Buying a car in the modern world involves placing a great deal of trust in a complete stranger, something that by itself isn’t usually considered a good idea.
Whether you buy from a car dealership, a private seller, or on consignment, in person or online, when buying a car you need to know that the person you’re buying from – and the car itself – are honest and trustworthy. No one can predict the future, but you need to be reasonably sure the car doesn’t have any major problems and that you’re not about to get scammed.
We have all heard stories of scammers, thieves, and downright dishonest people getting involved in selling cars. I’m not here to scare you, and I also won’t tell you that it never happens, but rest assured that those chance encounters are a lot less common than you might think. It’s easy to protect yourself every step of the way, so today we’re going to talk about how.
The three main ways to buy a used car are:
As a buyer, there are many proactive ways to protect yourself from overpaying, getting scammed, or buying a lemon. Let’s start with the most common situation: a private party sale from somewhere like Facebook or Craigslist.
Let’s start with the most common scenario: a cash transaction between two complete strangers in a parking lot. This situation offers both parties the least amount of protection of any method on this list. We’re still talking about cars, right?
Private sellers tend to wear rose-colored glasses about their cars. This happens to all of us – your car becomes so familiar that its weaknesses start to fade from view. That scratch above the gas lid isn’t a big deal anymore, so the seller might inadvertently downplay it during the sale or forget to mention it at all.
And while no seller would mention the time they caught air over some railroad tracks or the coffee they spilled in the passenger’s seat a couple days ago, there’s a fine line between revealing too much and too little about a car’s past and current needs.
When buying a car from a private seller, the biggest risk is that you never know who – or what – is going to show up.
Thankfully, most private sellers are honest people. A private seller is uniquely capable of giving you important firsthand knowledge about their car’s maintenance history and overall condition. And they should know the car better than anyone else, because if not them, who would? Who else would know that the clutch started feeling worse about 2,000 miles ago? Only the car’s owner.
When buying a car from a private party seller, you’re hearing the stories directly from the horse’s mouth. And that horse probably owned the car for more than a few weeks and drove it for more than 10 miles, something car dealerships can’t often say.
And if you’re worried about getting scammed, there are some easy ways to help prevent that from happening.
In a private car sale, both parties have decided not to involve a dealership or consignment company. You have both taken the reins of your own destiny, trading extra time and effort for the old-fashioned comfort of dealing with someone face to face with a smile and a handshake. Or you did it to save money. Either way, you have a lot in common already.
While you might have a great connection on the surface, you’ll go right back to being complete strangers once the deal is done. That opens the door for scammers and deceivers to try their tricks. We’ll talk more about scam avoidance at the end of the article.
Here are four tips for buying a car from a private seller:
One last thing: take a test drive and don’t hold back. Respect the seller’s property, of course, but drive the car how you would if it was yours. Get permission from the seller to practice emergency braking and full-throttle acceleration – all within the car’s usual limits. If something breaks as a result, chances are it was already on its way out.
Ah yes, the dealership – a place so often associated with scamming and price gouging that car enthusiasts commonly call it the “stealership.”
Car dealerships pride themselves on their community reputation and the promise of a pre-purchase inspection. But while those factors might impart a sense of trust and security, there are many reasons to stay on your toes when buying a used car from a dealership. And since most dealers will sell a car without driving it more than a few miles, the question must be asked: how can you trust that you’re getting a good car?
If you think private sellers are bad about glossing over a car’s drawbacks, imagine buying from someone who doesn’t even know about them.
It’s a common misconception that conventional car dealerships source all their used inventory through local buying and trade-ins. But thanks to the internet, much of a dealer’s inventory comes from auctions and trades with other dealerships. That means your local car dealer is potentially several parties removed from having any meaningful knowledge of a car’s past and current needs.
A car dealership’s status as an established business might impart a sense of legal protection from buying a lemon, but that comfort can quickly disappear in a world of 30-day warranties and “as-is, no refunds” sales tactics. And of course, a car dealership’s express goal is to make money on every sale. That often means you’ll pay more when buying a car from a dealership. So, what do you get in return?
When it comes to paying more at a dealership, incentives like detailing services, home delivery, and pre-purchase inspections help sweeten the deal. And because they buy in bulk, car dealerships rarely pay full market value for a car. This allows them to sell used cars at a fair price while still making a buck.
Used car dealerships tend to have access to a wide selection of vehicles. By tapping into resources like dealer auctions, closed-door groups, and even the inventories of rival dealerships, they can find you any model, any color, and any year of whatever car you want.
Car dealerships offer convenience, ease, and safety by giving you a safe place to conduct business and a friendly staff to work with, unlike the dice-roll of buying a car from a private seller. And where a private seller can disappear after a scam attempt, legal protections like Lemon Laws can be called into play if a dealership tries to scam you.
Here are some ways to prepare for buying a used car from a dealership.
Do your homework. Like buying a car from a private seller, you should assume that the dealership might not know everything about the car in question. Research the car’s features, maintenance schedule, and common problems before talking to the dealership.
Get an independent pre-purchase inspection. No inspection can replace firsthand knowledge from a car’s longtime owner. And while the dealer might offer an in-house inspection, it’s best to get a second opinion from someone who doesn’t have a vested interest in selling you a car.
Make sure you’re protected. Ask about the dealership’s warranty program, what it covers, and how long it lasts. Be cautious of dealers that:
Car dealerships are usually trustworthy businesses – if they weren’t, they wouldn’t be around for long – but it’s still a great idea to prepare for the worst-case scenario. Check out the Scams and Scammers section below for more on proactive scam avoidance.
A consigned car is one that’s being sold through a middleman. The seller retains ownership while the consigner handles the sale. Consignment is a practice most often associated with high-dollar exotics and big-name companies like Bring a Trailer and Gateway Classic Cars, but the process is commonly used for every kind of car from Craigslist commuters to collectible trailer queens. You might find a consigned car at a local dealership or through an online resource like CarGurus or Autotrader.
From a buyer’s perspective, car consignment involves the same level of trust as a typical dealership. And just like dealerships, consigners stay in business by making money on the cars they sell. The difference is that consigners don’t actually own their own cars, so it’s extra important that consigners demonstrate honesty and trustworthiness right from the start.
Car consignment shops are in a unique situation: they have to please both buyer and seller in order to succeed. And while someone selling to a typical dealership might feel less compelled to tell the truth about their car’s drawbacks, the seller of a consigned car won’t get a sale by telling lies and half-truths. That means consigned cars are vetted twice: once by the consigner, and once by you, the buyer.
This leads to what I call the Circle of Trust:
The seller knows the facts -> The consigner learns the facts -> The buyer trusts the facts
This pattern encourages everyone to be honest with each other. It financially incentivizes the consignment company to only accept cars from sellers they can trust, because if a consigner delivers a lemon or the car isn’t as advertised it falls back on them. And it incentivizes the consignment company to be honest with the buyer for the same reason.
Consigners tend to roll out the red carpet when it comes to perks, offering high-quality photos, walk-around videos, and virtual test drives to help you get to know the car. They will spend as much time as necessary asking the seller questions on your behalf and can even arrange delivery and completion of DMV paperwork.
When buying a car on consignment, you will be communicating with the consigner instead of the seller. That means you should ask as many questions as needed to feel comfortable sealing the deal – especially if you can’t see the car in person before buying it. If you have the luxury of dealing with a consigner in person, treat it as you would a typical dealership experience.
Remember that you often have legal recourse should a consignment company try to scam you. In any case, don’t send payment for a consigned car until you have the deal in writing. Obtain proof of ownership and delivery arrangements before transferring funds, and take steps to vet the consignment company to ensure you’re dealing with a legitimate business and not some fly-by-night operation.
While each approach carries its own nuances, the methods of being scammed are largely the same whether you’re dealing with a private seller, car dealership, or car consignment company. The main ways you could be scammed while buying a car are:
It’s easy to avoid the first one: don’t hand over the money until you have the title. Even if the seller gave you their contact information or a scan of their driver’s license, it could all be fake. Settle for nothing less than the actual title before handing over your hard-earned cash.
How do you spot a bad title or a stolen car? Any form of this situation is rare, but most commonly the seller will try to give you an old version of the title when a newer version has been deemed Salvage, Junk, or Flood Damaged. In more extreme situations, the seller could fabricate a false title or switch a car’s VIN to sell a stolen car. Avoid these risks by requesting photos of the title and the physical VIN located on the car, then call your local DMV and ask them to verify that information before remitting payment.
Unless you’re a mechanic or car enthusiast, spotting a lemon can be hard to do by yourself. Take the power back by arranging a pre-purchase inspection through an independent shop. It’s critical to get this information from someone who doesn’t have a vested interest in selling the car to you. You can even coordinate an inspection when buying a car online.
If you’re in person, take a test drive. Get the seller’s permission to push the limits and don’t hold back. You shouldn’t be able to hurt a car with full-throttle acceleration or emergency braking maneuvers. If you do, take it as a sign that something was already going wrong before you arrived.
Follow these steps for buying a car and you’ll be prepared to avoid getting scammed or driving off in a lemon.
Exotic Car Trader offers a curated selection of high-end, exotic, and collectible vehicles on consignment. Our media-rich listings provide a transparent view of every car we sell. As a brick-and-mortar company with strong ties to South Florida car culture, we strive to set a high bar not only with the cars we offer, but with our entire experience.
Cover image credit: Roberto Nickson
Words by Justin Dake
We are not attorneys. This article does not contain legal advice.