Better Business Bureau guide to avoiding online car buying scams
What comes to mind when you think about buying a car? For many, it’s going dealer to dealer in search of the right one. Then, when you find the car you want, you spend hours in an office haggling. Given the stress often involved in buying a car, some dealers have figured out ways to make it easier for both the dealer and the customer. How? Move the buying process online.
Why Buy a Car Online?
One perk of purchasing a car online is that there is less emotion involved. It’s easier to stay detached when chatting with someone remotely. Also, any discussion you have about pricing or financing generally comes through email. This means you have everything in writing, and you can thoroughly review the terms without a salesperson nearby. And you can make a decision on your own time.
How to Buy a Car Online
If you’re considering buying a car online, BBB recommends the following tips:
Set a budget. It’s important to establish a budget before beginning the car search. You’ll want to factor in monthly expenses that come with owning a car including insurance payments, fuel, parking, and routine maintenance and repairs. A clearly defined budget makes the entire car buying process much easier.
Do thorough research. What size vehicle is needed? Fuel economy important? Will you trade off every few years? If so, what holds resale value best? Compare models while keeping a close eye on safety ratings, owner reviews, and warranties. Visit manufacturer websites to see detailed images of each car and research MPG statistics, interior options, cargo space, towing capacity, and more. The more time you spend on these initial steps, the better the final selection will be.
Shop for a deal. While you’re doing research, don’t forget to look for special deals. These may include cash-back deals, rebates, low-interest financing options, or incentives for recent graduates, military veterans, Uber and Lyft drivers, or first responders. In addition, many dealers are willing to make price cuts on previous year models or any model that did not sell as well as expected.
Prequalify for a loan. Prequalifying for a loan gives you a few advantages when approaching a dealer to make a purchase. You can set a reasonable price range that fits your budget. When approaching a dealer with a pre-approved loan, you give them a price limit that they will have to meet to make the sale. Of course, most car dealers offer their own in-house financing for consumers, but you can often get lower interest rates on loans from your bank or credit union.
Search dealers for inventory. Now that you have a specific make and model in mind and a pre-approved loan in hand, you’re ready to start shopping. You can do a search for the specific car, or you can browse a dealer’s inventory online to see what they have on hand. You can include out-of-town dealers, but they will likely charge higher fees for delivery. It is a good idea to start with a local search.
Take advantage of online showrooms to get a close look at the vehicle. Many online dealers feature dozens of photos from a variety of angles, so you can give each car a close inspection from the comfort of your own home. Compare multiple dealers and check each dealer’s business ratings on BBB.org before you reach out to them.
Speak with internet sales managers. When you find the right car and dealer, reach out to their internet sales manager. Focus on what car you want, whether they have it or can get it, and how much they will sell it for including tax, title and all fees. Give the sales manager the general price range that fits your budget.
Test drive the vehicle. You should always take a test drive before you sign the final paperwork. There is no substitute for seeing a car in person, looking under the hood, sitting in the driver’s seat, and making sure the engine runs smoothly. To do so, you may need to travel to the dealer’s place of business. Some dealers offer the ability to test drive upon delivery and if anything isn’t as expected you may cancel the sale. Take the route that works best for you, but never skip the test drive.
Complete the sale at the dealer or upon delivery. If everything checks out, decide how you will complete the sale. It’s still usually necessary to sign the final paperwork in person. If you’d rather avoid visiting the dealership, ask about delivery. Some dealers will drop off the car at your home or place of business and allow you to si
There are plenty of pros to buying a car online, but caution is needed as well. Anytime you shop online, and especially when making an expensive purchase like a car, you should keep the following tips in mind:
- Watch out for too good to be true deals. They are most likely a scam or they might be trying to sell non-disclosed flood damaged vehicles. Scammers often steal consumers’ personal information and money by offering them high-value goods at extremely discounted prices.
- Never wire funds or complete bank-to-bank transactions. Scammers love this kind of transaction because there’s no way for you to get your money back once it’s completed. Instead, make legitimate purchases by check or credit-card.
- Contact the seller by phone. At some point during your negotiations, speak with the sales manager on the phone. If they are unusually vague about certain details of the sale or cannot confirm their location or the vehicle location, it’s most likely a scam.
- See the car first. Never buy a car without making an in-person inspection and taking a test drive.
- Don’t give in to pressure. Scammers often try to pressure you into giving up your personal information or making a down payment before you have time to think about the purchase. Take your time and think a deal over before agreeing to anything. If you get a bad feeling, listen to your instincts.
- Don’t trust a seller or buyer who says that the transaction is guaranteed by eBay, PayPal, Craigslist, or another online marketplace. These sites explicitly explain they cannot guarantee people using their services are legitimate. Anyone who says otherwise is lying.
For More Information
About BBB: BBB serving Central Virginia serves Richmond, the Tri-Cities, Charlottesville, and Fredericksburg, as well as 42 surrounding counties from Fauquier to Mecklenburg and Northumberland to Amherst. The nonprofit organization was established in 1954 to advance responsible, honest, and ethical business practices and to promote customer confidence through self-regulation of business. Core services of BBB include business profiles, dispute resolution, truth-in advertising, scam warnings, consumer and business education, and charity review.