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Buying a Car on Craigslist: What to Watch Out For

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Buying car on Craigslist
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Few of us consider buying a used car as a fun experience. It can mean countless hours visiting car dealers or combing through used car ads from private sellers on websites like Craigslist. Buying a car on Craigslist isn’t a bad thing — you’ll typically get a lower price from a private seller than you would at the dealer. But you also have to be on your toes for possible scams. Here’s what you need to know when looking to buy a used car on Craigslist.

Things to be wary of in Craigslist used car ads

As you look for vehicles, it’s important to understand that Craigslist is simply a place for private sellers and car dealers to list vehicles. There are no guarantees that you’ll be dealing with reputable people, and Craigslist doesn’t offer buyer protections. You could check the Better Business Bureau’s Scam Tracker, which tracks all types of scams, including those involving auto sales. Here are a few red flags that should warn you away from a seller:

You can’t get a vehicle history report. When answering a car dealer ad, it’s important to find out if you can pull a vehicle history report, according to Justin Osburn, a consultant with the National Independent Automobile Dealers Association (NIADA) — Carfax is one popular website offering such reports.

“The dealer should email it to you,” Osburn said. “And if you’re working with a private seller, they should provide you with a vehicle identification number (VIN). If they won’t give you this number, it’s a red flag.” For more, check out our used car checklist.

There aren’t any available pictures. “If there aren’t images, what are they hiding?” said Geoff Cudd, whose years of experience buying cars led him to found the education website Find the Best Car Price. He warns that a lack of pictures — or the use of only stock images — could mean problems down the road.

Too-good-to-be-true pricing. Osburn noted that sometimes used car dealers list a price that seems very low, and when you show up, you find out that it’s just the down payment. “We all have a sense [when] something’s off,” he said. “Pay attention to that.”

Dealer invoice or MSRP. According to Cudd, these phrases relate to buying a new car — so if you’re in the market for a used car, listings that include these terms probably aren’t going to fit the bill.

Seller asks to be paid by wire transfer. When a seller asks to be paid by wire transfer, that should set off alarm bells — especially if they want a portion of the money before they’ll meet you. They could easily take the money and leave you with nothing.

While combing through Craigslist, focus on listings with authentic images, and specific details about the car. You want to verify as much as possible ahead of time.

Tips for communicating with a Craigslist car seller

“You really don’t know what you’re getting with a private seller on Craigslist,” Cudd said. “You want to make sure you’re clear in your communication.” He also recommended starting out by using the seller’s preferred method of communication. Here are some of his other tips for communicating with a Craigslist car seller:

Communicate in writing when possible. Messages via email can be a good way to make sure that you understand what you’re getting. It’s easy to forget things or misunderstand what a seller says. However, when you communicate over email, you can refer back to information and terms.

Be polite and ask questions. Whether you’re on the phone or communicating over email, it’s important to be polite and ask questions. Keep communication professional and don’t be afraid to ask questions — you want to get all the information possible before making a transaction.

Find out why they want to sell the car. One of the best things you can do is ask why they want to sell the car. The answer can be instructive — and may even throw up a red flag.

Be sure to follow up quickly as needed. A truly good deal can be gone fast on Craigslist, so if you find something that looks promising, call or email as soon as possible.

Researching a car for sale on Craigslist

When you research a car for sale on Craigslist, you need to do more of the legwork. At a dealership, you have the ability to ask for a vehicle history report and see the cars immediately. When buying a new car, you have the posted price to start from. But with a private seller on Craigslist, you may or may not know the asking price or the vehicle’s history right away.

As you research a car on Craigslist, there some things to pay special attention to, according to Osburn:

Ask for the VIN and pull a vehicle history report on your own. For a fee, you can check out a car’s history through the National Motor Vehicle Title Information System or sites like Carfax or AutoCheck. “It’s worth getting this information so you’re aware of any problems,” said Osburn. “You might even be able to see service records and find out how well the car has been taken care of.”

Check for a “branded” or “salvage” car title. At a dealership, you can be fairly certain you’re working with a clean title. However, when you buy from a private seller, that might not be the case. Osburn advised to watch out for a “branded” or “salvage” title, words that indicate a car might have been totaled, or written off, in the past. “These cars should be worth less because of this situation and some sellers will try to hide that.”

Have the seller show you the title. Another problem, according to Osburn, is that some buyers don’t register the cars they bought. “It might have been a cash deal and the seller didn’t bother to go through the hassle of registration,” he points out. “However, you can’t register the car with the state if you don’t get the sign off of the person on the title.” Make sure the name on the title matches the name of the person selling the car.

Take the car to a mechanic. If you’re buying from a dealer that sells “certified pre-owned” or has some other guarantee, it might not be as important to take the car to a mechanic. However, when you work with a private seller, it’s vital to have the car checked out before you hand over your money. “Many mechanics will review the major components for a small price,” said Osburn. “They’re invested in doing a good job and maybe earning your service, and they can help you be reasonably confident you’re not getting a lemon.”

Research the price. Whether you buy from a dealer or a private seller, get an idea of the value of the car ahead of time. Use a website like Edmunds or Kelley Blue Book to enter car details and see what price range you can expect. This will help you decide how to proceed when you negotiate a final purchase price.

It’s also important to remember that sometimes used-car dealers post listings on Craigslist, points out Osburn. “Most dealers identify themselves in the ad,” he said. “Do a quick Google search to find reviews. You can find out a lot by the reviews and experiences of others.”

How to close the deal on a Craigslist car

Now that you’ve done your research, you know which car you want and you’re ready to complete a deal, it’s important to make sure you’re safe. You don’t want to get scammed — so as Cudd suggested, on the day of the deal, you should take the following precautions:

Don’t tell the seller you’re bringing cash. While robbery is rare, Cudd noted, the reality is that you don’t want to advertise that you’re showing up with thousands in cash. “You can also bring a cashier’s check, or use a service like Escrow.com to help you protect your money.”

Bring a friend. Rather than meeting someone alone, it’s a good idea to bring someone with you — especially if you’re a woman. “You’re more likely to be physically safe with a friend for backup,” said Cudd. “Plus the seller is less likely to try to pull one over on you when there’s another set of eyes.”

Meet in a public location during daylight hours. A public location offers you visibility, as does meeting in daylight. Additionally, you can see the car clearly during the day. You’ll want to go over the car carefully before handing over the cash.

Go for a test drive. See how the car drives on local roads and highways. You can also use this time to take the car to a mechanic for an inspection.

Get a bill of sale. Don’t just hand over the money and drive away — you’ll want proper paperwork for the state you’re in. “You can find sample bills of sale online,” said Cudd. “Bring one that can be filled out, just in case the seller isn’t prepared.”

Cudd also suggests asking to see a driver’s license so you can verify that the name on the title matches the name of the seller.

“Don’t be afraid to walk away if you don’t feel comfortable,” said Cudd. “If things aren’t going the way you planned, or if you think you might be getting scammed, just leave.”

Alternatives to buying a car on Craigslist

Your choices aren’t limited to a dealership or to buying a car on Craigslist, though. You can also find good used cars by looking on Facebook’s local marketplace. In many places, it’s still possible to see cars with posted “for sale” signs parked around town.

There are also many websites that specialize in used cars. Cars.com, Autotrader, TrueCar, and eBay Motors are all good places to start, Cudd suggested. Most of these sites offer listings that include some sort of payment and buyer protection that can help you avoid scams.

The bottom line

“For the most part, Craigslist can be a fine place to locate a used car to buy,” said Osburn. “Just be careful.”

Anytime you look for a car, it’s a good idea to shop around and compare prices — as well as used auto loan options.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Miranda Marquit
Miranda Marquit |

Miranda Marquit is a writer at MagnifyMoney. You can email Miranda here

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Auto Loan, Reviews

Review: Wells Fargo Auto Loan

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Wells Fargo Auto Loan

If it’s time to get a new or used car, it’s time to do your research. Perhaps you’ve picked out the car of your dreams and you want to figure out the best way to pay for it.

When it comes to financing a vehicle, you have a ton of choices. Wells Fargo, founded in 1852, is one of many places to consider getting an auto loan from.

Wells Fargo Auto, a division of Wells Fargo Bank, serves more than 3 million auto loan customers throughout the United States.

About Wells Fargo

Wells Fargo offers new and used vehicle financing through its network of 11,000 active car dealerships, but it’s possible to apply with the bank directly if you’re interested in financing outside of the dealership or refinancing an existing auto loan. You could also use a Wells Fargo personal line of credit or loan to buy a car from a private seller or buy out your leased vehicle, but you may have to pay an annual fee or origination fee. A home equity loan or line of credit is another possibility but puts your home at risk should you default on your car payments.

It’s worth noting that Wells Fargo continues to compensate auto loan customers who were charged for insurance they didn’t need or add-ons after their car loans were repaid or their vehicles repossessed. The bank’s redress program came after a December 2018 settlement with attorneys general from all 50 states calling for $422 million to be repaid to auto loan customers.

Wells Fargo: At a glance

  • Loan terms up to 72 months
  • Loan amounts between $5,000 and $100,000 for new and used auto loans.

Because a majority of Wells Fargo’s loans are through dealerships, what’s known as indirect lending, you may not know your exact rate or terms until you apply through a dealership. A Wells Fargo spokesperson said rates are based on a number of factors, including the borrower’s credit history. While the best rates and terms tend to go to those with the best credit, it’s possible to be approved with less-than-stellar scores at Wells Fargo.

Wells Fargo also offers loans for those looking for specialty vehicles like motorcycles or recreational vehicles. Existing customers may be eligible for a discount if they use autopay to make their vehicle payments from a Wells Fargo consumer checking account.

A closer look at Wells Fargo auto loans

Highlights of Wells Fargo auto loans

  • Multiple ways to pay: You could make your car payment through the bank’s online eServices function, automatic loan payments or at any Wells Fargo branch.
  • APR discount: Wells Fargo offers a 0.25% discount for existing customers who use a consumer checking account to make automatic payments on its car loans.

Lowlights of a Wells Fargo auto loan

  • Mix of direct and indirect loans: While it’s possible to apply directly through Wells Fargo for an auto loan, most of its auto lending is through dealerships.
  • Negative press: In addition to fines Wells Fargo has had to pay in regards to its auto loan customers, it has been fined for the way it treated mortgage customers as well. In all, the bank has agreed to pay billions in settlements and consent orders.

How to apply

As we’ve already mentioned, most customers apply through one of 11,000 dealerships in the Wells Fargo network. But applying outside of the dealership is possible — a Wells Fargo spokesperson said customers may call or visit a branch for more options. It’s possible to apply for a refinance loan online, in person or by calling 800-289-8004. We’ll talk more about refinance loans in more detail, below.

Here’s what the bank will want to know about you and your car:

  • Personal information: Address, contact information, date of birth and Social Security number.
  • Country of citizenship information
  • Marital status (Wisconsin only)
  • Housing information: Whether you rent or own and for how much as well as information about previous recent addresses
  • Income information: Your occupation, gross monthly income and previous employer
  • Information about your car: Year, VIN, mileage and remaining loan balance. You can find out your remaining loan balance by calling your current lender.

The fine print on an auto refinance loan

The only way to make sure you’re getting the best deal on a loan for a new car or to refinance the one you have is to shop around. Make sure a refinance really is in your best interest and that you understand Wells Fargo’s criteria before you sign:

  • Minimum loan amount of $7,500
  • Co-signers allowed
  • Not offered in Alaska, Arkansas, Hawaii, Louisiana, North Dakota or Washington, D.C.
  • May be difficult to get approved if your vehicle has more than 100,000 miles or is 8 years or older.

Once you have applied, Wells Fargo will contact you by phone, mail or email. You’ll have the option of signing and returning the loan package by mail or finishing the process online.

Who is a Wells Fargo auto loan best for?

Wells Fargo auto loans can be a good fit for those in the market for a new or used vehicle, or folks looking to refinance a current loan. It may be the best option for existing Wells Fargo customers looking to refinance — it’s possible to apply directly through the bank, online and, if you’re willing to make auto payments, you may score a lower interest rate.

A Wells Fargo auto loan might be good for anyone shopping for a new or used car as well, but the only way to make sure you’re getting the best rate, particularly if it’s one offered through the dealership, is by comparing it with your preapproval offer from another bank, credit union or online lender.

A Wells Fargo auto loan is not a good fit for anyone interested in a private party auto loan. For those, look to competitors such as Lightstream, Bank of America or a credit union.

Lindsay Martell contributed to this report.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Auto Loan, Reviews

Review: Bank of America Auto Loan

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Bank of America Auto Loan

The history of Bank of America dates back to more than two centuries, but that doesn’t mean its banking services are stuck in the past. In recent years, Bank of America has modernized its service offers by adding mobile auto lending services that allows buyers to choose a car and a car loan in one place. Yes, you can apply for its loans in person at a branch or over the phone, but it’s hard to beat the speed and convenience of applying from home or anywhere you use your smartphone.

According to Bank of America, you could receive a loan decision within 60 seconds of applying, which is about as fast an approval as you can get from any lender, whether in person or online. But don’t be so quick to gloss over the details. While you may get approval decision within a minute, you might not be getting your lowest rates. Bank of America offers competitive rates for new car financing and a discount for certain customers, but other lenders may be able to beat Bank of America when it comes to used car loans and refinancing.

About Bank of America

Bank of America’s online auto buying experience starts when you submit an electronic application through its website where you have the option to use your loan approval to shop for and buy your car through Bank of America’s network of participating dealerships. Once you get your loan approval you can visit the Bank of America website or use the banking app to search a national inventory of more than one million cars, then visit dealerships for test drives and to finish the paperwork.

You can also use a Bank of America loan to buy a vehicle outside of the network. The bank offers loans for:

For specific rates for used and new cars as well as loans you could use to refinance your existing car or to buy out your leased vehicle, see the chart below.

Bank of America: At a glance

  • Loan amounts starting at $7,500
  • Terms between 12 and 60 months

Bank of America offers a wide variety of loans, but its loans aren’t available for specialty vehicles such as motorcycles or RVs. Financing is available to residents of all 50 U.S. states who borrow a minimum of $7,500 ($8,000 in Minnesota), but it can’t be used to buy cars that are over 10 years old or with more than 125,000 miles.

Advertised rates for new car loans are comparatively low, but to find the lowest APR for your loan you’ll need to do some comparison shopping. Rates vary depending on what kind of purchase you’re making, where you shop and the condition of your credit, with the lowest rates available for buyers with excellent credit when they purchase a new car from a dealer. Bank of America advertises much higher rates for private party purchases.

Compare Auto Loans
 New from dealerUsed from dealerUsed from private party*RefinanceLease buyout*
Bank of America3.19%3.39%5.99%3.99%4.19%
Chase4.24%4.24%N/A4.89%N/A
LightStream3.99%3.99%4.99%3.99%4.99%
*Bank of America lease buyout and private party loan rates are current as of Sept. 18, 2019.

If you bank with Bank of America or have an investment account with its wealth management subsidiary, Merrill, you may be eligible for lower rates. Preferred Rewards members get a rate discount at 0.25% for Gold members, 0.35% for Platinum members and 0.50% for Platinum Honors members.

Your eligibility for Preferred Rewards is based on the average asset balances held by Bank of America and/or Merrill over the three months prior to your application, with a minimum average balance requirement of $20,000. You can enroll for free to see if you’re eligible.

A closer look at Bank of America auto loans

Advantages of Bank of America auto loans

  • Loan approval offers lock in your terms for 30 days. That gives you time to shop around and find the car you want.
  • No application or origination fees, unlike some other lenders.
  • No prepayment penalty, meaning you can pay off your loan early and potentially save on interest charges without being penalized.

Disadvantages of Bank of America auto loan

  • Other lenders’ rate discounts may be easier to qualify for than the Preferred Rewards’ discount. PenFed Credit Union, for example, offers a discount to customers who use its car buying service, which can mean new car loan rates as low as 1.49%*.
  • Loan preapproval isn’t available. That means you’ll likely have to take a hard inquiry into your credit, and possibly lose a few points from your credit scores, just to see the loan terms you’re being offered. However, it’s always a good idea to compare auto loan rates and applying to multiple lenders doesn’t hurt your credit any more than it does to apply to one, as long as you do so within a 14-day window.

How to apply for a Bank of America auto loan

Completing an application online is a straightforward process, and if you’re already a bank member you can choose to have some of the application prefilled. Whether you apply online, in person or over the phone by calling 844-892-6002, you’ll need to submit the following information to complete an application:

  • Name
  • Address
  • Social Security number
  • Employment information
  • Income
  • U.S. citizenship status
  • Email address

You may be asked to submit some of the following information to complete your application, if applicable:

  • Purchase agreement/bill of sale
  • Registration
  • Title
  • Vehicle make, model and year
  • Mileage
  • VIN number
  • Lease buyout instructions
  • Proof of income
  • Federal tax returns
  • W-2s

To apply in person, you can make an appointment through the website or walk into a bank branch and talk to a representative. Setting an appointment allows you to avoid waiting and helps ensure a specialist will be prepared with the information you need.

Once you’ve submitted your application, loan decisions are quick. Even if further review is needed after you submit your application, you’ll receive an email with your decision by the end of the following business day.

The fine print

  • Loans are only for cars purchased through franchise dealerships or private parties, which does not include independent dealerships except for CarMax, Hertz Car Sales, Enterprise Car Sales and Carvana.
  • If you apply online, you’ll get the details of your approval via email. Make sure to look them over, including interest rates and repayment terms for new versus used car purchases, before you begin car shopping.
  • Loans are available with payment terms lasting up to 60 months. While a longer term can lower your monthly payment, it can cost a lot more in interest charges. Make sure to do the math before agreeing to a long-term repayment.

Who is a Bank of America auto loan best for?

Savvy car shoppers know that using bank or credit union-backed financing for an auto purchase is generally a better option than going through a dealership. But it can be difficult to arrange bank financing and complete a car purchase without putting in the time to contact several different lenders and visit multiple lots.

If you want the security of financing with a large bank with branches around the country, or even from your pre-existing Bank of America account profile, Bank of America auto loans might be the solution for you. They offer some of the same perks as dealership financing, allowing you to apply for a loan and shop for a car, all within the same platform.

But some extra legwork usually pays off: Comparing rates with other banks, plus credit unions and online lenders is the only way to make sure you’re getting the best deal possible.

*Rate and offer current as of June 1, 2019 and are subject to change. Promotional rate is not available to refinance existing PenFed car loans. Terms apply.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Sarah Brady
Sarah Brady |

Sarah Brady is a writer at MagnifyMoney. You can email Sarah here