Purchasing or selling a car online can be a huge convenience and time-saver.  At the same time, as online car sales grow in popularity on sites like Craigslist and eBay, so do scams.  Buying online can become a nightmare, with buyers reportedly losing thousands of dollars in fraudulent transactions. Fortunately, most scams are easy to identify by their various red flags. There are plenty of ways you can protect yourself as you go into a potential transaction. Here are a few rules of thumb to keep in mind when you’re looking to buy your next used car.


Start with the vehicle’s history.

This is something that should be hammered into any car buyer’s head.  Let’s say you find a car you’re interested in online. Get the pertinent information from the seller well before committing to making the purchase.  Honest sellers should be ready and willing to give you the vehicle’s mileage, vehicle identification number (VIN), and the car’s history.  Once you know the VIN, run a vehicle history report (through Carfax, AutoCheck, or Vehiclehistory.gov).  Does the information in the report match up with what the seller told you?  If it does, you’re off to a good start.  If it doesn’t, proceed with caution. It’s in your best interest to have another conversation with the seller. Point out any discrepancies and ask for clarification.


Check the title.

When you’re talking with the seller about the vehicle, one of the most important questions you need to ask is about the title.  Does the vehicle in question come with a clear title?  A salvage title?  No title at all?  Regardless of the answer, it isn’t something that should be taken at face value.  If you’ve already noticed a few red flags (perhaps the mileage was off, or there was an undisclosed collision in the vehicle’s history), a clear title may not be what is seems.  Typically, the vehicle history report will clear this up, but it’s always a good idea to inspect the title for yourself.  Remember: unless you’re especially car-savvy and willing to pressure the seller for highly specific details, your best bet is to hold out for a vehicle with a clear title. Anything else may be a disaster waiting to happen, one that could end up costing you a lot of money you weren’t planning to spend.


Making the transaction.

This is where things can get hairy.  First—and most importantly—never buy a vehicle (or anything else for that matter) using a wire transfer.  If at any point during the exchange the seller suggests a “wire transfer,” it is absolutely time to go.  Just walk away and put an end to your communication. Similarly, if the asking price of the vehicle is significantly below Kelly Blue Book value, you’ve found another red flag. This is a classic sign of a lemon that requires extensive (read: expensive) service. If you’re fairly confident that you’re not being scammed, confirm this with a trip to a mechanic you trust. Reasonable sellers will be happy to let you take the vehicle in for a comprehensive evaluation prior to sale.


Use common sense. 

One red flag often leads to another. Scammers only care about your money and will do whatever it takes to get it.  Ask questions, press for detailed answers and, when necessary, walk away. If you’ve identified a scam, alert the proper authorities so other buyers don’t get ripped off.


David Baldwin is a car insurance consultant working with Car Quotes Instant. He’s always on the lookout for ways to save consumers money on auto insurance.