Escrow services aren’t just for new homeowners. An escrow account protects both people involved in a financial agreement. So do you need escrow when buying a car? Not if you’re driving it right off the lot. But if you’re buying a car from a stranger, an auction site, or ordering a classic model overseas, escrow can act as a middleman to safeguard the exchange.
Fraudulent Transactions
Interest in escrow services has grown as more and more of our shopping transactions occur online. You have to be cautious when buying a car from a private party because fraud is so common. Fake escrow services are part of the problem, so it’s important to research and select your own escrow company. Never allow the seller to choose for you. It might be a scam.
How Escrow Works When Buying a Car
When a buyer and seller have reached a final agreement, funds are sent to the escrow account. The deposit is verified, and the seller can then ship the car. In this way, the interests of both people are protected. Once the paperwork is completed and the title is transferred, the escrow company releases funds to the seller. These extra steps allow everyone to have peace of mind, knowing they will be treated fairly. If the deal falls through, the buyer’s money is simply returned.
The Takeaway
If you aren’t buying a car from a dealership, it’s a good idea to use third-party escrow services. Most sales are straightforward, but sometimes an escrow account is needed to ensure all parts of the sales agreement are met. Buying a car through escrow prevents either the buyer or seller from being taken advantage of, and requires both to follow through.If you have any further questions about car escrow services, Bay Area Escrow has more than 30 years of experience, and we’re here to help.