Buying or Selling a Car Through an Escrow Account

by Jim Thompson | Last Updated: December 16, 2020

With the advent of the internet, it’s become easier and easier to buy and sell vehicles. A simple online search will yield deals on vehicles for sale by owners and dealers alike, making it easy to locate just the vehicle that you’re looking for, but beware. There are risks that come with online convenience. You could be ripped off when buying or selling a vehicle this way.

To help mitigate that risk, you should consider making use of an escrow service. The escrow company holds your money or the buyer’s money until they receive the vehicle, and the deal is approved and ready to go. This helps ensure that the buyer gets the vehicle they are expecting, and it makes the selling process simpler and easier overall.

How Escrow Protects the Buyer

As a vehicle buyer, it’s difficult to tell exactly what you’re getting right away. Escrow helps protect your investment until you have a chance to look at the car in person or even bring it to your local mechanic to have it inspected. With escrow, if something doesn’t look right on the vehicle, you can get your money back guaranteed after returning the vehicle to the seller.

How Escrow Protects the Seller

As an automobile seller, the risk that you face is not being paid the full purchase price. The last thing that you want to do is release your vehicle to a stranger without first having all the money in hand. This is a genuine risk with fraudulent checks and other scams floating around. When you work with an escrow company, they verify that all the money has been received before you hand over the keys.

Speed up the Documentation Process

Making use of escrow services can also speed up the documentation process involved with buying or selling a vehicle. You can easily use these services to transmit photos of the vehicle, to send necessary forms, and to keep a nice clean line of communication that you can follow from beginning to end.

Escrow isn’t right for every car deal, but when you are handling things over the internet or want to make sure you have a nice legal trail that you can rely on, the service is well worth considering. Sure, you’ll pay a small fee for these services, but the fee is more than worth it to ensure that you are protected throughout the transaction. Be sure to compare several different service providers and decide on one that will meet all your needs. This will make it easier to get that old car sold or to pick up a new vehicle without fear of being ripped off during the process.