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.

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