The Internet has made it easy to buy and sell titled vehicles, regardless of what city, state, and even country you live in. However, with the increased convenience and opportunity, there’s also an increase in risk.
Scams and fraud are very real concerns when it comes to making any purchase on the web. This risk increases greatly when you’re talking about transactions involving thousands of dollars and sometimes-stressful documentation. The best way to ensure that you aren’t a victim of a scam is to protect yourself from the start using an escrow service.
An escrow account is simply a bank account overseen by a neutral third-party and usually associated with high-value purchases. They can be useful for anyone looking to maintain accountability between two parties in ANY high-value transaction, including buying/selling a vehicle.
Benefits to Buyers
As a buyer, one of the biggest risks you run into is misrepresentation. You think you’ve found the holy grail of classic cars only to find out that, after the vehicle arrives, you’ve been taken for a ride. Escrow services help to mitigate that risk almost entirely. As a buyer, all of your purchase funds are held with a neutral third-party and are only released as specific checkpoints in your agreement are reached.
So, if the seller’s vehicle arrives and isn’t what was advertised, you have the opportunity to return the vehicle to the seller and be refunded the full purchase price.
Benefits to Sellers
From the seller’s perspective, the greatest risk is that the buyer doesn’t pay the agreed amount. Escrow services remove that issue from the equation by verifying the funds–in full–up front. You won’t have to worry about cashier’s checks being lost in the mail or notice of insufficient funds days after your vehicle has left your driveway.
Escrow also allows for the scheduling of smaller payments to be released to you, as needed, to cover things like transportation or repair costs. These scheduled payments will be outlined in the agreement.
Why Should I Use an Escrow Service?
Most online escrow services also include a workflow that allows for the easy uploading of any documentation required by the parties involved in the sale, such as:
- Inspection forms from mechanics.
- Bills of lading.
- Photos of the vehicle to verify condition or progress of repairs.
All of these items can be easily uploaded to bolster the seller’s claim as to the vehicle’s condition and to ease the mind of any nervous buyer. This type of record is even more important if the sale is taking place between residents of different states or countries.
The best part about using an online escrow service for your vehicle purchase is having all of these services done by the one company and all in one place. Online escrow platforms 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 gives you the best protection.
For more information about online escrow services, watch the video below or visit our friends at PaySAFE Escrow if you have additional questions.