBay, you’re taking more of a risk, but you’re also likely to find a better deal.
So, let’s begin with the reputable business, because it’s easier. If you’re set on buying a car from, or even selling a car to, an online business, there isn’t really a whole lot to worry about. You browse their website, find a car you like, and decide you want to buy it. From there, you go to wherever the car is (or wherever it has been shipped to) and you test drive it. All the transactions – whether you are buying or selling – are probably going to take place on that car lot.
This is actually sort of important: conducting a transaction in real life (as opposed to online) doesn’t necessarily mean the transaction is secure (think Target data breach and point-of-sale attacks). Give the place the eye test. If it looks super sleazy, that’s probably because it is super sleazy. And you never want to swipe your credit card at a business that is super sleazy.
Of course, most of us aren’t going to be buying a car with cash, so we’re probably going to have to take out a loan. This is the part where you really want to be smart. I can’t keep you from buying a terrible car (though I hear a Carfax report could help), but I can try to keep you from taking out a terrible loan. I won’t recommend anyone specifically, but whatever the source is of the loan you’re about to sign on to, cross check them with the Better Business Bureau.
In fact, you should probably go ahead and run that dealership by the Better Business Bureau, as well (this won’t help you outside the U.S., but I am sure there is some consumer protection agency in whatever country you live in, too). Depending on your credit, you’ll end up paying an interest-rate of somewhere between five and 15 percent (give or take a few points). If you’re being asked to pay more than 20 percent, then you either have truly terrible credit or you are getting scammed.
The more interesting transactions are those that take place on sites like Craigslist or eBay. On the selling end, how do you know a buyer isn’t planning on stealing your car? On the buying end, how do you know the seller isn’t trying to steal your money? On both ends, how do you know this strange person you met on the Internet and are about to meet in real life isn’t trying to murder you? You don’t, although I admit that last piece is a bit hyperbolic.
Don’t give away personal information to these people. Be careful when clicking links in the ads or in emails they send, because they could contain malware. In the past, we’ve recommended setting up throwaway email accounts for one reason or another. This may be a good time for that. In fact, you may want to read through this article on taking a holistic approach to online security, just to get your head in the right place.
Never give a seller money over the internet until you’ve driven the car you’re about to buy. And never give that person money until you actually have the car. I’m not telling you to do a handshake trade – you hand this person the money while he or she hands you the keys – but at least be near the car when the transaction goes down.
Which brings me to my next point, you should never meet a buyer or seller at your home or their home. Meet in a nice public place, for reasons that probably go without saying. Might be a good idea to bring a friend along, too.
It also might be the case that you’ll use a money transfer service like PayPal to conduct a transaction. This is nice because you can meet-up, discuss terms, and then wire the money on your mobile device. Of course, you’ll want to make sure you are transferring money online securely. You’ll also want to make sure – particularly if you’re selling – that the money ended up in your bank account before you let someone drive off with your car.
There is actually a pretty good article about safe online car buying over on eBay, which makes a lot of the points made here but is more focused on the car buying part and less focused on the online part. It’s also pretty focused on buying cars on eBay, but at the very least, reading both articles will really help drive (pun intended) these points home.
Beyond these, just follow the old adage that if a deal seems too good to be true then it probably is too good to be true. A ten year old car probably doesn’t have 15,000 miles on it. A brand new luxury vehicle will probably cost more than $5,000 (unless something catastrophic has happened to it).