[Rathji]

The scam works because the guy himself (or a friend) will pick up the car after the money has 'cleared' paypal, but it will either be charged back on the credit card/nsf by the bank/from a stolen paypal account/etc so even though the money is in your account and you can pull it out, when paypal gets stiffed they pull the money from your account. The window for this is quite small, so if someone was to arrange pickup for one day, and you delayed it a few days or a week, you could be more more sure than the money would there for good. There might be some really good ways to extend that windows that I am not aware of, so I wouldn't try this for any large sum.

People believe it because eBay always hyped up how paypal is secure, can't get ripped off because they guarantee transactions etc, but the reality is those services only work for ebay purchases. In fact, you often have much less recourse using paypal to pay than using your Visa straight out, because then you have an option to chargeback if they scam you. If you use paypal, then you pay the money to paypal and they pay it to someone else, so chargeback is not an option.