Avoiding Car Sale Scams: A Guide to Selling Cars Online Safely

Buying or selling a car online can be a convenient way to access used car sales or find the right buyer. But like any marketplace, online car sales come with risks. Scammers are always on the lookout for unsuspecting sellers and buyers, using tactics designed to steal money, personal information, or even vehicles.

If you’re exploring your options for buying a car online, contact us through our new car buying page for expert advice and the most competitive price available. 

This guide will walk you through the most common scams you might encounter when buying or selling a car. We’ll cover how these scams work, the red flags to watch for, and how to protect yourself. If you’re buying a car online or selling a car online, understanding these risks will help you keep your wits and avoid falling victim to the oldest trick in the book.

Fake Listings with Unrealistically Low Prices

How This Scam Works

A common scam involves fake listings for cars that appear on genuine car sales websites. The scammer will advertise a car online at an unusually low price to attract potential buyers. Often, they’ll claim they need to sell the car quickly because they’re "relocating" or "working with the defence force." Once they’ve gained a buyer’s interest, they’ll request payment via wire transfer, PayPal, or even PayID.

The scammer may send so-called ‘spoof emails’ that look official, claiming the payment needs to be made via a third-party business like carguidemoving.com.au. However, after the payment is sent, the scammer disappears without delivering the car.

How to Avoid It

• Always see the car in person. Ask the seller for a test drive and inspect the car thoroughly.
• Don’t trust sellers who request payment upfront. Avoid unusual payment methods like wire transfer or PayID without verification.
• If the price is unusually low, be cautious. Cars advertised well below market value are often bait for scams.

Overpayment Scams Targeting Sellers

How This Scam Works

If you’re selling a car online, you may encounter a "buyer" who claims to have accidentally overpaid for the vehicle. They’ll ask you to refund the difference, often before the bank transfer clears. By the time you realise the payment was fraudulent, you’ve already sent the scammer your own money.

Fake buyers often use this tactic, sending so-called ‘spoof emails’ pretending to be from a payment service like PayPal or PayID, making it look like the payment has been processed.

How to Avoid It

• Wait for payments to clear. Do not refund money until you’ve verified the funds are available in your account.
• Watch for unusual payment methods. Be wary of payments that seem too complex, especially if they involve third-party businesses.
• Report scams to consumer protection authorities. Websites like Scamwatch and the Consumer Protection Commissioner in Australia offer advice and assistance.

"Held in Storage" Car Sales Scam

How This Scam Works

This scam usually involves interstate or overseas sellers claiming their car is being stored with a third-party shipping company. They’ll tell the buyer they must pay the full cost of the vehicle upfront to have it "released." These sellers never actually own the car. They just want you to send money and disappear without a trace.

How to Avoid It

• Insist on inspecting the car. If the seller refuses, it’s a red flag.
• Don’t pay for cars you haven’t seen. Meet the seller in a public place for safety.
• Use secure platforms for online car sales. Services like Carsauce.com/buy help avoid fraudulent listings for cars.

Title Washing and Odometer Fraud

How This Scam Works

Scammers often sell cars that have been previously written off or stolen but “wash” the title to make it look legitimate. They may also tamper with the odometer to lower the number of kilometres, making the car seem newer than it is.

How to Avoid It

• Check the Personal Property Securities Register (PPSR). It will show if the car has been written off, stolen, or still under finance.
• Verify the odometer reading. Ask for a vehicle history report to check the car’s mileage.
• Inspect the car carefully. Look for signs of tampering on the odometer.

Fake Escrow Services

How This Scam Works

A scammer will suggest using an escrow service to make the payment process "safer." They’ll direct you to a fraudulent escrow website that looks official. The buyer or seller then transfers the funds, only to realise the escrow service is fake.

How to Avoid It

• Use only reputable escrow services. Avoid third-party services recommended by the buyer or seller.
• Don’t follow email or text links. Instead, visit the official website directly.
• Double-check escrow service reviews. Scammers often use fake websites with convincing names.

Payment Redirection Scams

How This Scam Works

You might receive an email or text from a "buyer" or "seller" claiming they’ve changed their payment details. They’ll ask you to send funds to a different bank account or payment service. This scam is often executed using fraudulent software or email spoofing.

How to Avoid It

• Verify any change in payment details. Call the person using a known phone number.
• Approach in-person meetings with caution. Bring a friend or family member with you.
• Report scams to Scamwatch. If you spot suspicious activity, report it immediately.

"Friend or Family Member" Scams

How This Scam Works

In this scam, the scammer claims they are selling the car for a family member. They use emotional excuses to make you feel sympathy. Sometimes, they’ll claim the family member is in the defence force or working overseas and can’t handle the transaction themselves.

How to Avoid It

• Deal only with the car's owner. If they say it’s for a "family member," it’s a red flag.
• Check the seller’s identification. Make sure it matches the name on the registration.
• Insist on inspecting the car in person. If they refuse, walk away.

Final Thoughts

Buying or selling a car online doesn’t have to be risky if you remain vigilant and aware of common scams. Scammers often use urgency, confusion, and fraudulent software to exploit potential buyers and sellers. But by recognising the red flags and taking action, you’ll be better equipped to protect yourself.

One of the safe ways to stay safe is to buy through us! If you are ready to make a purchase, contact us through our new car buying page.

Take your time, do your due diligence, and never rush into a deal. By staying cautious and aware, you can avoid falling victim to online car sales scams and ensure your next vehicle purchase or sale goes smoothly.