Countless high school graduates are preparing for the next chapter of their lives in the coming months, whether entering the workforce, enrolling in college, or enlisting in the military. Regardless of their plans, most recent graduates require safe, reliable transportation, especially if they plan to move to an area with few mass transportation options. While some parents can provide a working vehicle to their children as a graduation gift, other young adults embrace their first opportunity to purchase a big-ticket item with varying confidence levels.
Purchasing a vehicle is not a task to be taken lightly and includes hours of research, thought and planning. With limited funds and a short timeframe, many young consumers turn to online marketplaces to search for and purchase a vehicle. Others enter a car dealership and find themselves unprepared to close the deal on their chosen vehicle. Unfamiliarity with financial terms, such as annual percentage rate (APR), compounding or simple interest and misunderstandings about required maintenance and costs further complicate the issue, causing frustration and disappointment.
In addition to these challenges, some may interact with a car seller utilizing unethical practices. In 2022, Better Business Bureau received nearly 2,000 complaints regarding auto sales, renting and leasing businesses across Texas. Additionally, reports to BBB Scam Tracker describe consumers losing thousands of dollars to fraudulent online sellers, often with no way to recover the money sent.
In February 2023, one Texas resident lost over $23,000 when they attempted to purchase a vehicle online. After emailing the supposed owner of the car, the victim was told a transport company in North Dakota would provide the information needed to make a wire transfer to purchase the car. Once the money was provided, the buyer was told the vehicle would arrive within a week – but it was never delivered. Neither the supposed owner nor the transport company would respond to any emails or calls. “I thought I did all my homework, and it looked good,” the consumer reported. “If I had checked BBB and the bank, I would never have sent the money. The car is still for sale on the website.”
To avoid unethical business practices and scams when purchasing a vehicle, whether at a dealership or online, BBB recommends following these guidelines:
Set a budget. Before finding the perfect car, it is essential to establish an ideal budget. You will also want to factor in monthly vehicle expenses, including insurance payments, fuel, parking, and routine maintenance or repairs. A clearly defined budget will make choosing a car, negotiating with a dealer, and getting a loan easier.
Do thorough research. Once you have narrowed your search, compare models you are interested in, keeping a close eye on safety ratings, owner reviews and warranties. Visit manufacturer websites for detailed images of each car and research mile-per-gallon (MPG) statistics, interior options, cargo space, towing capacity, and more. The more time you spend on these initial steps, the more comfortable you will feel when purchasing.
Shop for a deal. These may include cash-back deals, rebates, low-interest financing options, or incentives for recent graduates, military veterans, Uber and Lyft drivers, or first responders. In addition, many dealers are willing to make price cuts on the previous year’s models or any model that did not sell as well as expected. Purchasing one of these surplus vehicles can mean extra incentives from the dealer.
Speak with internet sales managers. When you find a car you want, it is time to contact an internet sales manager. During your initial conversations, focus on what car you want, whether they have it in stock or can get it, and how much the price is. If you are considering purchasing a certified pre-owned vehicle, now is the time to request a copy of the vehicle history report.
Test drive the vehicle. You should always take a test drive before you sign the final paperwork. There is no substitute for seeing a car in person, looking under the hood, sitting in the driver’s seat, and ensuring the engine runs smoothly. To do so, you may need to travel to the dealer’s place of business. Some dealers offer the ability to test drive upon delivery, and if anything isn’t as expected, you may be able to cancel the sale.
Complete the sale at the dealer or upon delivery. It is still usually necessary to sign the final paperwork in person. If you would rather avoid visiting the dealership, ask about delivery. Some dealers will drop off the car at your home or business and allow you to sign upon delivery.
Avoid Online Car Sales Scams
There are many pros to buying a car online, but caution is also needed. Anytime you shop online, and especially when making an expensive purchase like a car, you should keep the following tips in mind:
- Watch out for too-good-to-be-true deals. They are most likely a scam. Scammers often steal consumers’ personal information and money by offering them high-value goods at highly discounted prices.
- Never wire funds or complete bank-to-bank transactions. Scammers love this kind of transaction because there is no way to get your money back once completed. Instead, make legitimate purchases by check or credit card.
- Contact the seller by phone. During your negotiations, speak with the sales manager on the phone. If they are unusually vague about specific details of the sale or cannot confirm their location or the vehicle’s location, it’s most likely a scam.
- See the car first. Only buy a vehicle after an in-person inspection and taking a test drive first.
- Don’t give in to pressure. Scammers often pressure you to give up your personal information or make a down payment before you have time to consider the purchase. Take your time and think a deal over before agreeing to anything.
- Don’t trust a seller or buyer who says that eBay, PayPal, Craigslist, or another online marketplace guarantees the transaction. These sites explicitly explain they cannot guarantee that people using their services are legitimate.
See the BBB tips on buying a new or used car on BBB.org to learn more. You can also look up car dealerships to check their business rating and read customer reviews.
