Online auction sites like eBay and person-to-person community sales sites like Craigslist have expanded the private marketplace in several ways, widening the ability to both purchase and sell hundreds of products and services - including used cars. First introduced in the 1990s, these sites have become popular sources for finding deals on a huge variety of goods, including automobiles, furniture and collectible items.1,2 Using these sites, sellers can easily and affordably post their vehicles for sale. Excluding reserve auctions, where the buyer has set a minimum amount (or “reserve”) for which he’ll sell a vehicle, an online auction usually concludes after a period of bidding, with the product going to the highest bidder at the close of the auction. Many online sites also allow sellers to list items for sale with a “buy now” price as opposed to forcing them through a traditional auction.
Person-to-person community sales sites are typically straightforward, allowing sellers to list vehicles by uploading photos, a product description, and crucial product information for the benefit of shoppers. Below, we’ll discuss the feasibility of car shopping online from an auction site or a person-to-person sales site. Both options can allow a shopper to find a good deal on a used car, but before car shopping online from an auction or classified advertising site, there are a few things you should understand about the differences between buying a car online and buying from a dealership.
Evaluating vehicle quality remotely
The most crucial factor to online car buying is ensuring you find a vehicle that’s in good condition. A good car description will include ample detail about the vehicle’s history, operation, and current condition. The more information and detail, the better. The same is true for photos - a good vehicle listing will include several photos of both the interior and exterior of the vehicle, including close-up photos of the vehicle body, especially the wheel wells, where bubbled paint and rust are most likely to appear. If the listing has few photos or obscures view of certain portions of the vehicle (e.g., headlights, interior console, etc.), you may have cause to be suspicious. For a more complete list of factors to investigate while evaluating a used car, see our article here.
Assessing seller credibility
- Check out the seller’s rating (if available). For most online auction sites, sellers have ratings and reviews based on their previous customers’ experiences and satisfaction. Be sure to examine this rating and read several reviews to verify a seller’s credibility. A record of satisfactory vehicle purchases can validate trustworthiness. A seller with a low rating or several negative reviews should probably be avoided.
- Speak to the seller by phone. A phone conversation can help remove some of the anonymity from online car buying. Reputable sellers should be willing to discuss the vehicle over the phone.
- Confirm the information in the ad. When speaking to the seller, ask several questions to verify the ad’s description of the vehicle and have the seller fill in any gaps in the description.
The online auction process
An online auction typically centers on a bidding period. This period can last anywhere from a few hours to a few days or even weeks. A relatively straightforward interaction, online bidding lets users bid on vehicles by entering bid amounts into the interface. Users are notified if they currently have the highest bid, or informed of where the highest bid currently stands at a given moment in the bidding.
Most online bidding sites let you enter your highest bid amount and allow the site to increase your bid to the winning bid based on the bids of other buyers, with the site halting your bidding once you’ve reached your maximum. Be careful what amounts you enter when bidding - a bid can only be retracted if made several hours in advance of the auction’s end; in most auctions, a bid represents an agreement that you will purchase the vehicle if your bid wins the auction.3 If, at the end of the bidding, you have the highest bid, you have agreed to purchase the vehicle and can proceed with completing the transaction.
When you sign up for an account on an online auction site, you will likely have to enter payment information for any purchases you make, guaranteeing your ability to pay for the items you bid on. For purchases larger than a certain amount ($10,000 or $15,000, for example), you may be asked to provide a verified credit card prior to purchase.
While many buyers want to utilize online auctions to get a good deal on a vehicle, they sometimes feel hesitant about exchanging money online, especially with a seller they have not met. This is understandable, as sometimes fraud does occur. To reassure potential buyers, prominent car buying websites offer Vehicle Purchase Protection plans that safeguard against egregious vehicle fraud. If you purchase a vehicle that is seriously defective, stolen, or simply is not delivered, the online auction site may reimburse you. Simply contact the site’s quality control department and follow the appropriate steps for reporting a vehicle you received that is not as described. Vehicle Protection Plans include ample detail on site policies and the necessary conditions of a reimbursement, so these should be reviewed in detail so you understand these requirements.4
How to avoid online auction scams
Unfortunately, person-to-person sales sites and online auctions have provided scammers an opportunity to commit fraud on unsuspecting consumers. Fraud, scams, and other forms of malfeasance are certainly not unique to online car buying - the auto sales market has always experienced forms of fraud and deception concerning vehicle quality.5 With online car shopping, however, buyers should be aware of specific methods scammers use to deceive. When shopping on auction sites or person-to-person sales sites, be suspicious of the following:
- If a seller will not allow you to see or test drive the vehicle, do not proceed with any sales discussion. Only proceed with purchasing once you’ve test driven the vehicle.
- A car priced well below market value.
- Few pictures, no pictures, or stock images. If the seller simply lists a description of the vehicle without pictures, the vehicle may have physical defects. If the description seems earnestly written, you can email the seller asking for photos. If the seller posts industry photos, dealership photos or photos too general to be his actual vehicle, a similar likelihood exists that they vehicle is damaged.
- The seller attempts to obtain money from you in any way without you seeing the vehicle or meeting the seller in person. Never transfer money to someone you’ve never met, no matter a seller’s reasoning.
- Cars marketed “as-is.” A car marketed as being sold “as-is” may not necessarily be deficient and the ad may not be fraudulent. However, you should be wary of the car’s condition. The car probably has some kind of problem that the ad should clearly state and describe. Sometimes, a seller may want to sell a slightly defective vehicle because he does not have time to repair it but thinks someone else may be interested in doing so.6
- The seller will not allow you to inspect the title. If anything seems suspicious, it is a good idea to ask to see the seller’s ID and match it to the vehicle title. If he says he’s selling the vehicle for someone else, you may want to walk away from the transaction.
To protect against scams and fraud, be sure to meet your seller in a public place and consider bringing a friend. Never exchange money without meeting a seller in person and testing the automobile. For the best assurance against purchasing a faulty car from a private seller, have the vehicle inspected by a trusted mechanic. Finally, carefully read an individual site’s documentation on avoiding fraud and its user protection policy to understand unique concerns with individual sites.
How do I get my car?
There are a variety of ways to get a car you’ve purchased online. Read on to find out more about how this can be done.
The easiest and usually most affordable way to obtain your vehicle is by simply retrieving it yourself. If you have purchased a vehicle in your local area, this retrieval should be relatively simple. Many buyers, however, rely on Internet resources to search a wide geographical area for niche or classic cars, whose sellers may live a fair distance from the buyer. These situations pose certain difficulties for buyers forced to travel to pick up their purchase.
Even for automobile purchases where the seller lives one or two-hundred miles away, the preferable way to retrieve the vehicle will probably be to drive to its location with a friend who can drive your vehicle home while you drive the purchased vehicle. Using trusted trip-calculating tools like AAA’s, you can get a good estimate for how much travel costs will run when driving long distances (calculator does not include expenses for hotels, food, etc.).7 Every trip for these scenarios is unique, so be sure to calculate other trip types to your desired location. It may be that a one-way flight to certain destinations and driving the car back could cost less.
If picking the car up is not an option, there are also a number of services that allow you to ship your vehicle after the sale. On certain auction sites, sellers can include shipping costs for their vehicles. This practice is particularly common to dealerships, but private sellers can also list optional shipping services, which can be selected for an added cost.8
If shipping services are not included in an online auction’s listing, you will likely have to investigate shipping sources on your own. For this, you can either contact vehicle shipping services directly, or enlist a broker who deals with multiple shipping agencies to facilitate the shipment. Both options can be very costly, especially given a lengthy shipping distance and sizable vehicle, and should probably be treated as a last resort to obtaining your vehicle.