There are thousands of used cars for sale on eBay every
single day. In fact, eBay Motors is the most profitable
sales division on eBay and naturally there are many
entrepreneurs who are interested in jumping into this
market. For instance, eBay claims it sells an SUV every nine
seconds and is the biggest online car dealer in America,
exceeding the traditional car companies. In fact, there are
15 million cars sold over the Internet each year – and
growing.
The recent rapid growth of the consignment business model
has made the used car market even more enticing. Many
sellers are able to sell cars they have never even seen and
with no more risk than the cost of the auction listing. Some
negotiators even persuade the car owner to pay for the ad,
thereby risking no more than their time.
The biggest single issue for this business model is the
trust of prospective buyers. After all, paying thousands or
tens of thousands of dollars for a car sight unseen is an
awesome leap of faith. Even buying for a plane ticket to go
see a car before paying causes buyers to be uncomfortable.
The best way sellers can overcome this fear is to use an
escrow service. eBay has a preferred service, and it’s
easiest to use that one.
An escrow service acts as a neutral third party. In an
exchange of merchandise, the buyer sends his money to the
escrow service and the seller ships the product to the
buyer. The buyer usually has two days to inspect his
purchase, and if he is happy, he notifies the escrow company
who releases the money to the seller, minus its fee. If the
buyer is dissatisfied, he returns the undamaged merchandise
to the seller, and after the seller receives his merchandise
back (in satisfactory condition), the escrow service returns
the buyer’s money. Thus both sides in the transaction are
protected. The buyer almost always pays the fees for this,
although sometimes buyer and seller split the cost.
eBay’s offers a “Vehicle Services Division” specifically for
dealing with the used cars, trucks, SUVs and almost anything
else with wheels and a motor. The buyer can request a 160
point inspection performed before agreeing to the purchase.
This is an inexpensive service and certainly will save the
purchaser many headaches.
* The buyer pays a $125 fee that is non-refundable
* The seller is contacted and the inspection is carried outv
* The buyer receives a reportv
* The buyer chooses to go ahead with the purchase – or not
Another choice for the buyer is to deposit his payment with
the escrow service and then take delivery of the vehicle.
The seller ships the car after he knows the money his
secure. The seller must provide tracking information, which
is then verified.
The buyer has between one and 30 days to thoroughly inspect
his new purchase (the period is negotiated between the two
parties ahead of time). If this time expires and the escrow
company has not heard from the buyer, it assumes he is happy
and gives the purchase price to the seller.
The buyer may return his vehicle if he isn’t happy and
sometimes buyers and sellers work out partial payment
agreements, the buyer being satisfied with some parts of the
transaction, but not with others. If a dispute arises, it is
settled by the American Arbitration Association.
The fee for this service is:
* $0 – $7,500 = value of vehicle: $125
* $7,500.01 to $15,000: $170
* $15,000.01 to $30,000: $200
* $30,000.01 to $50,000: $275
* $50,000+ = 6% of the value
Once both parties have agreed, the title transfer process
begins and the escrow service will guarantee this too, for a
fee of $95. The fee, naturally, doesn’t include any transfer
costs – it is only insurance that the title will be
expedited to the satisfaction of both parties.
eBay’s escrow service also offers a service that will ship
cars almost anywhere in the world and will gather an auto
history report to inform sellers if their new chariot has
been salvaged or stolen, suffered flood or hail damage, been
in a fire or accident, has had an odometer rollback or has
been used as a police car, a rental or a taxi.
Anyone considering offering used cars for sale on eBay would
be well advised to thoroughly learn the escrow services
available and offer those to prospective buyers. The trust
factor will skyrocket and your chances of completing sales
will dramatically increase.
Learn
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