Deposit Scams When Buying Cars Online: How to Protect Yourself

How Deposit Scams Work

The scam is simple and devastatingly effective. A too-good-to-be-true listing catches your eye—price 25-40% below market. You message the seller. They're responsive, friendly, seem legitimate. Then comes the hook: "I have three other buyers interested. Can you put down a deposit to hold it?"

You send $500, $1,000, or more via wire transfer or digital payment. The seller stops responding. The car doesn't exist, or isn't theirs to sell. Your money is gone with virtually no recovery path.

Red Flags That Signal Deposit Scam

• Price too low: 25%+ below market value with no reasonable explanation
• Urgency pressure: "Other buyers interested," "must decide today"
• Deposit required: Legitimate private sellers don't require deposits
• Can't meet in person: Military deployment, out of state, "will ship"
• Wire transfer/gift cards: These payment methods have no protection
• New social media profile: Created recently, few friends, minimal history
• Vague about vehicle: Can't answer specific mechanical questions

How Scammers Create Urgency

Scammers are psychological manipulators. They create artificial urgency to prevent you from thinking critically. Common tactics:

• "I have someone coming to see it tomorrow—first deposit holds it"
• "I'm leaving the country next week, need to sell fast"
• "My husband/wife doesn't know I'm selling, need quick cash transaction"
• "I'm in the military, deploying soon, need to sell before I leave"

What Legitimate Transactions Look Like

Private sellers: Meet at their home where car is kept. Verify ID matches title. Exchange payment for signed title in person. No deposits needed.

Dealers: May request small refundable deposits ($100-$500) on pending deals. Should provide written agreement specifying refundability. Never request wire transfers or gift cards.

If You've Already Sent Money

1. Contact your bank/payment service immediately—some have fraud departments
2. File police report in your jurisdiction and theirs (if known)
3. Report to FTC at reportfraud.ftc.gov
4. Report to IC3 (FBI's Internet Crime Complaint Center)
5. Report listing to the platform (Facebook, Craigslist, etc.)

Be realistic: recovery rate is only 11%. Most victims never see their money again.