Why credit-challenged car buyers may want to think twice before selling a car on Craigslist.
When it comes time to dispose of that first vehicle, should these borrowers trade it in or try getting more money for it by selling it online? According to the National Insurance Crime Bureau (NICB), if consumers are thinking of selling a vehicle online, they might want to avoid Craigslist.
Organized Online Scams
Back on May 8th, the NICB issued a warning regarding "an organized scam involving sales of vehicles through the popular online market place, Craigslist."
Working with law enforcement agencies throughout the Midwest (including Chicago), the NICB identified nearly 100 instances of vehicle sales that ended badly for the seller when phony bank checks were used to pay for the vehicle.
"These scams are well organized and have all the appearances of being legitimate," said NICB President and CEO Joe Wehrle. "But in the end, the criminal gets the car and the sellers or their financial institutions are left on the hook for thousands of dollars still owed on the car."
In one instance, a Kentucky couple was given a bogus check for a 2010 Corvette, although the vehicle was recovered in Chicago before it could be re-sold (on Craigslist where it was listed). In another, a Missouri man was allegedly murdered when he met a buyer who had seen his car for sale on Craigslist.
To avoid situations like those, the NICB has these tips:
Applying for a Bad Credit Car Loan versus Paying Cash
There are a number of reasons why taking out a high-risk auto loan is a good idea.
For one, subprime lenders report both loans and payments to the credit bureaus. For those borrowers that make their payments on time, this means that in a couple of years (and provided they've made timely payments on the rest of their obligations) their credit scores will improve and, most likely, they'll qualify for a lower (sometimes much lower) interest rate on their next car loan.
Even though you may not get top dollar from a dealer, all franchised dealers are licensed by the states in which they do business. So if something should go wrong, there is recourse though a state's attorney general's office.
The Bottom Line
Credit-challenged consumers who want to cash in their current vehicle might want to consider doing so at a dealership as opposed to a website like Craigslist. Even though they might not get top dollar for it, the extra money might not be worth the hassle or the chance of becoming involved in a car buying scam.
One more tip: Auto Credit Express matches credit-challenged applicants with dealers that can offer them their opportunities for car loan approvals. So if you're ready to take that first step, you can begin now by filling out our online auto loan application.