Whether you purchase a car from a dealer or a local seller, there is always some risk involved in the deal for both the buyer and the seller. But what do you do to protect yourself when you are buying or selling a car on an online auction such as eBay? The following are 7 steps that buyers and sellers can take to protect themselves and secure the purchase of a vehicle from an online auction.



1. Carefully consider the buyer’s/seller’s reputation. When you purchase a vehicle from a local private seller, you really have no idea with whom you are dealing. However, with an online auction like eBay, you have the advantage of learning about a buyer’s and seller’s reputation through eBay’s feedback ratings. If the reputation is less than stellar, read over the previous feedbacks from others and make a decision as to whether you should proceed. Although the decision is ultimately up to you, these ratings can make your decision less worrisome.

2. As a seller, require a minimum payment shortly after the end of the auction. By requiring a deposit within a few days after the auction ends, this may weed out NPB’s (non-performing bidders). Non-performing bidders are those who like to play the game of placing the highest bid to win the item, yet have no intention of actually paying for it. If someone puts a deposit down, they are then much more likely to complete the deal.

3. Get verified. When selling or bidding on items such as vehicles, which tend to be more than $15,000, eBay requires that you go through either an ID verification process, or that you file a credit card number with them. In consideration of all of the fraud involved in the auto industry, this verification helps to ensure the identity of who is actually buying or selling the vehicle. This further helps to build a buyer’s/seller’s credibility. eBay offers this ID service for a one-time fee of $5.00.

Sellers may also choose to become bonded sellers. This really boosts seller credibility and helps to alleviate buyers’ concerns. BuySAFE is one online insurance company that offers this type of insurance to online auction sellers. The seller will have a Buy Safe seal with their listing.

4. If the seller is acting as the vehicle owner’s agent, get a copy of the agency agreement. This helps to ensure that the seller is bound by the agreement to complete the sale for the owner.

If you are the seller and the buyer is the agent purchasing it for someone else, make sure all proper paperwork is in order and all required signatures are obtained, especially that of the actual purchaser of the car.

5. Should problems occur with the auction transaction between the buyer and seller, get mediation. This might sound like a dramatic and expensive undertaking, but it isn’t. In such situations, eBay recommends a service called SquareTrade. This group specializes in making sure all sides of the deal get fair treatment in the transaction.

6. If you will be dealing with an online escrow company, check them out before you work with them. A website called SOS 4 Auctions will help provide you with information on honest escrow companies.

7. Plan for your personal safety. You don’t have to be overly cautious, but don’t be naïve either. First, try to bring a friend or relative along with you. Second, meet the seller at a public place. If you can’t do either, always let someone know where you’ll be, at what time, and arrange to call them afterward.

Finally, if after receiving the vehicle, you discover that is “significantly not as described", or you do not receive the vehicle at all, you can use eBay Motor’s Vehicle Protection program, which is free and automatically applicable to anyone who purchases a vehicle through one of eBay Motors’ auctions. Your purchase is protected for up to $20,000.

Following the 7 steps should ensure that your online vehicle purchase is a great experience. Good luck and happy bidding!