1. Know your seller  (feedback and terms and conditions)
2. Know your car  (picking a model, Carfax and Experian)
3. Know the market 
4. Have the money before you bid
5. Know how you will get the car - will you pick it up in person or have it delivered?  And factor that cost in. 

Buying a car online is a low-hassle, no- or low-haggle, way to buy a car. However, without adequate preparation it can be a major-hassle way to pick up and own something you don’t want.

I'm relatively patient when I'm spending a lot of money, so I am prepared to shop for a year to find the model and deal I am looking for. This means that, once my search begins, I spend less than 5 minutes each day looking at the cars newly listed that day. For online auctions, I either place a low bid on the cars I am interested in or put them on my watch list (there is a limit of 30 items you can keep on your eBay watch list, but I have not seen a limit to the number of items you can bid on that will then show up under "Items I'm Bidding On" on your My eBay page). 

I purchased my first car online, on eBay, in February, 2003, and I am delighted with the purchase. The entire experience was easy, and I visited some relatives and friends in Florida when I picked the car up in Palm Beach. 

Good luck.

Know Your Car

Before bidding, start by test driving some cars locally, look at Consumer Reports reliability rankings, and talk to people who own the brands and cars you are considering. Unless you are planning on becoming a car dealer, it can be difficult to educate yourself on more than 3 or 4 models.

When you get serious about buying, you will want to consider signing up for the 30-day CarFax reporting service ($24.95, but you can only sign up for this once every 6 months) to check the vehicle history of cars you are interested in (I ended up running 70-plus Carfax reports before buying my first car on eBay). The Experian service is linked directly to the VIN (Vehicle Identification Number) at the top of the eBay listing; these cost $9.95 for 10 reports.

Some dealers provide a free Carfax report, either through a link on the auction page or by contacting the dealer representative and asking them to fax or email a copy to you.

The car ownership reports from Carfax or Experian can help you see the geographic area where the car was probably used, and they will list where the car was registered. They’ll also tell you if the car was involved in a major accident (from those jurisdictions that report accidents to Carfax), and if the car was leased.

You must have realistic expectations: if you buy a 10 year old car with 125,000 miles on it, it is not realistic to expect that it will be repair-free for too long. I never trust the photos for a car's quality - detailing a car well is not that expensive. I like checking Carfax, and I'm especially interested in seeing where the car was registered - I avoid cars from states that use a lot of salt in the winter.

There are nation wide inspection services that charge between $75 and $150 to go out and inspect a car for you. For example, see
http://pages.ebay.com/ebaymotors/services/inspection/inspection.html

We don't buy new because we don't want to take the substantial initial depreciation hit that occurs with a new car.

Know The Market

Look at cars.com and eBay Motors to get a feel for what prices people are asking and especially at eBay to see what people are really paying. You can look at edmunds.com for their “TMV” (True Market Value), which IMHO are ballpark figures, but don’t pay more than that. 

Also look at the “Black Book”.


To get a good feel for what the market is like will take 4 to 8 weeks, after which you will have a good feel for the market for the 3 to 4 models you are looking at. I recommend that you do some sample bidding with lowball offers - be careful of bidding on “no reserve” auctions with anything but a lowball offer unless you are prepared to own the car for the price you bid.

When you start bidding, my assumption is you are looking for a good deal. My recommendation is that you decide BEFORE BIDDING what you are willing to spend to own that particular car. Also, I notice that new buyers tend to pay more than experienced buyers and buyers who've been registered on eBay for a year or two.

Know Your Seller

You need to examine closely the terms and conditions of each auction. Some sellers add dealer prep fees, and some do not disclose any fees but add them after the sale. Ask if you’re not sure. 

If the seller is a dealer, if they have a web site look at it to see what else they sell and if any additional information is available for the car they are selling on eBay.

Think about where the car is located. Do you have other reasons to want to visit there in the next few weeks: family, business, sightseeing? Do you know what the approximate shipping costs are? Will the seller cooperate with a shipper?

You also need to calculate shipping costs or the costs of getting to the car and picking it up. If the seller is a dealer, ask if the bid or dealer fee includes temporary tags if you want to drive the car home.  I have no experience with shipping a car, but based on the complaints I've seen it looks like it pays to check around before selecting a shipper.

Look very carefully at each eBay seller’s feedback, and contact previous buyers listed in the seller's feedback if you have any questions about the seller. There are some sellers who specialize in high mileage newer cars, some who specialize in low mileage cars of all years, and some sellers have very high percentages of positive feedback after selling a couple of hundred cars. Which is impressive for any seller, but especially so for anyone selling cars.

I look closely at the seller's feedback, and I prefer sellers who have sold many items and have at least 50 positive feedbacks - unless the seller is a new car dealer, and then my assumption is that they know what they're doing and probably won't rip me off too much.

Certain sellers seem to specialize in certain types of cars: some sell cars from auctions with 90k to 130k miles, but that look really good, others deal in cars from TX with less than 60k miles, etc. This may be a result of their established buying patterns. If you find a seller that sells cars with particular characteristics that you like, it is worthwhile to bookmark that seller's "Items for sale by seller" page, which you can access by clicking the "Items for Sale" on their feedback page or clicking "View seller's other items" link on an item page.. 

I don't usually bid on an item listed by a new individual seller. Many newbie eBay sellers are like some folks who sell their own houses - the prices are not realistic.

If a seller is local, I will email and ask them if I can come by and look at the car. If they don't reply in a reasonable amount of time (within 1 or 2 days), then I don't bid or I lowball bid to reflect the risk I'm taking. Unresponsive before the sale is likely to be unresponsive after the sale. If a seller said "No" to a presale inspection, I wouldn't bid at all.

For my money, the best assurance is to look at the seller's feedback. I won't bid on a car being sold by a new seller or a seller with zero SELLING feedback, no matter how good the deal, UNLESS the seller is a new car dealer or an established used car dealer or someone I can reach on the phone immediately. 

I'm always a bit leery if the negative feedback runs more than 1% or 2%, but that depends on the type of feedback. It also depends on the feedback of the folks who left the negatives - some people are chronic complainers. But 7 negatives for less than 100 sales is a red flag for me. Where there's smoke....

It is important to look at the seller’s positive, neutral and negative feedback. And look at the feedback of any buyer who LEAVES neutral or negative feedback for a seller: are they constant whiners and do they have a lot of negative feedback themselves? 

What is the nature of the neutral and the negative feedback? Is there a pattern to the complaints? Is there a pattern to the positives? How does the seller respond to neutral and negative feedback: do they always blame the buyer (big red flag)? Are seller feedback and responses nasty in tone (another big red flag)? Have any problems subsequently been resolved? If a seller is unresponsive before the sale, they are probably not going to be any more responsive after the sale.

After a sale, you should not leave feedback for at least one or two months. See how the car works out, and make sure your title arrives if the seller was going to have it sent. If you have any problems with the car, let your seller know about them and see what kind of resolution you can work out. If the car is not as represented or does not meet your realistic expectations, let the seller know immediately. If you go to pick up the car and the seller won’t address your concerns, don’t buy the car. If you have already bought the car, contact the seller first, but if you can not get the problem resolved, leave negative or neutral feedback – and be prepared for similar feedback from the seller. 

If you bought a car from a licensed dealer, you can also alert eBay Investigations, the Better Business Bureau, and the dealer’s state licensing authority. In extreme cases, you might want to contact the consumer fraud division of the state attorney general in the state where you bought the car. But make sure you contact the seller first and try to resolve any problems before going elsewhere with your complaints. Most regular eBay sellers want to preserve their positive ratings and they want positive feedback. 

Many sellers will let buyers back out if the buyer inspects the car and the buyer and seller can not resolve any differences. Some sellers may want the buyer to pay a $100 to $200 re-listing fee, and a few sellers promise you a small fee if, after you buy, the car is not as described. If you had the car shipped and want to return the car, shipping both ways is almost always the buyer’s responsibility. Read the terms and conditions, and, if you’re not sure what seller's terms and conditions are, ASK the seller. If a seller won’t respond or doesn’t answer your questions, don’t bid.

Finances

Make sure you have the money to buy the car lined up before bidding; that means you either have the cash or you are ALREADY APPROVED for a loan.  

DON'T FORGET to factor in the cost of getting the car, whether you pick it up or have it delivered.

Payment terms are usually set out by the seller. Some sellers want cashier checks, some want cash, some want wire transfers. A few will take credit cards for deposit, and a small number will take credit cards for payment. 

Most sellers will not accept Paypal or credit cards, although some are willing to accept those forms of payment for the deposit.

If you’re not sure what forms of payment the seller accepts, ASK. And if you ask a seller a question and they don’t respond, again, ask yourself how communication will be after the sale.

I'd be surprised if a seller was willing to accept Paypal for anything more than the deposit. (btw - in my experience, Paypal is lousy for buyers who get into disagreements with sellers.)

Miscellaneous Tips

I like to shop and bid for at least a couple of weeks to see what sells, who shows up regularly (both sellers and buyers), what prices are, and to get familiar with the subtleties of different models. ( For example, the Lexus ES300 comes in a couple of variations, and some features change in mid-year: some have 16" wheels, most have 15" wheels, some have keyless remotes built into the key, others have it as a separate fob, some have the CD changer in the trunk and newer ones in the dash, some have heated seats, some don't. And it is not always clear from the photos and the description what features a car has - so ask if it isn't clear.) 

Some sellers don't know what they're selling, so being able to identify different features from the photos is helpful.

Know how you will get the car - will you pick it up or have it delivered?  Ebay has a page on delivery: http://pages.ebay.com/ebaymotors/services/das-shipping.html 

Don't get caught up in the buying or bidding process.  
This means that you have chosen the vehicle carefully, you know how much you are willing to spend FOR THAT PARTICULAR CAR, you have answers to all of your questions, you've inspected the vehicle carefully, you have run a vehicle history report (CarFax or Experian), you are familiar with the car's reliability from Consumer Reports, you are satisfied with the seller's feedback or reputation, and you have your finances in order. 

Remember that most cars are depreciating assets.  No matter how good a car looks when you buy it, it is 99.9% certain it will not go up in value in the future.

Miscellaneous questions to ask via email (you're getting it in writing):

Do you get a temp tag from the seller? If seller is a dealer, is there any processing fee above the winning bid and will they collect your state tax and title fees or will they issue you a title immediately and any state taxes are your responsibility? 

Does the car have a warranty?  Is it the manufacturer's warranty, a nation-wide third party warranty, or the seller's warranty?  What is the deductible, what is covered?

Ask how many keys come with the car. Some keys you can only get from a dealer and some of those cost $125 - $200 each.

Does everything work?  Will the car pass any required safety and emissions tests in your state?  Do all the accessories, especially lights, work?

Is the interior clean: are there any tears, stains, rips on seats, carpet or headliner?

Do all the tires match? How much tread is left on the tires? Are all tires worn evenly?

Has the car had a recent oil and transmission fluid change, and has the car had recent  recommended major services?  

How old /how much wear do the brakes have?

Are the shocks new/in good shape?

How many owners has the car had? (One-owner cars are good.)

Does the car include a spare and the jack? 

Are books and records included? 

Do all Vehicle ID Numbers (VINs) on all the stamped parts match?

Does the car have high or low miles for that model year?  Common car evaluations assume 12,000 miles per year, so anything above that reduces a car's value and anything below that increases its value. 

Does the audio equipment have parts that might not be included? (For example, the Lexus CD changer has a magazine that comes out of the changer, and not all the cars with a changer come with a magazine. You can buy another one on eBay for $10 - $25, but it's a pain.)

Also see:

• Buying a Used Car - from the FTC
• How to Buy a Used Car & Avoid Scams - lots of ads but much good advice 
• How to Inspect and Buy Used Vehicles - from an entire online book 'Good As New' Used Car Buying 
• Consumer Reports reliability rankings in the annual buying guide
• How to Buy a Good Used Car - from American Woman Road & Travel
• Finding the Best Used Car - from the FTC

If you have any additional suggestions, please use our web form to send them to us.

Good luck.