Fake Online Car Dealership Scams Are More Convincing Than People Think
For decades, the only way to buy a car was to physically go to a dealership. If the idea gives you a panic attack, you’re not alone, so it’s good to know that the industry has finally embraced online shopping – even Amazon has gotten in on the action , with around half of shoppers in one survey buying their car online.
But like everything else online, buying a car online comes with the risk of fraud. Fraudsters create entire fake online dealers and rob people of tens of thousands of dollars. You might think you’re too savvy to buy these things (who buys a $50,000 car unnoticed anyway?), but the risk is real. These fake online car dealership scams are quite sophisticated and can be difficult to detect—the situation has gotten so bad that some states, like Wisconsin, have issued official warnings about it .
How online car dealership scams work
At its core, the scam is quite simple: the scammer creates a fake dealership website. Sometimes it is a completely fictitious dealer, and sometimes scammers steal the name of a real dealership and create a fake website for it, often crawling the legitimate dealership website for graphics, text and photos to make everything look legitimate. Sometimes they claim to sell classic cars, but just as often they pretend to be regular dealers.
The second step is to adjust all car prices so that they are incredibly attractive to potential buyers. In the current economic climate, where cars – used and new – are mostly expensive, people who stumble upon a good deal are more likely to fall into the scammer’s sales funnel. The “dealer” will be very responsive to communications from brands and will provide everything you would expect from a legitimate car dealership, including photos and documentation. It can be extremely difficult to discern that you are not interacting with a real car dealership.
The scam really kicks in when it comes time to make a down payment or negotiate a sale. Fraudulent dealerships typically demand payment through unusual means—usually via bank transfer —and then stop responding once they receive your money. A North Carolina man lost $40,000 last year when he tried to buy a truck from a site claiming to sell “repossessed” vehicles at extremely low prices, and a California man lost $24,000 to a fake online dealer when he thought he was buying a classic car. And this guy on Reddit apparently lost $55,000 to a sophisticated fake online dealer.
What to look for
The scam works for several reasons: people are becoming more comfortable making large purchases online , the experience of buying a car in person is becoming terrible, and it is relatively easy to create a website that looks exactly like a real car dealership.
If you’re thinking about buying a car online, there are a few things you should pay attention to when choosing an online dealership:
-
Check with your state’s Department of Motor Vehicles or Department of Transportation to see if it maintains a list of authorized auto dealers in the state and if the dealership you’re considering is on that list.
-
If it is a local dealership, find the phone number yourself and contact them to make sure the website is legitimate.
-
Beware of unusually low prices, the inability to physically inspect and test the vehicle, and an unusual payment process.
Buying a car online is convenient and less stressful than buying a car in person, but it’s also a little more risky. A little extra due diligence can save you a lot of trouble.