Top 5 Car Scams While Buying or Selling

If you are in the market for a car or are looking to sell your used car, it’s important to be aware of common car scams so that you could protect your wallet. Most people think car scams only happen in sleazy salesman movies or sketchy Craigslist ads but the reality is, they are more common than you think. It is quite easy to fall victim to a car scam if you don’t know how to recognize it. Scams can occur on both sides of a car purchase, whether you are selling or buying. Here are 5 common car scams to look out for.

  • The Sleazy Salesman 

We’ve all heard of the sleazy car salesman stereotype. There are plenty of reliable and honest salespeople in the car industry, however there are a few red flags that you should look out for. The majority of salespeople work on commission. This means that their pay is directly correlated to selling the products. This results in some people becoming dishonest and forceful when selling a car. Be aware of car salesmen that are rushing you into making a speedy purchase. Common red flag lines include pressuring you into making a purchase by saying “someone else is interested in this vehicle”. Don’t let external pressure impact your decision and make sure to always fact check what the salesperson is saying with your own research.


  • So Called Deal Bundles 

Deal bundles are when the seller consolidates the vehicle sale with auto insurance and auto loans. This appears very attractive at first because it offers convenience of a “one stop shop.” However, purchasing your insurance and loans this way often costs you more in the long run. To get the best bang for your buck, research different organizations and compare rates on insurance and loan acquisition from other car sales dealerships or top online providers.

  • Quoting a Higher Price Based on Gender or Ethnicity 

Unfortunately, gender and race bias can often lead to overcharging the buyer. If you are a woman or person of color, it’s important to be careful about the quotes you are given. Compare your rates with those online or bring a male friend along to help circumvent this discrimination.


  • Yoyo Financing 

If you have a lower credit score, this tip could help save you money. Yoyo financing is when car buyers with lower credit are tricked into paying up to 5% more than they should. Buyers are normally informed that their financing has fallen through a few days after they have taken the vehicle. As a result, they finance at a higher rate. Avoid this sudden change of pricing and protect yourself.

  • Overseas Car Buyers Sending Payment Via Paypal 

If you are considering selling to an overseas buyer, watch out for this scam. Long distance scammers will often claim issues with a freight company and offer to pay a higher cost if you pay for the freight shipping. Selling over Paypal allows them to pocket the money. Avoid paying through Paypal if you can help it and meet buyers face to face whenever possible.


Purchasing or selling a car is a big financial moment in your life. It’s important to stay vigilant and protect yourself from potential scams.


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