Car buying is no longer limited to visiting a local car dealership or perusing the "for sale by owner" ads in the paper. Learning about buying and selling cars online may enable you to find some rare deals that are just a few states away. However, there are some risks associated with this kind of transaction. Read on and learn more about online car transactions, which tips and tricks can make the difference for a good or bad experience, and how to ensure that you are not losing money on the deal.
Inventory
Buying and selling cars online started out as a venue for collector cars that were hard to find locally, and for which prospective buyers would be willing to cross several state lines to drive or tow them home. Since then, the market has opened up to cars and trucks of any make and model, and it is not unusual to see Corvettes listed next to a Camry. Used and new cars are for sale, just like there are cars which are no longer running but are sold for parts.
Sites Associated With Buying and Selling Cars Online
The most famous site for buying and selling cars online is eBay Motors (a link is posted in the Resources section). This part of eBay works much like the regular auction site, and with the click of the mouse you may bid on any car you choose--if you are able and willing to pay. The Auto Trader website is a listing service that allows interested parties to list their vehicles online and in a magazine. There is no bidding associated with the transactions. If you want the car, make the deal.
Doing Your Homework as a Buyer
Narrow down your search to the kinds of vehicles you are interested in buying online. Shop around locally to find out what similar cars are selling for. Check the car value with trusted online sites, such as Kelley Blue Book or the somewhat more accurate Edmunds True Market Value (a link is posted in the Resources section). Estimate your travel costs. Add these travel costs to the market value of the car you are buying--this is the actual amount of money you will spend. Determine if any deals you are looking at online really fall below the pricing guide or are right on--to make the bid, trip and transaction worth your while--or if it is cheaper to stay local and buy the car you want from a dealer or private party. Whenever possible, do business with a seller who has a verifiable, positive track record for buying and selling cars online.
Doing Your Homework as a Seller
Price your car accurately by using Edmunds or another pricing tool. Estimate how much money you need to make to turn a profit. This is especially important if you bought the car you want to sell online at auction and had to do some repair work. Represent the car as accurately as possible. If it has dings and dents, list them. Do not risk a bad auction feedback or civil action against you for misrepresenting the car. Run a CARFAX report to protect yourself from selling a stolen car or one that was previously salvaged.
Caution for Buyers
Remember that you are doing business with someone you do not know and, if you are buying a car, you are virtually buying it sight unseen and without a test drive. Request from the seller a CARFAX (a link is posted in the Resources section) report that clearly shows the car's vehicle ID number. Discuss terms under which you can withdraw your offer to buy the vehicle, without suffering any repercussions. Moreover, ask for up close photos via email that detail common problem areas, such as the underside of the car, the upholstery, and the sides of the car most commonly affected by parking lot dings and dents. After bidding, take a buddy with you to pick up the car. This protects you personally and also allows another set of eyes to look over the car before you accept the keys and drive off.
Caution for Sellers
Sellers have somewhat of an upper hand in this kind of transaction. When selling cars online, specify that you will not release the vehicle until the funds have cleared. You may agree with the buyer to turn over the car into the custody of a trusted third-party, such as the local sheriff or an impound lot.
If Something Goes Wrong
In the case of fraud, eBay Motors offers a vehicle purchase protection program that may reimburse a buyer up to $50,000 per car. This program protects you against paying for a car but fail to receive, buying a stolen car, or discovering that the car does not have a clean title. Buyers are limited to one claim against the vehicle purchase protection program for every six months.
Sellers and buyers who are doing business outside of the eBay Motors program have little other recourse than legal action against one another in case of fraud.
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