What is an Escrow Service
An escrow account is a bank account overseen by a neutral third-party. The purpose of the service is to maintain accountability between two parties in ANY high-value transaction, including buying/selling a vehicle.
Benefits to Buyers
As a buyer, one of the biggest risks you run into is misrepresentation. Escrow services help to mitigate that risk almost entirely. As a buyer, all of your purchase funds are held with a neutral third-party (the escrow service) and are only released as specific checkpoints in your agreement are reached. So, if the seller’s vehicle arrives and isn’t what was advertised, you have the opportunity to return the vehicle to the seller and be refunded the full purchase price.
Benefits to Sellers
From the seller’s perspective, the greatest risk is that the buyer doesn’t pay the agreed amount. Escrow services remove that issue from the equation by verifying the funds–in full–up front. You won’t have to worry about cashier’s checks being lost in the mail or notice of insufficient funds days after your vehicle has left your driveway.
Why Should I Use an Escrow Service?
Most escrow services also include a workflow that allows for the easy uploading of any documentation required by the parties involved in the sale, such as:
- Inspection forms.
- Bills of lading.
- Photos of the vehicle to verify condition.
All of these items can be easily uploaded to bolster the seller’s claim as to the vehicle’s condition and to ease the mind of any nervous buyer. This type of record is even more important if the sale is taking place between residents of different states or countries.
The best part about using an escrow service for your vehicle purchase is having all of these services done by the one company and all in one place. Online escrow platforms allow for documentation, transportation arrangements, and purchase funds to be held securely in one easy-to-access location with a full communication history available to either party at any time.
When dealing with a buyer or seller unknown to you, using an escrow service gives you the best protection.
If you are about to embark on a vehicle transaction and have reservations, protect yourself from an unscrupulous seller or buyer by clicking here.