Just bought a car on Facebook Marketplace? Here is what you need to know.
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If you’re in the market for a car, chances are that you’ve noticed two things: an unprecedentedly high used car market, and buyers and sellers flocking to Facebook Marketplace to make a deal. Studies show that 78% of people use social media when making a car purchase; with 53% of buyers making their choice of new or new-to-them car entirely online. In this digital-first car buying world, avoiding scams when shopping and immediately filing paperwork after buying your new or new-to-you car can make your Facebook Marketplace a successful and stress-free experience.
With a shortage of computer chips and a lack of repossessions, and fleet cars limiting supply, the used car market is hotter than some have ever seen. Lower inventory also means that some people will look for places other than the dealership to buy a used car. More than half of shoppers discover vehicles online, with 30% using their smartphones or tablets to search. On Facebook Marketplace, cars can be found in new and used condition, from private sellers and dealers alike.
- Shop smart by reviewing the seller’s profile before engaging, only buying locally and checking the vehicle’s history.
- Watch out for scams, never buy gift cards to purchase a car, meet in well-lit public places and consider taking someone with you to complete the transaction.
- Immediately update insurance and title paperwork after buying or selling a vehicle to avoid fines, penalties, and possible suspension.
Buying a vehicle on Facebook Marketplace
While you cannot actually purchase a car on Facebook Marketplace, you can search for one and make a connection with a seller to buy a car. How this works depends on the type of seller and whether or not the car has an existing loan that must be paid off for the seller to transfer the title to you as the new owner.
What is Facebook Marketplace?
Facebook Marketplace was launched in 2016 as a competitor to Craigslist. The integration within the existing Facebook platform helped Marketplace rise in popularity because Facebook has the trust factor that Craigslist lacked. In 2018, Facebook began allowing car dealerships to advertise new and used cars on Marketplace. With Facebook Marketplace one of the most popular places in the country to search for used vehicles, dealerships and private sellers may have the edge over other online search engines.
Facebook Marketplace allows both private sellers and dealerships to advertise new and used cars for sale. Many choose to search for a car on Facebook Marketplace because they want the best price and are hoping for a deal. Facebook Marketplace’s rules are simple when selling a car; make sure the description and photos match and follow Community Standards. Buyers and sellers should also be respectful and authentic in their buying and selling practices.
When shopping for a used car online, be smart in your approach. Only buy locally and review the seller’s profile or business page to check for warning signs like few friends or a newer profile. If buying a car from a dealer, search for reviews and recommendations outside of Facebook and be sure the dealer’s name matches what is on Facebook.
It is also important to know that pre-existing damage is not covered by auto insurance. Pre-existing damage could be minor, like scratches and dents, but it could also be serious and signal a past accident about which the seller may not be forthcoming. It might be worth getting the VIN from the seller to purchase a CarFax or other VIN-based history report to verify if the car has been in an accident before you meet in person to buy the car.
Watch out for scams
With a hot used car market, scammers are likely out there trying to make a quick buck. If a deal for a car seems too good to be true, it probably is. Listing used cars for low prices almost guarantees a lot of views on the ad, increasing the likelihood someone may fall for it. Dealerships are sometimes brought into the scams, with scammers posing as dealers and taking unsuspecting buyers’ money.
To avoid car buying scams on Facebook Marketplace:
- Never buy gift cards to purchase a car
- Ask for the VIN to verify the car matches the pictures and description on the ad
- Verify that the information matches if its a dealership ad
- Never send money upfront without seeing the car in person
Even with a great deal, buying a car can be expensive. Purchasing a car from an unknown person may pose a safety risk, especially when meeting face-to-face to complete the transaction and exchange money. Facebook Marketplace does not offer purchase protection on vehicles, so it is important to be diligent as a buyer and seller:
- Take a friend or family member with you
- Meet in a well-lit public area, preferably with other people around. You may even want to consider meeting at a police station
- Verify the VIN, description and photos match the car
- Consider completing the monetary transaction at the DMV or a bank
- Ensure all documentation (title, lien release, bill of sale, etc.) are correct before handing over money
I bought my car. Now what?
Now that you have bought your car, you have to take immediate action to drive it. The steps to take to transfer your car from the seller to you include:
- Reporting the sale to your insurance company
- Insuring the car according to state minimum guidelines
- Change the title at the DMV from the prior owner to you
- Taking it for inspection if required in your state
Insurance and liability
The process of transferring the title of the car from the previous owner to you may vary by state, but you will have to go to the DMV to complete the transaction. You may be required to provide:
- A bill of sale
- VIN and odometer verification form
- Title with owner transfer and signatures from the buyer and seller
- A lien release
- Fees for transferring title and ownership
If you do not do this, the seller may be held liable for your actions as the purchaser. If you sold a car in the process, you should remove the sold vehicle from the policy. Some states require the tags to be turned in before removal, while others do not. Failure to do this in a timely fashion could result in fines, penalties and a license and registration suspension.
Before you start driving the car, you should purchase a car insurance policy for it. You may find the best deal on car insurance by shopping around for quotes to compare rates and coverages. The rate you pay for car insurance depends on several factors, including your age and driving record, and may be higher or lower than the average annual cost of full coverage car insurance, which is $1,674 per year.
Document pre-existing damage
If there is pre-existing damage to the car, it is important to document and submit the damage to your insurance company. This way, you have the best chance of future claims being covered. Your insurance company will not cover any pre-existing damage.
The bottom line
With a hot used car market, Facebook Marketplace could be a great place to find a deal on a used car or sell one to make a profit. Sellers should be honest about pre-existing damage, make sure photos and descriptions match and offer a fair price. Buyers should be aware of scams, consider a VIN report to verify the car’s history and take steps to stay safe during the transaction. Verify your state’s DMV and insurance requirements before selling or purchasing a new or used car to avoid potential fines, penalties or a license and vehicle suspension.