Using Automotive Escrow Accounts
Buying expensive items online can be risky. While a vast majority of transactions work out just fine, unfortunately, sometimes they don’t. The first, and scariest, reason is that some sellers and buyers are simply operating fraudulently. There never was the possibility of a legitimate transaction because one of the parties isn’t operating in good faith. They are trying to make money by scamming other people.
Second, and this is far more common, the buyer receives the item purchased and feel it was misrepresented. For example, Mr. Ed of Phoenix, AZ, suggests that what one person thinks a “rust free vehicle” is, is almost certainly going to be perceived differently by another person. (After all, what is “rust?” Is it that brown oxidation on bare metal or is it actual rotted holes in thin sheet metal. Both extremes are called “rust.”)
How to protect yourself
A good way to ensure that you aren’t a victim of an online scam is to protect yourself from the start by using an escrow account. An escrow account is a bank account overseen by a responsible, neutral third-party: an “escrow service.” Arranging for an escrow service can maintain accountability between two parties in any high-value transaction, including buying/selling cars and trucks.
Escrow- Benefits to Buyers
As a buyer, one of the biggest risks you run into is misrepresentation. For example, you think you’ve found the classic car of your dreams and after the vehicle arrives, you find out that the vehicle’s condition is much worse than you thought. In this case, you may be eligible to return the vehicle and receive a 100% refund.
Here’s how it works: as a buyer, all of your purchase funds are held with a neutral escrow service and are only released to the seller when you give the go-ahead. So, if the seller’s vehicle arrives and it doesn’t meet your expectations, you have the opportunity to return the vehicle to the seller.
Escrow- Benefits to Sellers
From the seller’s perspective, the greatest risk is that the buyer doesn’t pay the purchase price (or any money at all.) Escrow services remove that issue from the transaction by verifying the funds up-front. You won’t have to worry about cashier’s checks being fraudulent or getting a notice of insufficient funds days after the vehicle has left your driveway.
Additional benefits of using an escrow service
Most online escrow services also include a process workflow that allows for a linear transaction. This may include things like receiving and filling out Bills of Sale, Bills of lading, Photos of the vehicle, Etc.
The best part about using an escrow service for your vehicle purchase is having all of the previously mentioned services done by the one company. Escrow platforms typically allow for documentation, transportation arrangements, and purchase funds to be held securely in one easy-to-access location with a full communication history available to either party at any time.
When dealing with a buyer or seller unknown to you, using an escrow service may give you the best protection.