The number one reason why a shopper is willing to buy a car online versus physically going to a dealership is price, according to a Capgemini annual report that examines consumer car buying globally.
Even professionals in the automotive industry look for deals online and are not immune to fraud. Tom Souter, who runs Classic Motor Cars in Lubbock, Texas, and who also appears on CNBC Prime's "The Car Chasers," had an incident back in 2005 that could have cost him thousands of dollars when he bought a 1957 Chevy Bel Air Coupe online that did not exist.
(Read more: Hustling for a bargain at an auto auction)
Souter said the advertisement for the car looked great and he even researched the vehicle identification number (VIN) the seller provided. But since the car was pre-1980, the time when VINs became standardized as 17 digits and which are necessary to run a more comprehensive history report, Souter was not able to locate the car's previous owner or its exact location.
Still, the VIN did check out as belonging to a 2-door, hardtop Chevy coupe. Souter talked with the seller a few times and everything seemed to check out, so he bought the car for $22,000.
"Turned out the guy stole an ad that had been a previous listing on eBay. He never owned the car, never had the car, so eBay paid me back $20,000 on the car," he said.
Souter was reimbursed through the site's vehicle buyers protection plan, which covers certain losses of up to $50,000 for some types of fraud when a shopper buys a car and pays for it through its website.