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Tips for Safely Selling a Car Online

As you probably know, the government's cash for clunkers program -- which provides rebates of $3,500 to $4,500 to people who trade in gas guzzlers for fuel-efficient cars -- has been so popular that it's running out of funding. Although the Senate majority leader said August 5 that the Senate would vote to provide another $2 billion for the program (the House already did), that doesn't mean you should get in line at your local dealership if you still have a clunker you want to unload. If you're car is worth more than the rebate, you may get a better deal selling it on your own.

If you take this route, be sure to protect yourself from fraud -- especially if you sell your car online. Follow these three tips:

Make personal contact. If you advertise a vehicle online, don't rely on e-mail to communicate with potential buyers. Many scammers (who might send you a fraudulent check) use e-mail because they are based overseas, says Keely Funkhouser, director of fraud prevention strategies at AutoTrader.com, the Internet's largest auto classifieds marketplace. If a buyer isn't willing to talk with you by phone, it's a red flag.

But don't get too personal. If the buyer wants to test drive the vehicle, meet at a public place -- not your home. Take someone with you and ask to see the buyer's license, Funkhouser says.

Make sure you get paid. Sounds simple, right? Of course you wouldn't hand over the title until you got a check. But Funkhouser says you shouldn't accept a personal check because it could bounce. It can take a bank up to two weeks to authenticate a check, so the buyer could be long go with your car before you realize his check was a dud. Ask for cash or meet at the buyer's bank to confirm that funds for the purchase are available. If the buyer lives in another state, you can use an escrow service, such as Escrow.com, to handle the transaction. Don't agree to accept a cashier's check that's over the amount of the purchase if the buyer asks to be refunded the difference -- it's a scam.

3 Tips for Safely Buying a Car Online

Here are 3 tips to help you avoid fraud when buying a car online.

Be suspicious of ridiculously low offers, particularly those connected to sob stories. Before buying a car, check KBB.com to find out what it's market value is. If someone claims he's selling a vehicle at a low price because he needs the money fast (he lost a job or is a soldier going overseas, for example), it's probably a scam, says Sid Kirchheimer, author of Scam-Proof Your Life: 377 Smart Ways to Protect You & Your Family from Ripoffs, Bogus Deals & Other Consumer Headaches.

Verify that the vehicle exists. Start by getting a phone number from the seller and calling him or her (don't rely solely on e-mail communication). Ask the seller to send you a copy of the vehicle registration and the VIN, which you can use to get a vehicle history report from CARFAX, Kirchheimer says. Don't rely on photos. See the vehicle personally or, if the seller is in another state, ask the seller to take it to a mechanic of your choosing, who can report back to you about the condition of the car, says Keely Funkouser, director of fraud prevention strategies at AutoTrader.com. You also can pay DataScan Field Services, the largest vehilce inspection company, to inspect the vehicle.

Mind your money and personal information. Do not give out your Social Security or credit-card number. When paying, don't send a personal check or wire money (a request to do so can be a scam). Funkhouser recommends paying by cash or making an arrangment with the seller to meet at a bank. If the seller is pushing you to use a particular escrow company to handle the transaction, be suspicious because it might be part of a scam. You can verify a company's legitimacy by checking with state regulators, Funkhouser says, or ask to use an escrow company or your choosing, such as Escrow.com. Most importantly, make sure the seller hands over the vehicle's title when you pay.

By Cameron Huddleston
Source: http://blog.kiplinger.com/kiptips/2009/ ... -a-ca.html & http://blog.kiplinger.com/kiptips/2009/ ... a-car.html

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