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#320915 - 09/01/10 12:52 PM Ever use an escrow service to buy a car?
michael_d Offline
connoisseur

Registered: 07/23/04
Posts: 4195
Loc: Up yonder
I am negotiating with a private seller to purchase a car that I sort of stumbled across on EBay. (I bid on it after a couple glasses of wine thinking it wouldnít be accepted anyway, the car sold to someone else. The seller contacted me via email to tell me itís still for sale because the buyer could not get financing and to make an offer, which I did and he agreed to) The price is too good to not seriously consider closing the deal. The seller has suggested we use an escrow service. I have never used one, so Iím a bit hesitant to commit. The seller suggested we use the escrow service that eBay motors recommends; escrow.com

The way I understand this process, is that the seller / buyer come to terms, including shipping. I create an account with the terms noted. The seller and buyer then set up the account and I then transfer funds to the escrow account. The seller then ships the car to me and I have a pre-determined amount of time to inspect the car. If I accept the car, I then authorize the payment to the seller. If I reject the car, I then have to ship it back to the seller and I pay the shipping fees. Shipping fees are $1500 - $2500 depending on the carrier used. The fees for the escrow service is .089% of the purchase price (about $500 in this case). So if I reject the car, Iím basically out around $4000 which includes my costs for travel.

I have already told the seller that I want to see the car, which means I need to fly to CA. (Iíd do this regardless if I use the escrow or pay cash in person).

Knowing this crowd, Iím sure there is someone who has done this before and thereís probably someone with some wise advice to share.

The seller isnít pushing for a quick transaction, but I need to do something within a few days. I am sketical that this is legit, but.....

Advice??
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#320916 - 09/01/10 01:26 PM Re: Ever use an escrow service to buy a car? [Re: michael_d]
Adrian Offline
axiomite

Registered: 12/27/08
Posts: 6874
Loc: It's all about the location.
Michael, I don't know the legal explanation of using escrow but I believe you are right in your understanding of it...the escrow being a third party to make sure that both sides of the deal are met and satisfied according to the terms they agreed upon. When I bought my house, I had to put down some money(not really a down payment per say) just to solidify the deal. This went into an escrow account, not actually to the builder(at least not right away), where it was held for 8 or so months.

You want to see the car before you pay for it anyway, so if it were me, and the car is too good to pass up, I think I might skip the escrow and use that $500 to fly down to CA and check the car out. After you thoroughly check it out, if it's a keeper, get your coin wired down from your bank and arrange shipping/drive it back yourself.
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#320918 - 09/01/10 01:30 PM Re: Ever use an escrow service to buy a car? [Re: michael_d]
pmbuko Offline
shareholder in the making

Registered: 04/02/03
Posts: 16437
Loc: Ben Lomond, California
How much of a good deal are we talking? Too good to be true? If so, that's a sign of a possible scam, so it warrants extra caution. escrow.com is legit, but the thing to be careful of if you do end up using it is NOT so use any links found in emails, but to manually type escrow.com into your browser when you log in to be sure you're using the legitimate site.

Since you are going to see the car (and the seller) in person, cash seems to be the safest bet. Cheaper for you in the long run, too.
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#320919 - 09/01/10 01:32 PM Re: Ever use an escrow service to buy a car? [Re: Adrian]
ClubNeon Offline
connoisseur

Registered: 02/06/09
Posts: 3466
Loc: Western Maryland, USA
Escrow is fine when there are terms to be met, and you do want to show good faith. But for $500, when you could be out substantially more because of the return shipping, I'd not go for it.

If the seller wants to see the good faith, put the money in escrow, but fly down to see it. Don't let it be shipped.

I used escrow once to pay my rent, when the landlord had not completed repairs. In Maryland, you can be evicted if you don't pay, even if the place isn't safe to live. But you can pay into escrow, and only let they money be released upon the meeting of your terms.
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#320968 - 09/01/10 05:14 PM Re: Ever use an escrow service to buy a car? [Re: ClubNeon]
HomeDad Offline
connoisseur

Registered: 12/29/05
Posts: 3301
Loc: Central,California
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#320973 - 09/01/10 05:28 PM Re: Ever use an escrow service to buy a car? [Re: HomeDad]
HomeDad Offline
connoisseur

Registered: 12/29/05
Posts: 3301
Loc: Central,California
And how about a link to car, another Vette?
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A computer once beat me at chess, but it was no match for me at kick boxing.

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#320985 - 09/01/10 06:58 PM Re: Ever use an escrow service to buy a car? [Re: HomeDad]
michael_d Offline
connoisseur

Registered: 07/23/04
Posts: 4195
Loc: Up yonder
Link is broke now. It was an eBay auction that ended. Yah, it was / is a Z06. Loaded, extreemly low miles. My gut is telling me to pass. I think I better listen to my gut.
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