Just the other day a friend of mine found a great deal on a BMW on eBay. I knew that eBay did sell cars at eBay Motors. But never really gave it any thought to actually go place a bid on a car. I’m more accustomed to being able to see, feel, smell and touch a car before I purchase it. I especially like to give it a test drive, you know to make sure everything sounds and feels good.

I recently found an article about how to buy a car on eBay. You should read it before you go placing bids and winning cars on eBay. It will opened your eyes to things to look out for and also what you should do before and after buying a car on eBay.

Here is the article:

When Colleen Rainone, a Connecticut mother of four, decided to replace her Town and Country minivan with a newer model, she headed to her local dealer. She outlined the features she wanted — low mileage and all-wheel drive among them — and named her price: $17,900.

No way, the dealer said.

Then, Rainone signed on to eBay Motors. She found the exact make and model listed by a dealer near her in-laws on Long Island. The minivan had all the features on her wish list and a Buy It Now price of $17,900. One week later, she bought the minivan.

It’s the third car Rainone has bought on eBay in four years as a registered user. She first helped her mother buy a similar minivan a couple of years ago, snagging it for $6,000 under Blue Book price. She and her husband also recently bought a Ford Taurus.

She’s among hundreds of thousands of people who buy cars online each year. Some 450,000 cars traded hands on eBay last year, says spokesman Hani Durzy. He estimates eBay Motors will do $9.8 billion in sales this year. And plenty of people use classified ads and other auction sites, scouring them for great deals.

But how many of those transactions end as happily as Rainones? And what, exactly, do you need to know to buy a car in cyberspace? Here are the tips from auction experts.

Is it safe to buy a car on eBay?
Yes. And no. Not everyone is as lucky as Rainone. Problems with online auctions continue to top the Federal Trade Commissions list of Internet fraud complaints. Durzy says that only one one-hundredth of 1% of eBay transactions results in confirmed cases of fraud. But if you’re part of that tiny fraction, it stings — especially when you’re shelling out big bucks.

Here are some key ways to improve your odds for a safe eBay car purchase.

• Scrutinize the sellers feedback rating - You should learn as much as you can about your seller, Durzy says. EBay sellers live and die by their feedback ratings. Beyond the numerical rating, read the comments left by other buyers and click on the links to see the merchandise that the sellers rating is based on. Sometimes people will sell low-dollar value items to build their feedback rating, warns FTC staff attorney Debbie Matties. And then they turn around and (list) high-dollar-value items and never send them.
• Check the cars history -Rainone did some homework to make sure the car was accurately represented and wouldn’t likely fall apart. In her case, the dealer provided a Carfax report, which lists any previous accidents or odometer fraud and maintenance history. Anyone with the vehicle identification number (VIN), which all listings should include, can order these reports online for $20. (If you plan to look at more than one car, it pays to shell out $25 for unlimited Carfax reports.) Rainone also bought from a dealer that was within a reasonable distance from her home so her husband could check the vehicle out in person and test-drive it.
• Get it all in writing - Make sure anything you’ve been promised is in writing and never rely on oral agreements, Matties says. Have the seller fax a copy of the title and any maintenance records, she recommends.
• Read the eBay listing’s fine print - Most cars are sold as is, Durzy says. The fine print is where you’re likely to find declarations of any dents and dings and the terms of the sale, including things like who pays for an escrow service fee or what types of payments the seller will accept. Knowing these details before you bid is critical, because bids are considered binding contracts on eBay. Translation: You bid, you win, you pay.
• Have the car inspected - Not close enough to drive it to your neighborhood mechanic? Then pay a third party to do it for you. EBay recommends SGS Automotive Services of Cincinnati, which offers service throughout the United States. Inspections for most cars cost $99.50, but the peace of mind is, well, priceless.
• Don’t pay in cash - This means no money orders, no Western Union, no personal checks. Some private sellers may balk at other types of payment, but plenty of others will accept PayPal or even credit cards. Dealers are likely to accept these safer payment methods. Matties recommends using a credit card that offers extra protection against fraud. How you pay is really the most important thing, she says. Especially for such large dollar transactions, paying with cash is a huge risk.” You’ll have to have a card on file with eBay anyway, if you’re planning to buy a car worth more than $15,000. (For more, read “How to dispute a credit card purchase.” )
• Use a reputable escrow company - A good, legitimate escrow company will act as a go-between for buyer and seller, ensuring the merchandise lives up to its description and that the funds have come through before passing either along to buyer or seller. This protects both parties. Beware: Fake escrow sites are popping up faster than they can be shut down. A bogus site will take your money without delivering the goods; it probably never had them to begin with. And they’re hard to spot: sleek design and bogus security logos (such as the TrustE logo) make them look legitimate.If you just do a general Internet search for an escrow company, the majority are going to be fly-by-night Internet companies, Matties says. Always check a company out with the Better Business Bureau, but do not consider a lack of complaints a seal of approval. One safe bet? Escrow.com, a well-established company recommended by eBay. (For additional tips on how to spot bogus escrow sites, along with a list of suspicious sites to avoid, visit Carbuyingtips.com’s fraud page.)
• Check that VIN - When your vehicle arrives, be sure to check that the VIN matches the one on the eBay listing, Matties says. Otherwise, all your homework and Carfax reports will have been for naught.

What are the hidden costs?
Certainly you can find great deals on cars, as Rainone has done. But downright amazing deals should probably arouse your suspicion; they fall under the usual if its too good to be true caveat.

And when it comes to adding up the costs of a car, consider:

• Travel and shipping - Unless you’re buying from someone nearby, you’re likely to incur some extra expenses: either shipping costs or airplane tickets so you can pick up the car in person. Cross-country delivery can cost around $1,000.
• Title, registration, taxes - You’ll also want to check with your local DMV on these costs.
• Check the fine print - Things like dealer fees may not be included in the listing price. One co-worker was surprised to learn he owed a couple of hundred bucks on top of the winning bid price. Durzy says any such fees should be declared in the listing.

Knowing all these costs upfront can help you evaluate whether your winning bid would really be a good deal compared to your local dealer.

Tips for a smooth deal
Provided you’ve already taken the safety measures of checking seller feedback and of researching the car and the associated costs, what else can you do to ease the bidding process?

• Use the Web to narrow your search
  You’ll have an easier time focusing your energy if you come to eBay with a short list of cars you’re interested in. Important considerations include fuel efficiency and reliability ratings. You can find both at sites such as MSN Autos, Cars.com and Edmunds.com.
• Know your price limit
  Have a top price in mind and be prepared to walk away. Using automated bidding can help you here. Once you’ve set your highest price, eBay will continue to make bids for you until you hit your target.
• Be wary of vague listings
  The best sellers will be very, very thorough in their descriptions, Durzy says.
• Don’t bid unless you really, really mean it
  Say it three times: Bids are binding. Bids are binding. Bids are binding.
• Know what the cars worth
  Do not be blinded by the pretty pictures. Do the legwork at sites like MSN Autos, Kelley Blue Book and Edmunds.com to assess what similar cars are going for. Durzy also recommends looking at completed listings on eBay so you know what the car has recently sold for on the site.
• Get financing in advance
  Theres nothing like winning an auction only to realize you need to scrape together several thousand dollars in a hurry. Having your financing worked out ahead will help you make the best financial decision when the pressure is off. It will also alert you to whether you can really afford the car you want if you cant qualify for a loan. (You can check for loan rates on MSN Money.)
• Question, question, question
  The time to ask the seller questions is before you bid, not after. Both Durzy and the FTC’s Matties recommend contacting the seller either via eBay’s e-mail system, or by phone. This way, not only can you get your questions answered, you also determine whether the seller is responsive. If you have any doubts, trust your instincts, Durzy says.

Protections when things go awry
OK, say you followed all the above tips and something still went wrong. What can you do about it?

• Sort it out with the seller
  First, try to work things out. When Rainones husband went to inspect their minivan, he found a small scratch. (Its really hard to see dings in a silver car, she notes.) The seller not only had it fixed by the time they picked up the car, he deducted $400 from the price.
• Short-term service agreement
  Many cars qualify for eBay’s free, short-term service agreement. It covers engine and transmission problems for one month after the auctions close date or for your first 1,000 miles, whichever comes first. Cars older than 10 years or with mileage over 125,000 aren’t covered. (Read more about eBay’s short term service agreement.)
• Purchase protection
  If you’ve been defrauded or a car arrives that has been materially misrepresented, eBay will give you your money back — as much as $20,000. This is a major incentive for not taking the transaction off eBay. (Some people contact bidders through e-mail to get them to buy another car thats not listed on eBay. If you go off eBay, you’re truly on your own, Durzy says.) But be careful here: To qualify for this free purchase protection, the “misrepresentation” must amount to fully half the cars purchase price. Meaning, if you get a car that has $2,000 in undeclared damage and you paid $16,000, the policy doesn’t apply. Also, motorcycles, RVs and auto parts don’t qualify at all.
• Mediation and fraud reporting
  If a problem leaves you in a standoff with the seller, eBay also has dispute mediation services. But if you feel you’ve actually been defrauded, you should report it to eBay’s fraud center and to local authorities, including the police and the state attorney general. You can also file a complaint with the FTC, Matties say, but at that point, its really a criminal matter.

See the article here.

Let me know what you thought about this article. I know it has helped me.
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