Buying a Car on eBay: Financially Sound or Insane?

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Last week, I walked into Clark Howard’s Consumer Action Center and announced that I had purchased a car on eBay. Once the initial laughter subsided, I had to defend my actions as many of my contemporaries said that I had taken a huge risk. Some even questioned my sanity.

I don’t think it was a particularly risky move and here’s why.

Why I Bought a Car on eBay

First, a little background. I happen to love browsing products on eBay and I tend to spend a whole lot of time on eBay Motors because there is a terrific selection of automobiles both new and used. I also tend to use eBay frequently for items that I can’t find in stores easily. Usually, I find what I’m looking for very quickly and can get the item delivered.  I am a seasoned eBay buyer so there is a nice comfort level there.

I also have used eBay to sell items. In particular, collector cars that just don’t get the exposure needed in local or regional advertising journals.

Here’s the backstory on the particular transaction that raised so many eyebrows. First, I bought a car I’d only seen in photos in an eBay listing from a seller with whom I have had no experience. On top of that, the car was five states away with 900 miles between us. I also fully paid for the car before I ever laid eyes on it.

How Did I Complete This Transaction With a Sense of Security?

There are a number of ways to verify that the seller on eBay is a legitimate vendor. eBay shows the buyer a rating on its sellers that is comprised of a compilation of customer satisfaction feedback. In the case of this transaction, I was able to see that the seller had a 100% satisfaction rating from eBay members who had made purchases from them.

This rating is comprised mainly of metrics in regards to the accuracy of the items’ description online and actual condition when delivered. Customer service and shipping promptness are also taken into account. I carefully scrutinize these ratings before ever placing a bid or purchasing an item.

The seller, in turn, is able to see my eBay rating as a customer. This buyer rating is comprised of feedback from other sellers with whom I’ve done business and is based mainly on payment history. The primary metric for this rating is promptness.

From the moment I bid on this car, the seller could see my rating from other sellers and, if not acceptable, could have cancelled my bid.

This is great information to have when making a purchase online but hardly enough when spending thousands of dollars on a car.


How You Can Do Your Due Diligence When Buying Online

The next step was to use Autocheck to look at the history of the car. Autocheck is similar to CarFax and reports any accidents where an insurance claim has been made, registrations by state and the type of title the car has.

Neither Autocheck nor CarFax is perfect. I’ve seen situations where a report shows no accidents, but the car has clearly had major repairs. If a repair is self-paid, it usually does not show up on either of the reporting services. However, I’ve seen reports on cars that have had insurance-paid repairs that state the car is accident-free. The lesson here is to use this as a tool, but don’t rely on the information to be 100% accurate.

Where these services appear to be most reliable is in the reporting of the title condition (i.e. clear, rebuilt, salvage, etc.).  But, the best protection by far is to have a mechanic inspect any auto purchase before any payment. I had an inspection done on this car, but with it being an electric car, the best I was able to get was an inspection that gave a report on the general condition of the car.  The mechanical inspection was limited to starting the car and verifying that the battery held a charge.

Last, but certainly not least, eBay Motors offers something they call Vehicle Purchase Protection. There are lots of conditions that apply, but I read them over prior to bidding so I knew where I’d stand in the event that things didn’t exactly go my way. Again, there’s a nice level of protection in the plan, but I’d hate to have to actually rely on it to get my money back.

I took all of the steps mentioned above and what I received was a car that looked better than the photos I’d seen online. The transaction was very smooth and the only additional expenses after I’d completed the transaction on eBay were to cover the delivery and pay state and local sales taxes when registering the car. All told, I spent around $7,000.

What did I get? Well, I think I got a fantastic bargain. I bought a 2012 Mitsubishi i-MIEV with 10,880 miles for a fraction of the cost when new.

The i-MIEV is Mitsubishi’s subcompact electric vehicle offering and can best be described as very similar to a Smart Fortwo with four doors and four seats. It is a very simple car and the one I bought is pretty much a base model but does include fast charging. What’s also awesome about this car is that now, with the other electric car in our garage, my wife and I are not using any gasoline except when we have to drive further than either of our electrics will reasonably take us.

Would I Buy Another Car on eBay?

Absolutely. I love the simplicity and I really like the bidding process as opposed to haggling with a dealer. And, bidding isn’t the only way to buy on eBay. Some cars are listed on eBay in auctions and others are listed with a “Buy it now” price. Some are offered with both options and even a few listings have the option of making the seller a direct offer.

It’s really a great automotive marketplace. The variety of vehicles is very wide and the opportunity to compare prices on similar models is convenient and helpful in getting the best price. Just take your time, do your homework on the car and the vendor. Don’t forget to familiarize yourself with eBay’s Vehicle Purchase Protection and you should have all the facts you need to complete the purchase with confidence.

And, because this can’t be stated enough, get the car inspected prior to spending dollar number one. It’s that important.